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LIC Housing Finance Ltd.

BSE: 500253 Sector: Financials
NSE: LICHSGFIN ISIN Code: INE115A01026
BSE LIVE 15:42 | 22 Aug 636.95 -11.70
(-1.80%)
OPEN

653.00

HIGH

653.00

LOW

635.00

NSE 15:57 | 22 Aug 636.10 -12.30
(-1.90%)
OPEN

653.70

HIGH

653.70

LOW

634.40

OPEN 653.00
PREVIOUS CLOSE 648.65
VOLUME 95571
52-Week high 794.10
52-Week low 470.00
P/E 16.13
Mkt Cap.(Rs cr) 32,144
Buy Price 636.95
Buy Qty 6.00
Sell Price 0.00
Sell Qty 0.00
OPEN 653.00
CLOSE 648.65
VOLUME 95571
52-Week high 794.10
52-Week low 470.00
P/E 16.13
Mkt Cap.(Rs cr) 32,144
Buy Price 636.95
Buy Qty 6.00
Sell Price 0.00
Sell Qty 0.00

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 2016 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 read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's 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.

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 312016 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 purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by thecompany so far 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 2016 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of sub-section 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.

(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 in our opinionand to the best of our information and according to the explanations given to us:

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

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
Date: April 18 2016

ANNEXURE 'A' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'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 examinedby us 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. Accordingly the provisions of clause 3(ii) of the Order are not applicableto the Company.

(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Act.

(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 compiled 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. We areinformed that no Order has been passed by the Company Law Board or National Company LawTribunal 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 ofthe company examined by us in our opinion the Company is regular in depositing with theappropriate authorities undisputed statutory dues including provident fund employees'state insurance income tax sales-tax service tax duty of customs duty of excisevalue added tax cess and other material statutory dues applicable to it. According toinformation and explanation given to us no undisputed amounts payable were outstandingat the year end for a period of more than six months from 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 due 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) During the course of our examination of the books of account carried out inaccordance with the generally accepted auditing standards in India and as per theinformation and explanations given to us we have not come across any instance of fraudeither noticed or reported during the year on or by the Company except that there havebeen instances of misappropriation of funds by way of sanction and disbursal ofnon-tenable loans or use of deception to obtain housing loans by some of the customersinvolving an aggregate amount of Rs.1338.95 lacs. However as informed to us suchinstances are inherent in the nature of business of the Company and adequate provision inrespect thereof has been made in the accounts for 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 provisions of clause3 (xii) of the Order are not applicable to the Company.

(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 etc. 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 underprovisions of clause 3 (xiv) of the Order are not applicable to the Company.

(xv) Based upon the 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 him. Accordingly the provisions of clause 3(xv)of the Order are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA Reserve Bank ofIndia 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
Date: April 18 2016

ANNEXURE 'B' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

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 312016 in conjunction with ouraudit of the financial statements of the Company for the year ended.

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.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditor's 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 Institute of CharteredAccountants of India and specified under sub-section 10 of Section 143 of the Act to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

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 the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theInstitute of Chartered 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
Date: April 18 2016

INDEPENDENT AUDITORS' REPORT

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 33 of Chapter IV of the Housing Finance Companies (NHB)Directions 2010 (the "Directions") we have examined the matters specified inthe Paragraph 34 of the Directions in respect of LIC Housing Finance Ltd. (the"Company") for the year ended March 312016.

Management's Responsibility

The Management is responsible for the design and implementation of the internalprocedures systems processes and controls to ensure compliance with the Directions on anongoing basis. This responsibility also includes reporting noncompliances if any to theNational Housing Bank Board of the Company and its Audit Committee.

Auditors' Responsibility

Our responsibility is to report on the matters specified in Paragraph 34 of theDirections based on our audit. We conducted our audit in accordance with the Standards onAuditing issued by the Institute of Chartered Accountants of India (ICAI). Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether there are any identified non-compliances. An auditinvolves performing procedures to obtain audit evidence about the compliance with theDirections. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the information and records whetherdue to fraud or error. In making those risk assessments the auditor considers internalcontrols relevant to the Company's compliance with the Directions in order to design auditprocedures that are appropriate in the circumstances. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our certificate.

We conducted our examination in accordance with the Guidance Note on Audit Reports andCertificates issued for Special Purpose by the Institute of Chartered Accountants ofIndia.

Conclusion

Based on our examination of the books and records of the Company as produced for ourexamination and the information & explanations provided to us we report that:

1. The Company had applied for registration as required under Section 29A of theNational Housing Bank Act 1987 and has been granted the certificate of registration dated31st July 2001.

2. The Company has complied with the liquidity requirements as specified under Section29B of the National Housing Bank Act 1987 and has kept the securities with the designatedbank.

3. The Company has complied with Section 29C of the National Housing Bank Act 1987.

4. The Company has complied with the provisions of the Directions.

5. The capital adequacy ratio as disclosed in the return submitted to the NationalHousing Bank has been correctly determined and such ratio is in compliance with theminimum capital to risk weighted asset ratio as prescribed by the National Housing Bank inthe Directions.

6. a) Public deposits accepted by the Company are within admissible limits.

b) 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.

c) There are no deposits in excess of the admissible limits.

d) The credit rating for deposits i.e. FAAA/Stable reaffirmed by the credit ratingagency viz. CRISIL on April 1 2015 is in force. There are no limits of public depositsspecified by the rating agency.

e) 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.

f) During the year the Company has not opened / closed any branch / office foracceptance of public deposits.

Restriction of use

This report is issued pursuant to the requirement as per Paragraph 33 of the Directionsand should not be used by any other person or for any other purpose. We neither accept norassume any duty or liability for any other purpose or to any other party to whom ourreport is shown or into whose hands it may come 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
Date: April 18 2016