To The Members of Coastal Corporation Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Coastal CorporationLimited ("the Company") which comprise the Balance Sheet as at March 312017and the Statement of Profit and Loss the Cash Flow Statement for the year then ended anda summary of the significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's 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 standalone financial statements that give a true and fair view of the financialposition financial performance including cash flows of the Company in accordance with theaccounting principles generally accepted in India prescribed under section 133 of theAct.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's 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 the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence obtained by us 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 312017 and its profit and its cash flows for the year ended on that date.
The company has two subsidiaries one registered in India and the other incorporated inUnited States of America. Both are wholly owned subsidiaries. We have audited thefinancial statements of the wholly owned subsidiary company in India whose financialstatements reflects total assets of Rs.67.31 lakhs and total revenue of Rs.11.20 lakhs anda profit of Rs.0.19 lakhs for the year ended 31.03.2016. The wholly owned foreignsubsidiary company's accounts are reviewed by the auditors in that country which have beenconsidered in the consolidated statements which reflect total assets of Rs.15.43 croreswith total revenue of Rs.2.41 crores and a net loss of Rs.1.05 crores. The statements offoreign subsidiary company have been considered in the consolidated statements for theyear ended 31st March 2016 which have been furnished to us by the managementand our opinion on the statements in so far as it relates the amounts and disclosuresincluded in respect of the subsidiary is based solely on the reports of the auditor ofthat company.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in'Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
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 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 prescribed under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules2014
e) On the basis of the written representations received from the directors as on March312017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 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 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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements;
ii. The Company did not have any material foreseeable losses relating to long termcontracts including derivative contracts.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in the standalone financialstatements as regards its holding and dealings in Specified Bank Notes during the periodfrom November 8 2016 to December 30 2016 and theses are in accordance with the books ofaccounts maintained by the company. Refer o Note No.35 to the standalone financialstatements.
| ||For K.P.RAO ASSOCIATES |
| ||Chartered Accountants |
| ||Firm's Reg. No. : 003136S |
| ||Sd/- |
|Place : Visakhapatnam ||VVS BHAGAVAN |
|Date : 29 May 2017 ||Partner MNo.: 008571 |
Annexure - A to the Independent Auditors' Report
(Referred to in Paragraph 1 under 'Report on other legal and regulatory requirements'section
of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars includingquantitative
details and situation of fixed assets
(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of two years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.
(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) (a) As explained to us inventories have been physically verified during the yearby the 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 nature of its business.
(c) In our opinion and on the basis of our examination of the records the company isgenerally maintaining proper records of its inventories. No material discrepancy wasnoticed on physical verification of stocks by the management as compared to books records.
(iii) According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted any loans secured orunsecured to companies forms or other parties listed in the register maintained undersection 189 of the Companies Act 2013 except for advances to the tune of Rs 103.19 lakhsto one of the companies in which two of the directors are interested. No interest wascharged as the advances are purely temporary.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provision of sections 185 and 186 of the Companies Act2013.
(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 explanations given to us and on the basis ofour examination
of the books of accounts the company has been generally regular in depositingundisputed statutory dues including provident fund employee state insurance income taxservice tax value added tax cess and other statutory dues during the year with theappropriate authorities. As on 31st March 2017 there are no undisputed statutory duespayable for period exceeding for a period more than six month from the date they becomepayable.
(b) According to the information and explanations given to us there were no statutorydues pending in respect of income tax sales tax VAT custom duty and cess etc..
viii) In our opinion and according to the information and explanation given to us. TheCompany has not defaulted in repayment of loans or borrowings to the Banks or financialinstitutions and banks. The company has not issued any debentures.
(ix) The company has not raised any money by way of public issue from the public. Inour opinion
and according to the information and explanation given to us the company has takenloans from NBFCs on instalment basis for purchase of Assets. The loans taken have beenapplied during the year for the purposes for which they 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 the 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 Companies Act 2013.
(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 CARO 2016 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 standalone financial statements as required by theapplicable accounting 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 persons connected with them. Accordingly Section 192 ofthe Companies Act 2013 is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For K.P.RAO ASSOCIATES |
| ||Chartered Accountants |
| ||Firm's Reg. No. : 003136S |
| ||Sd/- |
| ||VVS BHAGAVAN |
|Place : Visakhapatnam ||Partner |
|Date : 29th May 2017 ||Membership number: 008571 |