SBI HOME FINANCE LIMITED
ANNUAL REPORT 2007-2008
The Members of
SBI Home Finance Limited
1. We have audited the attached Balance Sheet of SBI Home Finance Limited
as at 31st March 2008 and also the Profit & Loss Account and the Cash Flow
Statement for the year ended on that date annexed thereto. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
2. We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by the management, as well
as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
3. Attention is invited to the following:
We draw attention to Note 1 of Schedule-13 in the financial statements. The
Company incurred a net loss of Rs.1824.58 lass during the year ended 31st
March 2008 and as of that date the accumulated loss was Rs. 30956.10 lacs,
the net worth was negative and total liabilities exceeded its total assets
by Rs. 29456.10 lacs. Considering these factors along with other matters,
we are of the opinion that the Company is no longer a going concern.
4. As required by the Companies (Auditor's Report) Order, 2003 issued by
the Central Government in terms of sub-section (4A) of Section 227 of the
Companies Act, 1956, we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
5. Further to our comments referred to in paragraph 3 and in the Annexure
referred to in paragraph 4 above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of audit.
(ii) 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.
(iii) The Balance Sheet and the Profit & Loss Account dealt with by this
report are in agreement with the books of account.
(iv) In our opinion, the Balance Sheet and Profit & Loss Account dealt with
by this report comply with the accounting standards referred to in sub-
section (3C) of Section 211 of the Companies Act, 1956.
(v) On the basis of the written representations. received from the
Directors as on 31st March 2008 and taken on record by the Board of
Directors, we report none of the Directors is disqualified as on 31st
March 2008 from being appointed as a Director in terms of clause (g) of
subsection (1) of Section 274 of the Companies Act, 1956.
(vi) In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read in conjunction with
Schedules 1 to 13, give the information required by the Companies Act, 1956
in the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the Company
as at 31st March 2008 and
b) in the case of the Profit & Loss Account, of the loss for the year ended
on that date.
c) in the case of Cash Flow Statement, of the cash flows for the year ended
on that date.
For S.N. MUKHFRJI & CO.
Sudip K. Mukherji
Place : Kolkata Partner
Date : 18th April, 2008. (Membership No. 13321)
ANNEXURE TO AUDITORS' REPORT
Referred to in paragraph 4 of our report of even date.
(i) (a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) We were given to understand that the management has physically verified
the fixed assets during the year and this revealed no material
discrepancies during such verification between book records and physical
(c) We also draw attention to Note 1 and 8 of Schedule-13 of the financial
statements where it has been stated that the Company is not a going
(ii) In view of the nature of the Company's business, the matter prescribed
in this clause is not applicable to the Company.
(iii) The Company has not granted or taker any loan secured or unsecured
to/from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the explanations given to us there is
an adequate internal control procedure commensurate with the size of
Company and nature of its business, for purchase of fixed assets. The
Company does not dealt with purchase and sale of goods and services. As
such there is no major weakness in internal control system during the
period under audit.
(v) There are no contracts or arrangements referred to Section 301 of the
Act have been entered in the register required to be maintained under that
(vi) Sections 58A and 58AA or any other relevant provisions of the
Companies Act, 1956 is not applicable to the Company as it is operating as
a Housing Finance Company. The public deposit accepted by the Company is
governed by the National Housing Bank's Directions, 2001. During the year,
the Company has not accepted any public deposit. However, Rs. 216.47 lacs
remains unclaimed as on 31st March 2008 but the same amount has been fully
funded with State Bank of india. As such no order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of India
or any other Tribunal in respect of the public deposit.
(vii) The Company has no internal audit system. As per the information and
explanations given to, us, the internal audit has not been introduced as
the Company has stopped its operational activity. Attention is also drawn
to Note 1 of Schedule 13 of the financial statements.
(viii) In view of the nature of the Company's business, the matter
prescribed in this clause is not applicable to the Company.
(ix) The Company has been regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund, Income
Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other
statutory dues with the appropriate authorities. As informed to us,
Employees' State Insurance Scheme is not applicable to the Company. As per
the information and explanations given to us, no cess is payable under
Section 441A of the Companies (Second Amendment) Act, 2002.
(x) According to the information and explanations given to us, there are no
dues under dispute before any taxation authorities. However, appeals filed
by the company before Commissioner of Income Tax (Appeals) for the
assessment years 1999-2000, 2000-01 and 2001-02 against disallowences of
certain provisions/expenses are pending. Appeal before Income Tax Appellate
Tribunal for the Assesment Years 2002-03 and 2003-04 against disallowance
of certain provisions/ expenses have been partly allowed However the same
does not have any financial implication on the Company.
(xi) The Company has been registered for a period more than five years and
has accumulated loss of Rs.30956.10 lacs as do 31st March 2008. which has
totally eroded the net worth. The Company has reported a cash loss of
Rs.1824.58 lacs and Rs. 467.31 lacs for the financial year ended 31 st
March 2008 and 31st March 2007 respectively.
(xii) The Company has defaulted in repayment of dues to Bank. The amount of
default is Rs.30338.14 lacs as on 31st March 2008 and started defaulting
since September 2003. However, during the year under report the Company
made a payment of (Previous Years - Rs. 2001.30 lacs) Rs. 553.00 lacs
towards part discharge of unpaid interest on the loan with State Bank of
(xiii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other investments
during the financial. year 2007-08.
(xiv) The provision of any special statutes applicable to the Chit Funds,
Nidhi or Mutual Benefit Society are not applicable to the Company.
(xv) The Company is not dealing or trading in shares, securities,debentures
and other investments.
(xvi) The Company has not given any guarantee for loans taken by others
from bank or financial institutions.
xvii) During the current financial year, the Company has not obtained any
(xviii) During the current financial year, the Company has not raised any
funds on short-term basis.
(xix) During the current financial year, the Company has not made any
preferential allotment of shares to parties and companies covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(xx) No debentures have been issued during the current financial year.
(xxi) No money has been raised by public issues during the current
(xxii) As per the information and explanations given to us no fraud on or
by the Company has been noticed or reported during the current financial
For S.N. MUKHERJI & CO.
Sudip K. Mukherji
Place : Kolkata Partner
Date : 18th April, 2008 (Membership No. 13321)