REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Dewan Housing Finance Corporation Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company’s branches/offices at 241 locations.
MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and fair presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and 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 the Act, we give in the “Annexure A” a statement on the matters specified 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 best of 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 the Company so far as appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from branches not visited by us;
c) The reports on the accounts of the branch offices of the Company audited under Section 143 (8) of the Act by branch auditors have been sent to us and have been property dealt with by us in preparing this report;
d) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account and with the returns received from branches not visited by us;
e) In our opinion, the aforesaid standalone financial statements comply with the accounting standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
f) On the basis of written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of Section 164(2) of the Act;
g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting;
h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rules 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and 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 financial position in its standalone financial statements as referred to in Note 30 to the standalone financial statements;
ii) The Company has no material foreseeable losses on long-term contracts including derivative contracts, as required under the applicable law or accounting standards.
iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company, except that the amount of Rs.705/- payable for the month of March 2017, has been transferred to IEPF in the month of April, 2017.
iv) The Company has provided requisite disclosures in the standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on audit procedures and relying on the management representation, we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management as referred to in Note 40 to the standalone financial statements.
(Referred to in Paragraph 1 under the heading of “Report on other legal and regulatory requirements” of our report of even date)
1) In respect of its fixed assets :
a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
b) As explained to us, some of the fixed assets were physically verified during the year by the Management as per programme of verification. According to the information and explanation given to us, no material discrepancies were noticed on such verification.
c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deeds provided to us, we report that, the title deeds, comprising all the immovable properties in respect of buildings, are held in the name of the Company as at the balance sheet date. In respect of immovable properties i.e. buildings taken on lease and disclosed as fixed asset in the standalone financial statements, the lease agreements for the said buildings thereof are in the name of the Company.
2) As the Company had no Inventories during the year, clause (ii) of paragraph of 3 of the Order is not applicable to the Company.
3) The Company has granted interest free unsecured loans to wholly owned subsidiaries amounting to Rs.153 Lakh and the closing balance as at March 31, 2017 was Rs.238 Lakh. In our opinion and according to information and explanations given to us, in respect of these loans:
a) The terms and conditions of the grant of such loans are not prejudicial to the Company’s interest.
b) There is no schedule of repayment of principal and are repayable on demand. Also, there is no stipulation as to date of payment of interest.
c) Since the principal and interest on these loans are repayable on demand, question of overdue amount does not arise.
4) Company has not directly or indirectly advanced loan to the person or given guarantees or securities in connection with the loan taken by persons covered under Section 185 of the Act. Company being a housing finance company, nothing contained in Section 186, except subsection (1) of that section.
5) The Company has accepted deposits from the public. In our opinion and according to the information and explanation given to us, the Company has, during the year, complied with the directives issued by the National Housing Bank under the Housing Finance Companies (NHB) Directions, 2010, as amended, with regard to deposits accepted from the public and the Rules framed there under and provision of Sections 73 to 76 and other relevant provisions of the Act. According to the information and explanation given to us, no order has been passed by the National Company Law Tribunal or the National Housing Bank or the Reserve Bank of India or any Court or any other Tribunal.
6) To the best of our knowledge and explanations given to us, the Central Government has not prescribed the maintenance of cost records under sub section (1) of Section 148 of the Act in respect of the activities undertaken by the Company.
7) In respect of Statutory dues :
a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has been generally regular in depositing its undisputed statutory dues such as Provident Fund, Employees State Insurance, Income Tax, Service Tax and any other material statutory dues, whichever is applicable to the Company with the appropriate authorities during the year. According to the information and explanation given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding as at March 31, 2017 for a period of more than six months from the date they became payable.
b) According to the information and explanations given to us, no statutory dues are outstanding on account of dispute.
8) According to the information and explanations given to us and based on the records of the Company examined by us, the Company has not defaulted in repayment of loans to any financial institutions, bank and dues to debenture holders. Company has not taken any loan from government.
9) The Company has generally applied the amount raised by way of term loans and public issue of debt instruments for the purpose for which they were obtained, other than temporary deployment pending application of those funds.
10) According to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year
11) I n our opinion and according to the information and explanations given to us, managerial remuneration has been paid or provided in accordance with the requisite approval mandated by the provision of Section 197 read with Schedule V to the Act.
12) In our opinion company is not a nidhi company. Therefore, the provisions of clause (xii) of paragraph 3 of the Order are not applicable to the Company.
13) I n our opinion and according to the information and explanations given to us, Company is in compliance with Sections 177 and 188 of the Act, wherever applicable, for all the transactions with related parties and their details have been disclosed in the standalone financial statements etc., as required by the applicable accounting standards.
14) The Company has issued equity shares against the warrants allotted on preferential basis in previous year. Company has complied with the requirement of Section 42 of the Act and amount raised has been used for purpose for which it was raised.
15) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transaction with the directors or persons connected with him and covered under Section 192 of the Act. Hence, clause (xv) of the paragraph 3 of the Order is not applicable to the Company.
16) To the best of our knowledge and as explained, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For Chaturvedi & Shah
(ICAI Firm Registration No. 101720W)
Date: May 3, 2017 ICAI Membership No.: 102749