To the Members of Centrum Capital Limited
Report on the standalone Financial Statements
We have audited the accompanying standalone financial statements of Centrum CapitalLimited ("the Company") which comprise the Balance Sheet as at March 31 2016the Statement of Profit and Loss the Cash Flow Statement for the Nine Month period 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 stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese 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 including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls andensuring their operating effectiveness and the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
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 standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompanys preparation of the standalone financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Companys Directors as wellas evaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2016 its profit and its cash flows for the Nine month period ended onthat date.
Emphasis of Matter
We draw attention to the following matters in the notes to the standalone financialstatements:
1. Note No. 39 wherein for the reason stated in the note the Company has not madeprovision for diminution in the carrying amount of Investments of Rs 19428125 (P.Y: Rs19428125) in Centrum Capital Holding LLC (CCH LLC) Rs 500000 (P.Y: Rs500000) in Centrum Infrastructure Advisory Limited (CIAL) and Rs 500000 (P.Y: Rs500000) in Centrum Defence Systems Limited (CDSL) and non recoverability of loans andadvances amounting to Rs 6527267 (P.Y: Rs 6272559) to CCH LLC; Rs 6714263 (P.Y: Nil)to CIAL and Rs 8912831 (P.Y: Rs 2650000) to CDSL.
2. Note No. 37 wherein in the opinion of the management long outstanding tradereceivables of Rs 45832632 (P.Y: Rs 45832632) are considered good and fullyrecoverable.
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 1" a statement on the mattersspecified in paragraphs 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 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 the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;
d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014; e. On the basis of written representations received fromthe directors as on March 31 2016 and taken on record by the Board of Directors none ofthe directors is disqualified as on March 31 2016 from being appointed as a director interms 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 we give ourseparate Report in "Annexure 2".
j. With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the
Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements Refer Note 28 on ContingentLiabilities;
(ii) The Company did not have any long-term contracts including derivative contracts.Hence the question of any material foreseeable losses does not arise;
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
Annexure 1 to The Independent Auditors Report
Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements in the Independent Auditors Report of even date to the members ofCentrum Capital Limited on the standalone financial statements for the Nine Month periodended March 31 2016
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) During the period the fixed assets of the Company have been physically verified bythe management and as informed no material discrepancies were noticed on suchverification. In our opinion the frequency of verification is reasonable having regard tothe size of the Company and the nature of its assets.
(c) The title deeds of immovable properties recorded as fixed assets in the books ofaccount of the Company are held in the name of the Company.
(iI) (a) The inventory comprising of securities & bonds which are held indematerialized form have been verified by the management during the period. In ouropinion the frequency of verification is reasonable.
(b) The procedures of verification of inventory followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
(c) The Company is maintaining proper records of inventory. As informed no materialdiscrepancies were noticed on verification carried out during the period.
(iii) The Company has granted unsecured loans to companies covered in the registermaintained under Section 189 of the Act.
(a) According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that the terms and conditions of theaforesaid loans granted by the Company are not prejudicial to the interest of the Company.
(b) The aforesaid loans are repayable on demand. Accordingly provision of Clause3(iii) (b) and (c) of the Order are not applicable to the Company.
(iv) Based on information and explanation given to us in respect of loans investmentsguarantees and securities the Company has complied with the provisions of Section 185 and186 of the Act.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the provisions of Sections 73to 76 of the Act and the rules framed there under.
(vi) The Central Government has not prescribed the maintenance of cost records for anyof the products of the Company under sub-section (1) of Section 148 of the Act and therules framed there under.
(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees stateinsurance income tax sales tax service tax value added tax customs dutyexcise duty cess and any other material statutory dues applicable to it however therehave been slight delay in few cases / delays in deposit have not been serious.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees state insurance income tax salestax service tax value added tax customs duty excise duty cess and any other materialstatutory dues applicable to it were outstanding at the period end for a period of morethan six months from the date they became payable.
(b) According to the information and explanation given to us the dues outstanding withrespect to income tax sales tax service tax value added tax customs duty excise dutyon account of any dispute are as follows:
|Name of the statute ||Nature of dues ||Amount (Rs) ||Period to which the amount relates ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income Tax ||848030* ||A.Y.2008-09 ||CIT (A) |
|Income Tax Act 1961 ||Income Tax ||3381769 ||A.Y.2010-11 ||ITAT (Mumbai) |
|Income Tax Act 1961 ||Income Tax ||1233075 ||A.Y.2011-12 ||ITAT (Mumbai) |
|The Finance Act 1994 (Service Tax provisions) ||Service Tax ||1477923 ||F.Y. 2002-06 ||Additional Commissioner of Service Tax |
* Net of Rs 1848030 paid under protest
(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of dues to banks and debenture holders. Also according to theinformation and explanation given to us the Company has not borrowed money from anyfinancial institutions or government.
(ix) In our opinion and according to the information and explanations given to us theCompany has utilized the money raised by way of the term loans during the period for thepurposes for which they were raised.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the period nor have we been informed of any such instance bythe management.
(xi) According to the information and explanations given to us managerial remunerationhas been paid/ provided in accordance with the requisite approvals mandated by theprovisions of Section 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. Therefore paragraph 3(xii) of the Order is not applicableto the Company.
(xiii) According to the information and explanation given to us all transactionsentered into by the Company with the related parties are in compliance with Sections 177and 188 of Act where applicable and the details have been disclosed in the FinancialStatements etc. as required by the applicable accounting standards.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the period under review.Therefore paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) 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 duringthe period.
(xvi) According to the information and explanation given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
Annexure 2 to The Independent Auditors Report
[Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements in the Independent Auditors Report of even date to the members ofCentrum Capital Limited on the standalone financial statements for the Nine Month periodended March 31 2016]
Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of CentrumCapital Limited ("the Company") as of March 31 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the Nine Month periodended 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 essential components of internal control stated inthe Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issuedby the Institute of Chartered Accountants of India (ICAI). These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to companys 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 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 specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 consideringessential components of internal control stated in the Guidance Note issued by ICAI.
For Haribhakti & Co. LLP
ICAI Firm Registration No.103523W
Membership No. 034828
Place : Mumbai
Date : 30th May 2016