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GIC Housing Finance Ltd.

BSE: 511676 Sector: Financials
NSE: GICHSGFIN ISIN Code: INE289B01019
BSE 00:00 | 28 Sep 125.10 -0.70
(-0.56%)
OPEN

125.15

HIGH

127.50

LOW

124.00

NSE 00:00 | 28 Sep 125.30 -0.45
(-0.36%)
OPEN

124.95

HIGH

127.65

LOW

123.75

OPEN 125.15
PREVIOUS CLOSE 125.80
VOLUME 6198
52-Week high 172.05
52-Week low 109.95
P/E 3.21
Mkt Cap.(Rs cr) 674
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 125.15
CLOSE 125.80
VOLUME 6198
52-Week high 172.05
52-Week low 109.95
P/E 3.21
Mkt Cap.(Rs cr) 674
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

GIC Housing Finance Ltd. (GICHSGFIN) - Auditors Report

Company auditors report

TO THE MEMBERS OF GIC HOUSING FINANCE LIMITED ON THE AUDIT OF THE FINANCIAL STATEMENTSReport on the Audit of the Financial Statements Opinion

We have audited the Financial Statements of GIC Housing Finance Limited (hereinafterreferred to as "the Company") which comprise the Balance Sheet as at March 312021 the Statement of Profit and Loss (including other comprehensive income) Cash FlowStatement and the Statement of Changes in Equity for the year then ended and notes to theFinancial Statements including a summary of the significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Financial Statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and profit total comprehensiveincome changes in equity and its cash flows for the year then ended.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing specified undersub-section (10) of section 143 of the Act ("the SAs"). Our responsibilitiesunder those SAs are further described in the Auditor’s Responsibilities for the Auditof the Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia ("the ICAI") together with the ethical requirements that are relevant toour audit of the Financial Statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI’s Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to Note 42 to the Financial Statements on possible effects ofCOVID-19 pandemic.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the Financial Statements of the current period. These matterswere addressed in the context of our audit of the Financial Statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.For each matter below our description of how our audit addressed the matter is providedin that context.

Key Audit Matter How the matter was addressed in our audit
Expected Credit Loss – Impairment of carrying value of loans and advances We performed audit procedures set out below:
Profit before Tax for F.Y. 20-21 was 13455 lakh after considering an impairment of 18517 lakh vis-a-vis Profit before Tax for F.Y. 19-20 was 11227 lakh after considering an impairment of 9970 lakh. Read the Company’s Ind-AS 109 based impairment provisioning policy
Under Ind AS 109 Expected Credit Loss (ECL) is required to be determined for recognising impairment loss on financial assets which are stated at amortised cost or carried at fair value through other comprehensive income. The calculation of impairment loss or ECL is based on significant management estimates and judgements which are as under: Understood and assessed the Company’s process and controls on measurement and recognition of impairment in the loan portfolio.
Judgements about credit risk characteristics for collective evaluation of impairment under various stages of ECL. Test checked loans in stage 1 2 and 3 to ascertain that they were allocated to the appropriate stage.
Loan staging criteria Calculation of Probability of Default (PD) and Loss Given Default (LGD). Test checked PD and LGD calculation workings performed by management including testing data used in assessment and evaluation of whether the results support appropriateness of the PDs at portfolio level.
Consideration of probability scenarios and forward looking macro-economic factors ECL requires a large variety of data as an input to the model. Test checked basis of collateral valuation in the determination of ECL provision.
This increases the risk of completeness and accuracy of the data that has been used to create assumptions in the model. Performed an assessment of the ECL provision levels at each stage including management’s assessment on COVID 19 impact to determine if they were reasonable considering the Company’s portfolio risk profile credit risk management practices and the macroeconomic environment.
COVID-19 pandemic situation and the lockdown in the country coupled with the moratorium and restructuring granted by RBI has cast an uncertainty on the timing and manner in which the Company would be able to collect the contractual cashflows in the form of repayments from its borrowers.
In our opinion this is considered as a Key Audit Matter in view of the criticality of the item to the Financial Statements and the complex nature of assumptions and judgements exercised by the management.
IT Systems and controls
The Company’s financial accounting and reporting systems are highly dependent on the effective working of the operating and accounting system. We have carried out the following procedures to verify the effectiveness of IT controls:
Due to extensive volumes variety and complexity of transactions the operating system is functioning consistently and accurately specifically with respect to following: We obtained an understanding of the Company’s business IT environment and key changes if any during the audit period that may be relevant to the audit.
Interest Fee income and other charges on Loans Bifurcation of the Loan Portfolio based on maturity pattern Various Report Generated including the report for Asset Classification & Provision. Our audit procedures included verifying testing and reviewing the design and operating effectiveness of the IT system by verifying the reports/returns and other financial and non-financial information generated from the system on a test check basis.
Our audit outcome is dependent on the effective functioning of such operating and accounting system. We also tested key automated and manual business cycle controls and logic for system generated reports relevant to the audit and performed alternate procedures to assess whether there were any unaddressed IT risks that would materially impact the Financial Statements.
We have also obtained management representations wherever considered necessary.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s management and Board of Directors are responsible for thepreparation of the other information. The other information comprises the informationincluded in the Director’s report and Management Discussion & Analysis (MD&A)report but does not include the Financial Statements and our auditor’s reportthereon. The Director’s report and MD&A report is expected to be made availableto us after the date of this auditor’s report.

