THE MEMBERS SRG HOUSING FINANCE LIMITED
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
We have audited the accompanying Financial Statements of SRG Housing Finance Limited(the Company) which comprise the Balance Sheet as at March 31 2019 theStatement of Profit and Loss and the Cash Flow Statement 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 financial statements give the information required by theCompanies Act 2013 (the Act) in the manner so required and give a true and fair view inconformity 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 March31 2019.
b) In the case of the Statement of Profit and Loss of the profit for the year ended onthat date; and
c) In the case of the Cash Flow Statement of the cash
Basis for opinion
We conducted our audit of the financial in accordance with the Standards on Auditingspecified responsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the financial statements under the provisions of the Act and theRules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence obtained by us is sufficient and appropriate to provide a basis for ouraudit opinion on the financial statements.
Key audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion onfor these yearendedon that date. matters.
We have determined the matter mentioned below to be the key audit matters to becommunicated in our report.
|Key audit Matter ||Auditor's response |
|Provision and Contingencies ||We assessed that from Financial year 2018-19 onwards the Company adopted the procedure of routing provisions for contingencies against Standard Assets and NPA through Statement of Profit & Loss while previously it was appropriated through Reserve & Surplus. Consequently the figures of Profit after tax and related figures thereof year have been restated accordingly. of previous financial |
| ||We found these key controls were designed implemented and operated effectively and therefore determined that we could place reliance on these key controls for the purposes of our audit. |
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON
The Company's Board of Directors are responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's report including the Annexures to Board's ReportCorporate Governance and Shareholder's Information but does not include the financialstatements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's Board of Directors are responsible for the matters stated in Section134(5) of the Companies Act 2013 (the Act) with respect to the preparation ofthe Financial Statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in
India specified including the Accounting Standards under Section 133 of the Act readwith Rule 7 of The Companies (Accounts) Rules 2014. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting the frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Financial Statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process.
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these 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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
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 theAct we are also responsible for expressing our opinion on whether theCompany has adequate 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialdisclosures and whether the financial represent the underlying transactions and events ina manner that achieves fair presentation. Materiality is the magnitude of misstatements inthe financial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the 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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order 2016 (the Order)as issued by Central Government of India in terms of Sub Section (11) of Section 143 ofthe Act we hereby give in the Annexure A a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act based on our audit 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 purposes of our audit;
b. In our opinion proper books of accounts as required by law have been kept by theCompany so far as it appears from our examination of those books;
c. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of accounts;
d. In our opinion the aforesaid financial statements comply with the AccountingStandards referred to in Section 133 of the Act read with Rule 7 of The Companies(Accounts) Rules 2014;
e. On the basis of written representations received from the Directors and taken onrecord by the Board of Directors none of the Directors is disqualified as on March 312019 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. 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 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 did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses;
iii. There were no amounts required to be transferred to the Investor Education andProtection Fund by the Company.
h. 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 to the Managing Director of the Company is in accordance with theprovisions of Section 197 along with Schedule V o Companies Act 2013 and the remunerationlimit is in accordance with the first proviso of Section 197(1) and Schedule V ofCompanies Act 2013.
ANNEXURE-A TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in para 1 under report on other Legal and regulatoryrequirement of our report of even date)
1. According to the information and explanations given to us in respect of the fixedassets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the year and nodiscrepancies between the book records and the physical inventory have been noticed. Inour opinion the frequency of verification is reasonable.
(c) we report that the title deed of the immovable property is held in the name of theCompany as at the balance sheet date. Immovable property of land whose title deed has beenpledged as security for non-convertible debentures is held in the name of the Company.
2. The Company does not have any inventory and hence reporting under clause (ii) ofparagraph 3 of the Order is not applicable.
3. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to Companies Firms Limited Liability Partnershipsor other parties covered in the register maintained under Section 189 of The CompaniesAct 2013 and therefore clause (iii) of paragraph 3 of the Order is not applicable.
