To The Members of IIFL Finance Limited (Formerly known as IIFL Holdings Limited)
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of IIFL FinanceLimited ("the Company") which comprise the Balance Sheet as at 31 March 2020and the Statement of Profit and Loss (including Other Comprehensive Income) the Statementof Cash Flows and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.
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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31 March 2020 and its profit totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.
BASIS FOR OPINION
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Standalone Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the standalone financial statements.
EMPHASIS OF MATTER
We draw attention Note No.38 to the Standalone Financial Statements whichdescribes the reasons for implementation of the composite scheme of arrangement amongstthe Company India Infoline Media and Research Services Limited IIFL Securities LimitedIIFL Wealth Management Limited India Infoline Finance Limited and IIFL DistributionServices Limited and their respective shareholders under Sections 230 - 232 and otherapplicable provisions of the Companies Act 2013 (the "Scheme") in Parts basedon the legal opinion obtained by the Company. The Scheme has been approved by the NationalCompany Law Tribunal vide its order dated March 07 2019 and filed with the Registrar ofCompanies on April 112019.
Subsequent to the receipt of certificate of registration by the Company for carrying onbusiness of nonbanking financial institution from the Reserve bank of India on March 112020 the said Scheme has been refled with Registrar of Companies on March 30 2020 togive effect to the final part of the Scheme.
Our report is not modified in respect of this matter.
We draw attention to Note 8.3 to the Standalone Financial Statements whichfully describes that the Company has recognised impairment on financial assets to reflectthe business impact and uncertainties arising from the COVID 19 pandemic. Such estimatesare based on current facts and circumstances and may not necessarily reflect the futureuncertainties and events arising from the full impact of the COVID 19 pandemic.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Sr. No. ||Key Audit Matter ||Auditor's Response |
|1 ||Impairment of Financial Assets held at amortised cost: ||Principal audit procedure performed |
| ||The Company exercises significant judgement using subjective assumptions over both when and how much to record as impairment for loans and advances and estimation of the amount of the impairment provision for loans and advances. || We read the Company's Ind-AS 109 based impairment provisioning policy ; |
| || || |
| || || We gained an understanding of the Company's key credit processes comprising granting booking monitoring staging and provisioning and tested the operating effectiveness of key controls over these processes; |
| ||The most significant areas are: || |
| || Impairment models: || |
| ||- Judgement is required to determine the inputs methodologies staging/restaging in case of Significant Increase in Credit Risk ("SICR") cases and assumptions and these can significantly impact the provisions held. The most significant judgements include the segmentation level at which historical loss rates are calculated the length of the recovery period and the loss emergence period applied to historical loss provisions. || |
| || || We tested the completeness of loans and advances off balance sheet items and other financial assets included in the Expected Credit Loss (ECL) calculations as of 31 March 2020; |
| || Identification of impairment: || For data from external sources we understood the process of choosing such data its relevance for the Company and the controls and governance over such data; |
| ||- Corporate exposures are individually assessed for impairment (including identification of cases with SICR) based on a borrower's financial performance solvency liquidity etc. || |
| ||- For Retail exposures collective impairment allowances are calculated using models which approximate credit conditions on homogenous portfolios of loans. || Where relevant we used Information System specialists to gain comfort on data integrity; |
| || || We tested the data integrity and completeness of the Staging Report; |
| || Inputs and Judgements used in determination of management overlay at various asset stages considering the current uncertain economic environment with the range of possible effects unknown to the country arising out of the COVID 19 pandemic. || |
| || || For a sample of exposures we tested the appropriateness of staging into Stage 1 Stage 2 and Stage 3; |
| ||Since the loans and advances form a major portion of the Company's assets and due to the significance of the judgments used in classifying loans and advances into various stages as stipulated in Indian Accounting Standard (IND AS) 109 and determining related impairment provision requirements this is considered to be the area that had a greater focus of our overall Company audit and a key audit matter. || For provision against exposures classified as Stage 1 Stage 2 and Stage 3 we obtained an understanding of the Company's provisioning methodology consistency of various inputs and assumptions used the reasonableness of the underlying assumptions and the sufficiency of the data used by the Management; |
| ||As at March 312020 the Company's total exposure at default for loans and advances amounted to Rs. 152942.83 million and the related impairment provisions amounted to Rs. 7432.40 million comprising Rs. 3140.99 million of provision against Stage 1 and 2 exposures and Rs. 4291.41 million against exposures classified under Stage 3. || |
