International Housing Finance Corporation Ltd.
Report on the Financial Statements
We have audited the accompanying financial statements of INTERNATIONAL HOUSINGFINANCE CORPORATION LTD. (the Company') which comprise the balance sheet as at31 March 2017 the statement of profit and loss and the cash flow statement for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rule 2014
This responsibility also includes maintenance of adequate accounting records inaccordance with the provision of the act for safeguarding of the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies making judgment and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatement that give a true and fair view and free from material misstatement whether dueto fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provision of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovision of the Act and Rules made there under.
We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified u/s 143(10) of the Act. ThoseStandards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by management aswell as evaluating the overall presentation of 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 statement.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2017;
i. In the case of the statement of profit and loss of the Loss for the year ended onthat date; and
ii. In the case of the cash flow statement of the cash flows for the year ended onthat date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "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 purpose 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 Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;
d. In our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards referred to section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rule 2014.
e. On the basis of written representations received from the directors as on 31 March2017 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31 March 2017 from being appointed as a director in terms of section 164(2) of theAct.
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".
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 (if any) on itsfinancial position in its financial statements.
ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There were no amounts which are required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016. Based on audit procedures and relying onthe management representation we report that the disclosures are in accordance with thebooks of account maintained by the Company.
For Naigam H Shah & Co.
Firm's registration number: 125365W
Naigam H Shah
Membership number: 117236
Annexure A to the Independent Auditors' Report
Referred to in paragraph 1 under the heading Report on Other Legal &Regulatory Requirement' of our report of even date to the financial statements of theCompany for the year ended March 312017:
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has regular programme of physical verification of its fixed assetsthrough which all the fixed assets are verified in a phased manner over a period of threeyears. In our opinion physical verification is reasonable having regard to the size ofthe Company and the nature of its assets. No material discrepancies were noticed on suchverification.
ii. The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.
iii. (a) The Company has granted loans to companies covered in the register maintainedunder Section 189 of the Companies Act 2013. The loans have been granted based onapproval of Finance Committee at varying terms and conditions which in our opinion andaccording to the information and explanations given to us the terms and conditions aregenerally not prejudicial to the Company's interest.
(b) In respect of loans granted to parties covered in the register maintained undersection 189 of the Companies Act 2013 repayment of the principal amount and payment ofinterest has been regular.
(c) Read with paragraph (iii)(b) above there are no amounts of loans granted tocompanies firms or other parties listed in the register maintained under section 189 ofthe Companies Act 2013 which are overdue for more than ninety days.
iv. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013In respect of loans investments guarantees and security.
v. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
vi. To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under clause 148(1) of the Companies Act 2013for the services of the Company.
vii. (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income tax salestax service tax duty of customs duty of excise value added tax cess and othermaterial statutory dues applicable to it.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax service taxsales tax duty of custom duty of excise value added tax cess and other materialstatutory dues were outstanding at the year end for a period of more than six monthsfrom the date they became payable.
viii. In our opinion and according to information and explanations given by themanagement the Company has not defaulted in repayment of dues to financial institutionsbanks or debenture holders. The Company does not have any outstanding dues to governmentduring the year.
ix. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
x. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the Company or no fraud on the Companyby the officers and employees of the Company has been noticed or reported during the year.
xi. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided (if any) inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act.
xii. In our opinion the Company is not a Nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company.
xiii. According to the information and explanations given by the management andconsidering the legal opinion obtained by the management in respect of transactions withrelated parties are in compliance with section 177 and 188 of Companies Act 2013 whereapplicable and the details have been disclosed in the notes to the financial statementsas required by the applicable accounting standards.
xiv. According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company and hence not commented upon.
xv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
xvi. According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.
For Naigam H Shah & Co.
Firm's registration number: 125365W
Naigam H Shah
Membership number: 117236
"Annexure B" to the Independent Auditor's Report of even date on theStandalone Financial Statements of INTERNATIONAL HOUSING FINANCE CORPORTION LTD.
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 INTERNATIONALHOUSING FINANCE CORPORATION LTD. ("the Company") as of March 31 2017 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 for example "the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India". Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 judgment 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 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.
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 2017 based on theinternal control over financial reporting criteria 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 and on behalf of
Naigam H Shah & Co
ICAI Firm's registration number: 125365W
Naigam H Shah
Membership number: 117236