4. The Company has not advanced any loan or given any guarantee or provided anysecurity or made any investment covered under Section 185 and 186 of the Act. Thereforeclause (iv) of paragraph 3 of the Order is not applicable.
5. As per the Ministry of Corporate Affairs notification dated March 31 2014 theprovisions of Sections 73 to 76 or any other relevant provisions of The Companies Act2013 and The Companies (Acceptance of Deposits) Rules 2014 as amended with regardto the deposits accepted are not applicable to the Company. According to information andexplanations given to us the Company has not accepted any deposits during the year.
6. According to the information and explanations given to us the Central Governmenthas not prescribed maintenance of cost records under Sub-Section (1) of Section 148of the Act in respect of the activities carried on by the Company.
7. According to the information and explanations given to us:
a) The Company is regular in depositing undisputed statutory dues including ProvidentFund Employees State Insurance Income Tax Cess Goods and Service Tax and any otherstatutory dues as applicable with the appropriate authorities. b) There are no undisputedstatutory dues payable in respect of Provident Fund Employees' State InsuranceIncome-tax Service Tax Value Added Tax Cess GST and other material statutory dues inarrears as at March 31 2019 for a period of more than six months from the date theybecame payable.
c) There were no dues of Income Tax Sales Tax Wealth Tax Service Tax Value AddedTax GST as at March 31 2019 which has not been deposited on account of dispute.
8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to FinancialInstitutions Banks and dues to Debenture Holders. The Company has not taken loans orborrowings from Government.
9. The Company has not raised moneys by way of Initial Public Offer or Further PublicOffer (including debt instruments) during the year. The Company has raised funds by way ofraising Term loans and during the year and the same were applied by the Company for thepurpose for which they were raised.
10. According to the information and explanations given to us no fraud by the Companyand no fraud on the Company by its officers or employees has been noticed or reportedduring the year.
11. According to the information and explanations given to us the Company has paid /provided managerial remuneration in accordance with the requisite approvals mandated bythe provisions of Section 197 read with Schedule V to The Companies Act 2013.
12. The Company is not a Nidhi Company; hence reporting under clause (xii) of paragraph3 of the Order is not applicable to the Company.
13. According to the information and explanations given to us the Company is incompliance with Section 177 and 188 of The Companies Act 2013 wherever applicable forall transactions with the related parties and the details of related party transactionshave been disclosed in the notes on Financial Statements as required by the applicableaccounting standards.
14. According to the information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Therefore provision of clause (xiv) of paragraph 3 of theOrder is not applicable to the Company.
15. According to the information and explanations given to us the Company has notentered into any non-cash transactions with Directors or persons connected with him underprovisions of Section 192 of The Companies Act 2013. Therefore provision of clause (xv)of paragraph 3 of the Order is not applicable to the Company.
16. According to the information and explanations given to us the Company is notrequired to be registered under Section 45-lA of The Reserve Bank of India Act 1934.
ANNEXURE-B TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in para 2(f) under report on other Legal and regulatoryrequirement of our report of even date)
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 SRG HousingFinance Limited (the Company) as of March 31 2019 in conjunction with ouraudit of the 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 Reporting (the'Guidance Note) issued by The Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
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 and the Standards on Auditing issued by the ICAI and prescribedunder Section 143(10) of the Act 2013 to the extent applicable to an audit of internalfinancial controls both issued by The Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand 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 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 purposes in accordance with generally accepted accountingprinciples. A Company's internal financial control over financial reporting includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe Company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of Financial Statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorizations of management and Directors of the Company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition use or disposition of the Company's assets that could have a material effecton 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 overfinancial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria 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.
| ||For pKJ & co. |
| ||Chartered Accountants |
| ||FRN: 124115W |
| ||rishabh Jain |
|Place: Udaipur ||Partner |
|Date: 29.05.2019 ||Membership No. 176309 |