| || || For a sample of exposures we tested the appropriateness of determination of significant increase in credit risk and the resultant basis for classification of exposures into various stages; |
| ||Refer Note 36A.3 to the Financial Statements. || |
| || || For a sample of exposures we tested the appropriateness of determining Exposure at Default (EAD); |
| || || For a sample of exposures we tested the calculation of the Probability of Default (PD) and the Loss Given Default (LGD) used in the ECL calculations including the appropriateness of the use of collateral and the resultant arithmetical calculations; |
| || || We assessed the appropriateness of the calculation of the management overlay in response to COVID 19 related economic uncertainty. |
| || || We performed an overall 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. |
|2 ||Information Technology and General Controls ||Principal audit procedure performed |
| ||The Company is highly dependent on technology due to significant number of transactions that are processed electronically daily. ||For the key IT systems used to prepare accounting and financial information: |
| ||Accordingly our audit procedures had a focus on IT systems and controls due to the pervasive nature and complexity of the IT environment the large volume of transactions processed daily and the reliance on automated and IT dependent manual controls. Our areas of audit focus included Access Security (including controls over privileged access) Program Change controls and Network Operations. || 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. Furthermore we conducted a risk assessment and identified IT applications databases and operating systems that are relevant to our audit; |
| ||Absence of segregation of duties may result in a risk of intended or unintended manipulation of data that could have a material effect on the completeness and accuracy of the financial statements. || We tested the design implementation and operating effectiveness of the Company's General IT controls over the information systems that are critical to financial reporting. This included evaluation of Company's controls to ensure that access was provisioned / modified based on duly approved reguests access for exit cases was revoked in a timely manner and access of all users was recertified during the period of audit. Further controls related to program change were evaluated to verify whether the changes were approved tested in an environment that was segregated from production and moved to production by appropriate users. |
| ||Due to the pervasive nature and use of IT systems we continued to assess the risk of a material misstatement arising from access to technology as a significant matter for the audit. || |
| || || We tested the controls to ensure that segregation of duties was monitored and conflicting access was either removed or mapped to mitigating controls which were documented and tested. |
| || || We tested the controls over network segmentation restriction of remote access to the Company's network controls over firewall configurations and mechanisms implemented by the Company to prevent detect and respond to network security incidents. |
| || || We also tested automated business cycle controls and report logic for system generated reports relevant to the audit for completeness and accuracy. |
| || ||Where deficiencies were identified we tested compensating controls or performed alternate procedures to assess whether there were any unaddressed IT risks that would impact the completeness and accuracy of data. |
|3 ||Accounting for Composite Scheme of Arrangement ||Principal audit procedure performed: |
| ||On January 31 2018 the Board of Directors of the Company approved the draft composite scheme of arrangement amongst the Company India Infoline Media & Research Services Limited India Infoline Limited IIFL Wealth Management Limited India Infoline Finance Limited and IIFL Distribution Services Limited and their respective shareholders ("Scheme") under sections 230 -232 and other applicable provisions of the Companies Act 2013. ||- We obtained and read the Composite Scheme of Arrangement under sections 230 and 232 and other applicable provisions of the Companies Act 2013. |
| || ||- We obtained and read the NCLT order March 7 2019 approving the scheme. |
| ||The Company received shareholders' approval on December 12 2018. Further the Company received the National Company Law ||- We obtained and read the letter dated April 11 2019 filed with the ROC. |
| ||Tribunal (NCLT) Mumbai approval on March 7 2019 and filed the scheme with the Registrar of Companies (ROC) Mumbai on April 112019. ||- We obtained and read the certificate of registration to carry on business of NonBanking Financial Institution without accepting Public Deposits issued by the RBI to the Company on March 1 12020 |
| ||As at the date of filing of the Scheme with the ROC the Company had not received the final approval from the Reserve Bank of India (RBI) for transfer of Non-Banking Finance Company (NBFC) business license from India Infoline Finance Limited to the Company and had reguested the ROC to permit refiling of the Scheme after receipt of all the approvals. || |
| || ||- We obtained and read the letter dated March 30 2020 filed with the ROC. |
| || ||- We evaluated the management's conclusions on the accounting for the amalgamation |
| ||On March 11 2020 the Company received the fresh certification of registration to carry on business of Non-Banking Financial Institution without accepting Public Deposits from the Reserve Bank of India and refled the Scheme with the ROC Mumbai on March 30 2020. ||of India Infoline Finance Limited with the Company. |
