To the Members of GILADA FINANCE & INVESTMENTS LIMITED Report on the FinancialStatements
We have audited the accompanying financial statements of "GILADA FINANCE &INVESTMENTS LIMITED" which comprise the Balance Sheet as at March 31 2017 andthe Statement of Profit and Loss and 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 stated in Section134(5) of the Companies Act 2013 with respect to the preparation and presentation 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; andthe design implementation and maintenance of adequate internal financial control that wereoperating 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 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 accordancewith the Standards on Auditing issued by the Institute of Chartered Accountants of Indiaas specified under Section 143(10) of the Act Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the 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 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 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. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof thefinancial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial 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 state of affairs of the Company as at March31 2017 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 statement on the matters specified in paragraphs 3and 4 of the Order.
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 purpose 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 financial statements comply with the AccountingStandards specified 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 March 312017 and 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 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 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 has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 18 (B) (6) (A) to the financialstatements;
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were no material foreseeable losses provision is required.
(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 Note No.18(B) (16) to thefinancial statements as to the holding as well as dealing of specified Bank Notes (SBN's)during the period from 8th November 2016 to 30th December 2016. Based on auditprocedures and relying on management representations except for the segregation betweenSBN's and other denomination notes as more fully described in Note No.18(B)(16) tofinancial statements upon which we are unable to comment on in the absence of necessarydetails we report that the amounts disclosed in the said note is in accordance with thebooks of account maintained by the company and produced for us for verification.
For VISHNUKANTJAJU & ASSOCIATES CHARTERED ACCOUNTANTS FR No. 014328W
PROPRIETOR M. No. 044988
Place: Bangalore Date : 30th May 2017
GILADA FINANCE AND INVESTMENTS LIMITED
ANNEXURE -A TO THE AUDITOR'S REPORT
1. (a) The Company has maintained proper records showing full particulars includingquantitative details & situation of
the fixed assets except details like year of purchase cost of purchase etc are notreadily available.
(b) All the fixed assets have not been physically verified by the management during theyear under audit but there is a regular programme of verification which in our opinionis reasonable having regard to the size of the company & the nature of its fixedassets. 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 deed of immovable properties is heldin the name of the Company.
2. The nature of the Company's business / activities during the year does not involveinventories & accordingly clauses (II) & (III) of paragraph 3 of the Companies(Auditors Report) order 2016 are not applicable to the Company.
3. (a) In the ordinary course of business of financing the company has given loans totwo parties covered in the register
maintained under section 189 of the Companies Act 2013. The maximum amount involvedduring the year was not determined by the management since they are in the nature ofcurrent accounts and repayable on demand. The yearend balance of loan given to suchparties was Rs. 222.45 lakhs which is within the maximum limits prescribed under section185 & 186 of the Companies Act 2013 and under RBI Directions to Non Banking FinancialCompanies and not prejudicial to the Company's interest.
(b) There are no written terms & conditions on which loans granted to CompaniesFirms or other parties listed in the register maintained under section 189 of theCompanies Act 2013 However no irregularities of repayment of principal amount &interest amount by the parties were noticed.
(c) Since there are no written terms & conditions on which loans granted toCompanies firms /other parties listed in the register maintained under section 189 of theCompanies Act 2013 and since they are in the nature of current accounts repayable ondemand there are no overdue amounts of loans granted.
4. In our opinion & explanations given to us the Company has complied with theprovisions of Section 185 and 186 of the Companies Act with respect to loans andinvestment made.
5. In our opinion & according to the information & explanations given to usthe company is not required to comply with the directions issued by Reserve Bank of Indiaunder Non Banking Financial Companies (Reserve Bank) Directions 1998 with respect topublic deposits since no deposits have been accepted from the public. No order has beenpassed by the Company Law Board or National Company Law Tribunal or Reserve Bank of Indiaor any court or any other Tribunal.
6. The Central Government has not prescribed the maintenance of cost records undersection 148 (1) of the Companies Act 2013 for the nature of business of Company Sincethe Company is not into manufacturing activity.
7. (a) The company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including
provident fund employees state insurance income tax sales tax service tax customduty excise duty value added tax cess & other material statutory dues applicable toit. However we are informed that the provisions of the Employees Provident Fund &Employees State Insurance Scheme are not yet applicable to the Company.
According to the information & explanations given to us no undisputed amountspayable in respect of provident fund employees state Insurance income tax sales taxservice tax customs duty excise duty value added tax cess & other materialstatutory dues were in arrears as at 31-3-2017 for a period of more than 6 months fromthe date they became payable.
(b) According to the information & explanations given to us except income tax nodues of sale tax customs duty service tax excise duty value added tax & cess whichhave not been deposited on account of any dispute.
There is a disputed income tax liability of Rs. 471077/- for AY 06-07 which is underappeal with Commissioner of Income Tax (Appeals)-I Bangalore. The dispute is on accountof disallowability of deduction claimed under section 10(23G) and expenses disallowed u/s14A and u/s 37 of the I.T. Act.
8. In our opinion & according to the information & explanations given to usthe company had generally not defaulted in repayment of dues to a Financial InstitutionBank or debenture holders.
9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly Paragraph3 (IX) of the order is not applicable.
10. According to the information & explanations given to us no fraud by theCompany or on the company by its officers or employees has been noticed or reported duringthe course of our audit.
11. According to the information & explanation given to us and based on ourexamination of the records of the Company and in the opinion of the management theCompany is not required to obtain any requisite approval since; managerial remunerationpaid or provided is in accordance with the provisions of Sec.197 read with Schedule V ofthe Act.
12. 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.
13. 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 section 177 and 188 of the Act wherever applicable and details of suchtransactions has been disclosed in the financial statements as required by the applicableaccounting standards.
14. 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.
15. 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 him. Accordingly paragraph 3 (xv) ofthe order is not applicable.
16. According to the information and explanations given to us the Company has obtainedregistration under section 45-IA of the Reserve Bank of India Act 1934.
For VISHNUKANTJAJU & ASSOCIATES
M. No. 044988
PLACE : BANGALORE
DATE : 30th May2017
GILADA FINANCE AND INVESTMENTS LIMITED
ANNEXURE -B TO THE AUDITOR'S 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 GiladaFinance & Investments Ltd as of 31st March 2017 in conjunction with our audit of thefinancial statements of the Company for the year ended 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. 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 the 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 Reportingand the Standards on Auditing issued by ICAI and deemed to be prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued 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 were 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 auditor's judgment including the assessment of the risks ofmaterial misstatement of thefinancial 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 authorizations of theManagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on thefinancial 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 31st March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential component of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccounts of India.
|PLACE : BANGALORE ||For VISHNUKANTJAJU & ASSOCIATES |
|DATE : 30th May 2017 ||CHARTERED ACCOUNTANTS |
| ||FR No. 014328W |
| || |
| ||V B JAJU |
| ||PROPRIETOR |
| ||M.No. 044988 |