TO THE SHAREHOLDERS OF ARIHANT'S SECURITIES LIMITED
We have audited the accompanying financial statements of M/s. Arihant's SecuritiesLimited ("the Company") which comprise the Balance Sheet as at 31 March2016 the Statement of Profit and Loss Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters in section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesenancial statements that give a true and fair view of the nancial position nancialperformance and cash ows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards speci ed under Section 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibilityalso includes the maintenance of adequate accounting records in accordance with theprovision of the Act for safeguarding of the assets of the Company and for preventing anddetecting the frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of internal nancial control that were operating
e ectively for ensuring the accuracy and completeness of the accounting recordsrelevant to the preparation and
presentation of the nancial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these nancial 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 the Standards on Auditing speci ed undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform theaudit to obtain reasonable assurance about whetherthe nancial statements are free from material misstatement
An audit involves performing procedure to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements 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 management aswell as evaluating of 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.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
i. in the case of the Balance Sheet of the state of affairs of the Company as at 31March 2016;
ii. in the case of the Statement of Profit and Loss of the Profit for the year endedon that date; and
iii. in the case of the Cash Flow Statement of the cash flows for the year ended onthat date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order2015 ("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 statement on the matters specified in paragraphs 3 and4 of the Order.
2As 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 purposes 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 Statement of Profit and Loss and Cash Flow Statement dealt withby this report are in agreement with the books of account.
d. In our opinion the aforesaid nancial statements comply with the AccountingStandards speci ed under 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 31 March2016 taken onrecord by the Board of Directors none of the directors is disquali ed as on31 March 2016 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 included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditor's) Rules2014 and to the best of ourinformation and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its nancialposition
ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses
ANNEXURE TO INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 7 of our report of even date under the caption "Reporton Other Legal and Regulatory Requirements)
The Annexure referred to in our report to the members of Arihant Securities Limited("the Company") for the year ended 31 March 2016. We report that:
1.(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of itsfixed assets.
(b)As explained to us fixed assets have been physically verified by the management atreasonable intervals; no material discrepancies were noticed on such verification.
2.a) As explained to us inventories have been physically verified during the year bythe management at reasonable intervals.
(b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.
(c) In our opinion and on the basis of our examination of the records the Company isgenerally maintaining proper records of its inventories (shares). No material discrepancywas noticed on physical verification of stocks by the management as compared to bookrecords
3. (a) The Company has not granted any loans secured or unsecured to/from companiesfirms or other parties covered in the register maintained under section 189 of the act.
4. In our opinion and according to the information and explanations given to us thereis generally an adequate internal control procedure commensurate with the size of thecompany and the nature of its business for the purchase of inventories & fixed assetsand payment for expenses & for sale of goods. During the course of our audit no majorinstance of continuing failure to correct any weaknesses in the internal controls has beennoticed. 5 The Company has not accepted any deposits from the public covered under section73 to 76 of the Companies Act 2013. 6The Company is not required to maintain cost recordsunder section 148(1) of the Companies Act 2013.
7. (a) Accordingto the information and explanations given to us and on the basis of ourexamination of the books of account wherever necessary the Company is regular indepositing with appropriate authorities undisputed statutory dues including ProvidentFund Tax deducted at source Excise Duty Customs Duty Employees State Insurance FundCess and other material statutory dues applicable to it. According to the information andexplanations given to us no undisputed amounts payable in respect of above were inarrears as at 31 March 2016 for a period of more than six months from the date theybecame payable.
(b) According to the information and explanations given to us there are no dues ofProvident Fund Tax deducted at source Excise Duty Service Tax Customs Duty EmployeesState Insurance Fund and Cess which have not been deposited with appropriate authoritieson account of any dispute.
8. The Company does not have any accumulated loss and has not incurred cash loss duringthe financial year covered by our audit and in the immediately preceding financial year.
9. Based on our audit procedures and on the information and explanations given by themanagement we are of the opinion that the Company has not defaulted in repayment of duesto a financial institution bank or debenture holders.
10. According to the information and explanations given to us the Company has notgranted loans and advances on the basis of security by way of pledge of shares debenturesand other securities.
11. According to the information and explanations given to us the Company has notgiven any guarantees for loans taken by others from banks and financial institutions.
12. The Company has not taken any Term Loan during the year. Hence the provision ofclause 3 (xi) of the Order is not applicable to the Company.
13. Based on the audit procedures performed and the information and explanations givento us and during the course of our examination of the books and records of the company wereport that no fraud on or by the Company has been noticed or reported during the yearnor have we been informed of such case by the management
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 ("the Company") as of 31 March2016 in conjunction with our audit of the financial statements of the Company for the yearended 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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 2016 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.
The Board of Directors Arihant 's Securities Ltd
1. We have audited the accompanying financial statements of M/s. Arihant'sSecurities Limited ("the
Company") which comprise the Balance Sheet as at 31 March 2016 the Statement ofProfit and Loss Cash Flow Statement for the year then ended and a summary of significantaccounting policies and other explanatory information and issued our Audit opinion dated28 May 2016 thereon. These financial statements are the responsibility of the Company'sManagement. Our responsibility is to express an opinion on these financial statementsbased on our audit. Our Audit was conducted in the manner specified in paragraph 2 of theAudit Report.
2. As required by the "Non-Banking Financial Companies Auditor's Report (ReserveBank) Directions 2008" issued by the Reserve Bank of India ("the Bank" orRBI) and amended from time to time ("the Directions") and based on our auditreferred to in paragraph 1 above and based on the information and explanations given to uswhich to the best of our knowledge and belief were necessary for this purpose we reporthereunder on the matters specified in paragraph 3 of the Directions:
a. The Company is engaged in the business of Non-Banking Financial Institution ('NBFI')as defined in section 45-I(a) of the Reserve Bank of India Act 1934 ('the Act') duringthe year ended 31 March 2015 and it has obtained Certificate of Registration No. :07.00211 dated 1 April 1998 from Reserve Bank of India;
b. Based on the asset/income pattern as on March 31 2016 determined by the Managementin accordance with the audited financial statements for the year ended as on that dateand with reference to paragraph 15 of the Non-Banking Financial (Non-Deposit Accepting orHolding) Companies Prudential Norms (Reserve Bank) Directions 2007 the Company isentitled to continue to hold such Certificate of Registration;
c. Based on the criteria set forth by the Bank in Circular No. DNBS.PD. CC No. 85 /03.02.089 /2006-07 dated December 6 2006 for classification of NBFCs the Company hasbeen correctly classified as Investment Companyas defined in Non-Banking FinancialCompanies Acceptance of Public Deposits (Reserve Bank) Directions 1998 with reference tothe business carried on by it during the financial year ended March 31 2016;
d. The Board of Directors in their meeting held on May 302015 has passed a resolutionfor non- acceptance of any public deposits without prior approval of Reserve Bank of Indiain writing.
e. The Company has not accepted any public deposits during the year ended March 312016;
f. The Company has complied with the prudential norms relating to income recognitionaccounting standards asset classification and provisioning for bad and doubtful debts asapplicable to it in terms of Non-Banking Financial (Non-Deposit Accepting or Holding)Companies Prudential Norms (Reserve Bank) Directions 2007 for the year ended March 312016;
| ||For N.R. KRISHNAMOORTHY & CO. |
| ||Chartered Accountants |
| ||Sd/- |
| ||N.R. KRISHNAMOORTHY |
|Place : Chennai ||Partner |
|Date : 28.05.2016 ||Membership No. : 020638 |
| ||FRN : 001492S |