| || ||- We performed procedures to verify the merger accounting done by the Company including their measurement and presentation in accordance with IND AS 103 and the Scheme. |
| ||The Committee of the Board of Directors of the Company in their meeting held on March 30 2020 decided to give effect to Part V of the Scheme dealing with Amalgamation of India Infoline Finance Limited with the Company with effect from March 30 2020 with the appointed date being April 12018. || |
| ||Accounting for Composite Scheme of Arrangement is considered to be a key audit matter because the transaction and its accounting is non-routine and involves significant management judgements. Refer note 38 of the standalone financial statements. || |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Director's report andManagement Discussion and Analysis report but does not include the standalone financialstatements and our auditor's report thereon. The Director's report and ManagementDiscussion and Analysis report is expected to be made available to us after the date ofthis auditor's report.
Our opinion on the standalone financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether the other information is materially inconsistent withthe standalone financial statements or our knowledge obtained during the course of ouraudit or otherwise appears to be materially misstated.
When we read the Director's report and Management Discussion and Analysisreport if we conclude that there is a material misstatement therein we are required tocommunicate the matter to those charged with governance as required under SA 720 'TheAuditor's responsibilities Relating to Other Information'.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding 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 standalone financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adeguate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management.
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 doubt on the Company'sability 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 disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. 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 cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Obtain sufficient appropriate audit evidence regarding the financial informationof the Company to express an opinion on the standalone financial statements.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit we report to theextent 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.
b) In our opinion proper books of account as required by law have been kept by theCompany.
c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Cash Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 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 over financialreporting of the Company 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 Company's internal financial controls overfinancial reporting.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
h) 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 Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements;
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company. Also refer note 21.1 of thestandalone financial statements.
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants (Firm's Registration No. 117366W/W-
PALLAVI A. GORAKSHAKAR
(Partner) (Membership No.105035)
Place: Mumbai Date: 07 June 2020
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of IIFLFinance Limited (Formerly known as IIFL Holdings Limited) ("the Company") as ofMarch 312020 in conjunction with our audit of the standalone Ind AS financial statementsof the Company for the year ended on that date.
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 Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adeguate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control overfinancial reporting is a process designed toprovide 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.
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 2020 based on the criteria forinternal financial control over financial reporting established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants (Firm's Registration No. H7366W/W-
PALLAVI A. GORAKSHAKAR
(Partner) (Membership No.105035)
Date: 07 June 2020
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 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) The Company has a program of verification of fixed assets to cover all the items atmajor locations in a phased manner over a period of 3 years which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Pursuantto the program no physical verification has been conducted by the management during theyear.
(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed provided to us we reportthat the title deeds comprising all the immovable properties of land and buildings whichare freehold are held in the name of the Company as at the Balance Sheet date.
(ii) The Company does not have any inventory and hence reporting under clause (ii) ofthe CARO 2016 is not applicable.
(iii) According to the information and explanations given to us the Company hasgranted loans secured or unsecured to companies firms Limited Liability Partnershipsor other parties covered in the register maintained under section 189 of the CompaniesAct 2013 in respect of which:
(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest.
(b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.
(c) There is no overdue amount remaining outstanding as at the balance sheet date.
(iv) The Company is a registered non-banking finance company to which the provisions ofSections 185 and 186 of the Companies Act 2013 are not applicable and hence reportingunder clause (iv) of CARO 2016 is not applicable.
