To the Members of M/s. Dharani Finance Limited
Report on the Financial Statements
We have audited the accompanying standalone financial statements of M/s. DharaniFinance Limited ("the Company") which comprise the Balance sheet as at 31March 2016 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary 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 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 and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial 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.
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 andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial control systemover financial reporting and the operating effectiveness of such controls. 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 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 31 March 2016 and its profit and its cash flows for the year ended on that date.
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 of India in terms of sub-section (11) of Section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section143(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 Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014;
(e) On the basis of the written representations received from the directors as on 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms ofsub-section (2) of section 164 of the Act;
(f) With respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness o f such controls referto our separate report in "Annexure B".
(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 in our opinionand to the best of our information and according to the explanations given to us:
i. the Company does not have any pending litigations which would impact its financialposition
ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund.
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31 March 2016 we reportthat:
1. a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The Company has a phased programme of physical verification of fixed assetswhich in our opinion is reasonable having regard to the size of the Company and natureof its assets. In accordance with such programmes the management has physically verifiedfixed assets during the year and no material discrepancies were noticed on suchverification.
c) According to the information and explanation given to us the Company does notpossess any immovable property. Hence paragraph 3(i)(c) of the order is not applicable.
2. The Company's nature of operations does not require it to hold inventories.Accordingly paragraph 3(ii) of the order is not applicable.
3. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnership or other parties covered in the register maintained undersection 189 of the Companies Act 2013.
4. In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of Section 185 and 186 of the Companies Act2013 in respect of loans investments guarantees and security.
5. The Company has not accepted any deposits from the public and consequently thedirectives issued by the Reserve Bank of India the provisions of Sections 73 to 76 or anyother relevant provisions of the Companies Act 2013 and the rules framed there under arenot applicable.
6. According to the information and explanations given to us the CentralGovernment has not prescribed the maintenance of cost records under sub section (1) ofsection 148 of the Companies Act 2013.Accordingly clause vi of paragraph 3 of Companies(Auditors Report) Order 2016 is not applicable.
7. a) According to the information and explanations given to us and on the basisof our examination of the books of account the Company has been regular whereverapplicable in depositing with appropriate authorities undisputed statutory dues includingprovident fund employee's state insurance income-tax sales-tax customs duty exciseduty service tax Value added tax cess and any other statutory dues. According to theinformation and explanations given to us no undisputed dues payable in respect ofprovident fund employee's state insurance income-tax sales tax customs duty exciseduty service tax Value added tax and cess were outstanding as at 31 March 2016 for aperiod of more than six months from the date they became payable.
b) Statement of Disputed Dues
|Nature of the statute || |
Nature of the dues
Amount Rs. In Lakhs
Period to which the amount relates
Forum where dispute is pending
|NIL ||NIL ||NIL ||NIL ||NIL |
8. The Company did not have any outstanding dues to Banks /financialinstitutions/debenture holders during the year.
9. In our opinion the Company has not obtained any term loans.. During the yearthe company has not raised money by way of initial public offer or further public offer.Accordingly paragraph 3(ix) of the order is not applicable.
10. In our opinion and according to the information and explanations given to usno fraud on or by the Company has been noticed or reported during the year.
11. In our opinion the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Companies Act 2013.
12. In our opinion the Company is not a Nidhi Company.
Accordingly clause xii of Para 3 of Companies (Auditors Report) Order 2016 is notapplicable.
13. In our opinion all transactions with the related parties are in compliancewith Section 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the financial statements as required by the applicable accounting standards.
14 According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review. Accordingly clause xiv of Para 3 ofCompanies (Auditors Report) Order 2016 is not applicable.
15. ln our opinion and according to the information and explanations given to usthe Company has not entered into any non - cash transactions with directors or personsconnected with the Directors. Accordingly clause xv of Para 3 of Companies (AuditorsReport) Order 2016 is not applicable.
16. In our opinion and according to the information and explanations given to usthe Company is required to be registered under Section 45-lA of the Reserve Bank of IndiaAct 1934. Accordingly registration has been obtained .
ANNEXURE B TO INDEPENDENT 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 M/s.Dharani Finance Limited ("the Company") as of 31 March 2016 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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. 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 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 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.
| ||For K. RAMKRISH & CO. |
| ||Chartered Accountants |
| ||Registration # 003017S) |
| ||(S. Baskar Shrinivas) |
|Chennai ||Chartered Accountant |
|26.05.2016 ||Membership # 209004 |