Our opinion on the Financial Statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the Financial Statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the Financial

Statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read the Other Information if we conclude that there is a materialmisstatement therein we are required to communicate the matters to those charged withgovernance.

Management’s Responsibilities for the Financial Statements

The Company’s management and Board of Directors are responsible for the mattersstated in sub-section (5) of Section 134 of the Act with respect to the preparation ofthese Financial Statements that give a true and fair view of the financial positionfinancial performance total comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the accounting standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Financial Statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror. In preparing the Financial Statements management and Board of Directors areresponsible for assessing the Company’s ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company’s financialreporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the FinancialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these

Financial Statements.

As part of an audit in accordance with Standards on Auditing we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

i. Identify and assess the risks of material misstatement of the Financial Statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resultingfrom error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control.

ii. Obtain an understanding of internal controls relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under the section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

iii. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

iv. Conclude on the appropriateness of management’s use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant the ability of theCompany to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor’s report to the related disclosuresin the Financial Statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However future events or conditions may cause the Company to ceaseto continue as a going concern.

v. Evaluate the overall presentation structure and content of the FinancialStatements including the disclosures and whether the Financial Statements represent theunderlying transactions and events in a manner that achieves fair presentation. Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Financial Statements of thefinancial year ended March 31 2021 and are therefore the key audit matters. We describethese matters in our auditor’s report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) 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 appears from our examination of those books;

c. the Balance Sheet the Statement of Profit and Loss the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account;

d. in our opinion the aforesaid Financial Statements comply with the AccountingStandards specified under Section 133 of the Act read with relevant rules issuedthereunder;

e. on the basis of written representations received from the directors as on March 312021 taken on record by the Board of Directors none of the other directors isdisqualified as on March 31 2021 from being appointed as a director in terms of Section164(2) of the Act;

f. with respect to the adequacy of the internal financial controls with reference toFinancial Statements of the Company and the operating effectiveness of such controlsrefer to our separate report in "Annexure B";

g. 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 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 38 to the Financial Statements.

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

3. As required by Section 197(16) of the Act in our opinion and to the best of ourinformation and according to the explanations given to us the remuneration paid by theCompany to its directors during the year is in accordance with the provisions of Section197 of the Act.

For M. P. Chitale & Co.
Chartered Accountants
Firm Regn. No.101851W
Murtuza Vajihi
Partner
Place: Mumbai Membership No.: 112555
Date: June 28 2021 UDIN: 21112555AAAACD7565

ANNEXURE A TO INDEPENDENT AUDITOR’S REPORT

(REFERRED TO IN PARAGRAPH 1 UNDER ‘REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS’ SECTION OF OUR REPORT TO THE MEMBERS OF GIC HOUSING FINANCE LIMITED OFEVEN DATE)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.

(b) Property Plant and Equipment of the Company has been physically verified by theManagement during the year. In our opinion periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its business. We areinformed that no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examinedby us we report that the title deeds comprising all the immovable properties ofacquired buildings are held in the name of the Company as at the balance sheet date.

(ii) The Company is in business of Housing Finance. Therefore it does not hold anyphysical inventories. Accordingly reporting under paragraph 3(ii) of the Order is notapplicable to the Company.

(iii) (a) According to information and explanations furnished to us during the yearthe Company has not granted any loans secured or unsecured to Companies Firms LimitedLiability Partnerships or other parties covered in the Register maintained u/s 189 of TheCompanies Act 2013. Therefore reporting under paragraph 3(iii)(a) of the Order is notapplicable to the Company.

(b) According to information and explanation given to us and the records examined byus in case of the secured housing loans granted to the parties listed in the registermaintained under Section 189 of the Act in earlier years the borrowers are regular inpayment of principal & interest as stipulated.

(c) There is no amount overdue for more than ninety days in respect of the Housing loangranted to parties listed in the register maintained under Section 189 of the Act.

(iv) According to information and explanation given to us and the records examined byus the Company has not advanced any loan or given guarantee or provided security duringthe year covered under section 185 of the Act. Consequently requirement of clause (iv) ofthe order pertaining to compliance with section 185 of the Act is not applicable. TheCompany has complied with section 186 (1) of the Act in respect of investments made. TheCompany being housing finance company nothing contained in section 186 exceptsub-section (1) shall apply.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year and hence reporting under paragraph 3(v) of theOrder is not applicable.

