TO THE MEMBERS OF
Birla Capital and Financial Services Limited
Report on the Financial Statements
We have audited the accompanying financial statements of BIRLA CAPITAL AND FINANCIALSERVICES LIMITED ("the Company") which comprise the Balance Sheet as at 31March 2016 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters in section 134(5)of the Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding of the assets of the Company and forpreventing and detecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial control thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
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 the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by Companys Directors as well as evaluating the overallpresentation of the financial statements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial 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 statement of affairs of the company as at31st March 2016 and its profit and its cash flow for the year ended on thatdate.
Emphasis of Matters
The reports should be read together with the Notes to the financial statements andattention to following matters be given:
a) Notes to the financial statements which describe the uncertainty related to theoutcome of the pendencys of appeals and legal matters filed by the company as wellas against the company.
Our opinion is not modified in respect of these matters.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 (theOrder) issued by the Central Government of India in terms of sub section (11) ofsection 143 of the Act we give in the Annexure A statement on the matters specified inthe paragraph 3 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 andobtained all the information and explanations which to the best of our knowledge andbelief 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 appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
d) In our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards referred to in section 133 of the CompaniesAct 2013 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 on record by the Board of Directors none of the directors is disqualified ason 31 March 2016 from being appointed as a director in terms of Section 164(2) of theAct.
f) With respect to the adequacy of the internal financial control 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 Auditors Report and to ourbest of our information and according to the explanations given to us: i. The Company hasdisclosed the impact of pending litigations on its financial position in its financialstatements; ii. The Company does not have any long-term contracts including derivativescontracts for which any provision is required; iii. The Company is not required totransfer amounts to the Investor Education and Protection Fund.
For Goyal Nitin & Associates
Firm Registration No.:016160C
CA Nitin Goyal
M. No 414520
Mumbai 30th May 2016
Annexure A to the Auditors Report
The Annexure referred to in Independent Auditors Report to the members of theCompany on the standalone financial statements for the year ended 31 March 2016 we reportthat:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has regular programme of physical verification of its fixed assets atreasonable intervals; 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) As explained to us physical verification of inventories has been conducted atreasonable intervals by the management; in our opinion the frequency of such verificationis reasonable.
The Company has granted any loans to one body corporate covered in the registermaintained under section 189 of the Companies Act 2013 (the Act)
| || || || || || ||(Amount in Lacs) |
|S/no. ||Name of Company ||Opening Balance ||Loan givenadjusted debited ||Repay Adjusted credited ||Max amount ||Closing Balance |
|1. ||Nirved Traders Pvt. Ltd ||365.47 ||NIL ||6.76 ||301.99 ||358.71 |
|2. ||Shearson Investments & Trading Co Pvt Ltd ||362.30 ||NIL ||NIL ||362.30 ||362.30 |
(a) In our opinion the rate of interest and other terms and conditions on which theloans had been granted to the bodies corporate listed in the register maintained underSection 189 of the Act were not prima facie prejudicial to the interest of the Company.
(b) In the case of the loans granted to the bodies corporate listed in the registermaintained under Section 189 of the Act have been regular in the payment of the principleand interest as stipulated.
(c) There are no overdue amounts in respect of the loan granted to body corporatelisted in the register maintained under Section 189 of the Act.
(iv) The Company in respect of loans investments guarantees and security theprovisions of section 185 and 186 of the Companies Act 2013 have been complied with.
(v) The Company has not accepted any deposits from the public.
(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.
(vii) (a) According to the information and explanation given to us and records examinedby us the company is regular in depositing undisputed statutory dues including providentfund employees state insurance income-tax sales-tax service tax duty ofcustoms duty of excise value added tax cess and any other statutory dues to theappropriate authorities. According to the information and explanation given to us therewere no undisputed amounts payable in respect of Income Tax Excise Duty cess and anyother statutory dues outstanding as on 31st March 2016 for a period more than six monthsfrom the date they became payable.
|Name of the Statute ||Period to which amount relates ||Amount of Dues (Rs.) ||Remarks |
|Service Tax ||F.Y. 2014-15 ||233 Lacs ||Service tax not included interest on the same. |
(b) According to the information and explanations given to us there are no materialdues of any in respect of income tax or sales tax or duty of customs or duty of excise orvalue added tax that have not been deposited with the appropriate authorities on accountof dispute.
|Name of the Statute ||Period to which amount relates ||Amount of Dues (Rs.) ||Forum where dispute is pending |
|Income Tax Act 1961 ||A.Y. 2009-10 ||Tax already adjusted against refund. ||ITATB Bench Mumbai |
| ||A.Y. 2011-12 ||63.25 Lacs ||CIT (A) Mumbai |
(viii) According to the records of the company examined by us and the information andexplanation given to us the company has not defaulted in repayment of loans or borrowingsto a bank as at the balance sheet date.
(ix) According to the information and explanations given to us and based on ourexamination of our records of the Company term loans were applied for the purposes forwhich those 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 given to us and based on ourexamination of our 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 notapplicable.
(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 given 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 person connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
For Goyal Nitin & Associates
CA Nitin Goyal
M. No - 414520
Mumbai 30th May 2016
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 internal financial controls over financial reporting of BIRLACAPITAL AND FINANCIAL SERVICES LIMITED ("the Company") as of March 31 2016in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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 companys policies the safeguardingof its 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 Companys 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 auditors judgement 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 Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 thecompanys 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 March 31 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
For Goyal Nitin & Associates
Firm Registration No.:016160C
CA Nitin Goyal
M. No 414520
Mumbai 30th May 2016