(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year.
(vi) The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Companies Act 2013.
(vii) According to the information and explanations given to us in respect ofstatutory dues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Goods and Services Taxcess and other material statutory dues applicable to it to the appropriate authorities. Weare informed that the provisions of Sales Tax Customs Duty and Excise Duty are notapplicable to the Company.
(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Goods and Services Tax cess and other material statutorydues in arrears as at 31 March 2020 for a period of more than six months from the datethey became payable.
(c) Details of dues of Income-tax Services Tax and Professional Tax which have notbeen deposited as on 31 March 2020 on account of disputes are given below:
|Name of Statute ||Nature of Dues ||Forum where Dispute is Pending ||Period to which the Amount Relates ||Amount Unpaid (Rs. in Million) ||Amount Deposited under protest (Rs. in Million) |
|Income Tax Act 1961 ||Income Tax ||Bombay High Court ||AY 2008-09 ||- ||21.97 |
|Income Tax Act 1961 ||Income Tax ||Bombay High Court ||AY 2009-10 ||- ||18.70 |
|Income Tax Act 1961 ||Income Tax ||CIT(A) ||AY 2010-11 ||21.95 ||42.63 |
|Income Tax Act 1961 ||Income Tax ||CIT(A) ||AY 2011-12 ||25.39 ||17.12 |
|Income Tax Act 1961 ||Income Tax ||CIT(A) ||AY 2012-13 ||80.28 ||42.44 |
|Income Tax Act 1961 ||Income Tax ||CIT(A) ||AY 2013-14 ||9.64 ||42.61 |
|Income Tax Act 1961 ||Income Tax ||CIT(A) ||AY 2016-17 ||76.84 ||- |
|Income Tax Act 1961 ||Income Tax ||CIT(A) ||AY 2017-18 ||58.50 ||1.73 |
|Income Tax Act 1961 ||Income Tax ||ITAT ||AY 2012-13 ||- ||7.07 |
|Income Tax Act 1961 ||Income Tax ||ITAT ||AY 2013-14 ||- ||8.41 |
|Income Tax Act 1961 ||Income Tax ||ITAT ||AY 2014-15 ||- ||1.90 |
|Income Tax Act 1961 ||Income Tax ||ITAT ||AY 2016-17 ||- ||13.95 |
|Income Tax Act 1961 ||Income Tax ||CIT(A) ||AY 2017-18 ||- ||48.63 |
|The FinanceAct 1994 ||Service Tax ||Adjudicating Authority ||Apr 2007 - Mar 2012 ||1.10 ||0.04 |
|The FinanceAct 1994 ||Service Tax ||CESTAT Mumbai ||April 2007 to 13 May 2008 ||57.94 ||2.15 |
|The FinanceAct 1994 ||Service Tax ||CESTAT Mumbai ||July 2012 to March 2014 ||86.97 ||3.39 |
|The FinanceAct 1994 ||Service Tax ||CESTAT Mumbai ||July 2012 to March 2014 ||177.08 ||13.34 |
|The FinanceAct 1994 ||Professional Tax ||Commissioner Appeals ||F.Y 2007-08 ||1.09 ||0.47 |
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions banks and government and dues to debenture holders except in one case wherethere was a delay in payment of an instalment due to Andhra Bank Limited towards term loanfacility availed by the Company.
(ix) In our opinion and according to the information and explanations given to usmoney raised by way of initial public offer (including debt instruments) and the termloans have been applied by the Company during the year for the purposes for which theywere raised other than temporary deployment pending application of proceeds.
(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.
(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 underclause (xiv) of CARO 2016 is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its holding or subsidiary companies or persons connected withthem and hence provisions of section 192 of the Companies Act 2013 are not applicable.
(xvi) The Company is required to be registered under section 45-1A of the Reserve Bankof India Act 1934 and it has obtained the registration.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants (Firm's Registration No. 117366W/W-
PALLAVI A. GORAKSHAKAR
(Partner) (Membership No.105035)
Date: 07 June 2020