(vi) According to the information and explanations given to us and to the best of ourknowledge the Central Government has not prescribed the maintenance of cost records undersub-section 1 of section 148 of the Companies Act 2013 read with Companies (Cost Recordsand Audit) Rules 2014 as amended. Hence reporting under paragraph 3(vi) of the order isnot applicable to the Company.

(vii) (a) According to the information and explanations given to us and on the basisof the books of account of the company examined by us in our opinion the Company isgenerally regular in depositing with the appropriate authorities undisputed statutory duesincluding provident fund employees’ state insurance income tax sales-tax goodsand service tax cess and other material statutory dues applicable to it. According toinformation and explanations 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 and goods and service tax which have not been deposited with the appropriateauthorities 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 and dues to debenture holders. The Company has not taken loans orborrowings from government.

(ix) According to the information and explanations given to us and on the basis of ourexamination of the books of account on an overall basis the Company has utilized themoney raised by way of term loans during the year for the purposes for which they wereraised except for amounts aggregating to 44729 lakh which were initially utilised forrepayment of existing term loans and/or payment of general expenses instead of onwardlending which were rectified subsequently by way of disbursements for onward lending.Apart from money raised by way of term loan and debt instruments the Company has notraised any moneys by way of initial public offer / further public offer.

(x) According to the information and explanations given to us no material fraud byCompany or on the Company by its officers or employees has been noticed or reported duringthe year.

(xi) According to the information and explanations given to us and on the basis of ourexamination of the records the Company has paid / provided managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith 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) According to the information and explanations given to us and on the basis ofour examination of the records the Company is in compliance with Section 177 and 188 ofthe Act where applicable for all transactions with the related parties.

(xiv) According to the information and explanations given to us and on the basis of ourexamination of the records the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.Accordingly reporting under paragraph 3(xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us and on the basis of ourexamination of the records 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 our opinion and according to information and explanation given to us theCompany is not required to be registered under section 45-IA Reserve Bank of India Act1934.

For M. P. Chitale & Co.
Chartered Accountants
Firm Regn. No.101851W
Murtuza Vajihi
Partner
Place: Mumbai Membership No.: 112555
Date: June 28 2021 UDIN: 21112555AAAACD7565

ANNEXURE B TO INDEPENDENT AUDITOR’S REPORT

(REFERRED TO IN PARAGRAPH 2(F) UNDER ‘REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS’ SECTION OF OUR REPORT TO THE MEMBERS OF GIC HOUSING FINANCE LIMITED OFEVEN DATE) REPORT ON THE INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE AFORESAIDFINANCIAL STATEMENTS UNDER CLAUSE (I) OF SUB-SECTION (3) OF SECTION 143 OF THE COMPANIESACT 2013 (THE ‘ACT’)

We have audited the internal financial controls with reference to financial reportingof GIC Housing Finance Limited (hereinafter referred to as "the Company") as ofMarch 31 2021 in conjunction with our audit of the Financial Statements of the Companyfor the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management and Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal control with referenceto financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India. These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business 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 with reference to Financial Statements based on our audit. We conducted our auditin accordance with the Guidance Note issued by the Institute of Chartered Accountants ofIndia and the standards on Auditing prescribed under sub-section (10) of Section 143 ofthe Act to the extent applicable to the audit of internal financial controls withreference to Financial Statements. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial reporting and theiroperating effectiveness. Our audit of internal financial controls with reference toFinancial Statements included obtaining an understanding of internal financial controlswith reference to Financial Statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor’sjudgement including the assessment of the risks of material misstatement of the FinancialStatements 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 with reference toFinancial Statements.

Meaning of Internal Financial Controls with reference to Financial Statements.

A Company’s internal financial control with reference to Financial Statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of Financial Statements for external purposes in accordancewith generally accepted accounting principles. A Company’s internal financial controlwith reference to Financial Statements includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Financial Statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of management and directors of the Company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company’s assets that could havea material effect on the Financial Statements.

Inherent Limitations of Internal Financial Controls With reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference toFinancial Statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to Financial Statements to future periods are subject to the risk that theinternal financial control with reference to Financial Statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures 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 controlswith reference to Financial Statements and such internal financial controls were operatingeffectively as at March 31 2021 based on the internal financial controls with referenceto Financial Statements criteria established by the Company 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 M. P. Chitale & Co.
Chartered Accountants
Firm Regn. No.101851W
Murtuza Vajihi
Partner
Place: Mumbai Membership No.: 112555
Date: June 28 2021 UDIN: 21112555AAAACD7565

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