The Members of
AKME STAR HOUSING FINANCE LIMITED
We have audited the accompanying financial statements of Akme Star Housing FinanceLimited (the Company') which comprises the Balance Sheet as at 31st March 2017the statement of Profit and Loss Account the Cash Flow Statement and the statement ofchanges in Equity for the year ended and a summary of significant accounting policies andother explanatory information incorporated in the Schedules and Notes to Accounts.
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 financial statements that give a true & fair view of the financial positionfinancial performance and cash flows and changes in Equity of the company in accordancewith the accounting principles generally accepted in India including the AccountingStandards prescribed under section 133 of the Act read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments 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 financialstatements that give a true and fair view and are free from material misstatementswhether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with Auditing Standards specified under section143(10) of the Act. Those standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the financialstatements are free from material mis-statements.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on auditor'sjudgment including the assessment of risks of material misstatements whether due tofraud or error. In making those risk assessments the audit considers internal financialcontrol relevant to the Company's preparation of the financial statements that give a trueand fair view 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 the Company'sDirectors as well 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 financial statements..
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 the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the financial position of the Company as atMarch 31 2017 and its financial performance including other comprehensive income itsCash flows and the changes in Equity 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 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 and 4 of the order to the extent applicable.
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 accounts as required by the law have been kept bythe company so far as it appears from our examination of those books.
c. The Balance Sheet the Profit and Loss Statement the Cash flow Statement and thestatement 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 theaccounting standards specified under Section 133 of the Companies Act 2013 read withrelevant rules issued there under;
e. On the basis of the written representations received from the directors taken onrecord by the Board of Directors none of the directors is disqualified as on March 312017 from being appointed as a director in terms of Section 164(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 B; and
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 does not have any pending litigations which would impact its financialposition.
ii. The company does not have any such long term contracts including derivativecontracts which can arise any material forseeable losses.
iii. There has not been any occasion in case of the company during the year underreport to transfer any sum to the Investor Education and Protection Fund
iv. The Company has provided requisite disclosures in its financial statements as toholding as well as dealings in specified Bank Notes during the period from 8 November 2016to 30 December 2016 and these are in accordance with the books of accounts maintained bythe Company. Refer Notes to the financial statements.
For H.R. JAIN & COMPANY
Firm Registration No. 000262C
11th May 2017
Annexure - A to the Auditors' Report
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2017 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assetswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets and no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) The Company is Housing and other Finance company and the company's business doesnot hold any physical inventories. Thus paragraph 3(ii) of the Order is not applicable tothe Company.
(iii) As per the information and records made available the Company has grantedunsecured loans to three companies covered in the register maintained under section 189 ofthe Companies Act 2013 (the Act'). In our opinion the rate of interest and otherterms and conditions on which the short term advance had been granted to the said partieswere not prima facie prejudicial to the interest of the Company. Further the borrowershave been regular in the payment of the principal and interest as stipulated and therewere no overdue amount in respect of such loans advance granted. The maximum amountinvolved during the year was Rs. 843 Lakhs and the year end balance of loan to suchparties was NIL (Previous year Nil)
(iv) In our opinion and according to the information and explanations given to us thecompany has not provided/made any loans investments guarantees and securities under theprovisions of section 185 and 186 of the Act.
(v) The company has not accepted any deposits from the public and hence the provisionsof section 73 to 76 and any other relevant provisions of the Act or any other directivesof RBI are not applicable to the company.
(vi) The Central government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the business activity or services by the company.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income-taxsales tax value added tax duty of customs service tax cess and other materialstatutory dues have been regularly deposited during the year by the Company with theappropriate authorities. As explained to us the Company did not have any dues on accountof employees' state insurance and duty of excise.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax value added tax duty ofcustoms service tax cess and other material statutory dues were in arrears as at 31March 2017 for a period of more than six months from the date they became payable.
(viii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the company has not defaulted in repaymentof loans and borrowings to any financial institution Bank government or dues todebenture holders.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer during the year. The company has raised term loans and cash credit limit fromthe banks financial institutions and the said funds were applied for the purpose forwhich those funds were raised.
(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company.
Accordingly paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him.
Accordingly paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is a housing Finance company governed by NHB Act. And the company isnot required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
For H.R. JAIN & COMPANY
Firm Registration No. 000262C
11th May 2017
Annexure - B to the Auditors' Report
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 internalfinancial controls over financial reporting of Akme Star Housing Finance Limited("the Company") as of 31 March 2017 in conjunction with our audit of thestandalone financial statements of 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 (ICAI'). 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 31 March 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 H.R. JAIN & COMPANY
Firm Registration No. 000262C
11th May 2017