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Star Housing Finance Ltd.

BSE: 539017 Sector: Financials
NSE: N.A. ISIN Code: INE526R01010
BSE 00:00 | 30 Jul 92.35 -1.90






NSE 05:30 | 01 Jan Star Housing Finance Ltd
OPEN 94.25
52-Week high 109.00
52-Week low 52.00
P/E 93.28
Mkt Cap.(Rs cr) 145
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 94.25
CLOSE 94.25
52-Week high 109.00
52-Week low 52.00
P/E 93.28
Mkt Cap.(Rs cr) 145
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Star Housing Finance Ltd. (STARHOUSINGFIN) - Auditors Report

Company auditors report




We have audited the financial statements of Akme Star Housing Finance Limited("the Company") which comprise the Balance Sheet as at March 31 2020 theStatement of Profit and Loss Statement of Changes in Equity and the Statement of CashFlow for the year then ended and notes to the financial statements including a summaryof significant accounting policies and other explanatory information (hereinafter referredto as "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 theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") other accounting principles generally accepted in India of the stateof affairs of the Company as at March 31 2020 and its profit changes in equity and itscash flow for the year ended on that date


We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the

Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the financial statements.


We draw your attention to Note 6 (iii) to the financial statements which explain theuncertainties and the management's assessment of the financial impact due to thelock-downs and other restrictions and conditions related to the Covid-19 pandemicsituation for which a definitive assessment of the impact in the subsequent period ishighly dependent upon circumstances as they evolve. Further pursuant to the Reserve Bankof India ('RBI') Covid-19 Regulatory Package the Company has offered a moratorium on thepayment of instalments to all eligible borrowers classified as standard as on February 292020. As a result ageing of the accounts which have opted for moratorium has beendetermined with reference to days past due status as of February 29 2020. Our opinion isnot modified in respect of this matter.


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 on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Key Audit Matter

Impairment of loans to customers Our response to the Key audit Matter
• The Company reported total gross loans of 7710.15 Lakhs and 101.33 Lakhs of expected credit loss provisions as on March 31 2020 (Refer Note 6). • Our audit procedures included testing the design and operating effectiveness of key controls across the processes relevant to the ascertainment and measurement of ECL.
• Key judgements and estimates (Refer Note 32) in respect of the timing and measurement of expected credit losses (ECL) include: These controls/ processes included the allocation of assets into stages model governance data accuracy and completeness credit monitoring multiple economic
Impairment of loans to customers Our response to the Key audit Matter
• Allocation of assets to stage 1 2 or 3 using criteria in accordance with the Indian Accounting Standard 109; • The criteria used to allocate an asset to stage 1 2 or 3 in accordance with Ind AS 109 were evaluated. Assets in stage 1
• Accounting interpretations and modeing assumptions used to build the models that calculate the ECL; 2 and 3 were reviewed to verify that they were allocated to the appropriate stage.
• Completeness and accuracy of data used to calculate the ECL; • With the support of the team of modelling specialists employed by the Company to make the models we tested the assumptions inputs and formulas used in a sample of ECL models.
• Inputs and assumptions used to estimate the impact of multiple economic scenarios; - Completeness and valuation of post model adjustments; This included assessing the appropriateness of model design and formulas used the 'Probability of Default' 'Loss Given Default' 'Exposure at Default' historical loss rates
• Measurements of individually assessed provisions including the assessment of multiple scenarios; and used and the valuation of collateral. • To verify data quality calculation of the data used in the ECL was tested by reconciling to source systems. To test credit monitoring risk ratings were checked for a sample of performing loans.
• Accuracy and adequacy of the financial statement disclosures • Appropriateness of forecasted macroeconomic variables such as GDP Money supply and House Price Index were evaluated.
• The completeness and appropriateness of post model adjustments was assessed.
• The adequacy and appropriateness of disclosures for compliance with the Ind AS including disclosure of Ind AS 107 was ascertained


The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the AnnualReport for example Management Discussion and Analysis Board's Report includingAnnexures to Board's Report Business Responsibility Report Corporate Governance andShareholder's Information but does not include the financial statements and our auditors'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.

The other information is expected to be made available to us after the date of thisauditors' report. When we read the other information if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance.


The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance changes in equityand cash flows of the Company in accordance with the Ind AS and other accountingprinciples generally accepted in India. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; 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 the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

The Board of Directors is 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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3) (i) ofthe Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in

(i) planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the financialstatements.

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 also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.


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 'I' a statement on the matters specified in paragraphs 3and 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 purpose of our audit.

(b) In our opinion proper books of account 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 (including Other ComprehensiveIncome) Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder 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 as on March 312020 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 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 'II'.

(g) 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 by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

(h) 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 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i. The company does not have any pending litigations which would impact its financialposition.

i. The Company did not have any long term contracts including any derivative contractsfor which there were any material foreseeable 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

For H.R. JAIN & COMPANY Chartered Accountants Firm Registration No.000262C


Manoj Jain



Place: Udaipur