MUKESH BABU FINANCIAL SERVICES LIMITED
Report on the Financial Statements
We have audited the acompanying financial statements of MUKESH BABU FINANCIAL SERVICESLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2017and the Statement of Profit and Loss the Cash Flow Statement for the year then ended anda 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 Section 134(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 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 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 specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
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 control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing an opinion on the effectiveness ofthe entity's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made bymanagement as well as evaluating 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 financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(i) in case of the Balance Sheet of the state of affairs of the Company as at March31 2017.
(ii) in case of statement of Profit and Loss of the Profit of the Company for theyear ended on that date.
(iii) in case of cash flow statement of cash flow of the Company for the year ended onthat date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' 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 in the paragraph3 and 4 of the order.
2. As required by Section143 (3) of the Act we report that:
(a) we have sought and obtained all the information and explanation 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 appears from our examination of those books;
(c) the Balance Sheet and 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 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 the dateof balance sheet and taken on record by the board of directors we report that none ofthe directors is disqualified as on the said date 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 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. Wehave been informed by the Company that the pending litigations against the Company wouldnot impact its financial position.
ii. In our view the Company has made provision as required under the applicable lawor accounting standards for material foreseeable losses if any on long-term contractsincluding 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 its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 and these are in accordance with the books of accountmaintained by the Company.
ANNEXURE "A:" REFERRED TO IN REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS OF OUR REPORT OF EVEN DATE IN CASE OF MUKESH BABU FINANCIAL SERVICES LIMITED
(i) (a) The Company is maintaining proper records showing full particulars ofincluding quantitative details and situation of fixed assets.
(b) The management at reasonable intervals has verified the fixed assets. We have beeninformed that no material discrepancies on such verification have been noticed.
(c) As per records presented before us the title deeds of immovable properties areheld in name of the As Company.
(ii) As per the records maintained the management has conducted physical verificationof inventory at reasonable intervals. We have been informed that no materialdiscrepancies on such verification have been noticed.
(iii) The Company has granted unsecured loan to a company (subsidiary) covered in theregister maintained under section 189 of the Companies Act 2013.
(a) As explained to us the terms and conditions of the grant of such loans are notprejudicial to the Company's interest;
(b) The schedule of repayment of principal and payment of interest has not beenstipulated;
(c) Since there is no schedule prescribed determinging the amount overdue for morethan ninety days and whether reasonable steps have been taken by the company for recoveryof the principal and interest is not possible; although we find that the subsidiary hasbeen repaying the amount periodically.
(iv) As per records maintained and explanation given to us in respect of loansinvestments guarantees and security given / made by the Company provisions of section185 and 186 of the Companies Act 2013 have been complied with.
(v) The Company has not accepted any deposits from public within the meaning of theprovisions of section 73 or any other provisions of the Companies Act 2013 and the rulesmade there under. We have been informed by the management that there has been no orderpassed by the Company law Board or National Company Law Tribunal or Reserve Bank of Indiaor any Court or any other Tribunal on the Company with respect to compliance of theprovisions of section 73 or any other provisions of the Companies Act 2013.
(vi) We have been informed by the management that the Central Government has notprescribed the method of maintenance of cost records under section 148 (1) of theCompanies Act 2013 to the industry to which the Company pertains.
(vii) (a) We have been informed by the management that the Company is generallyregular in depositing all undisputed statutory dues with the appropriate authorities andthere have been no material arrears of outstanding dues as at the last day of thisfinancial year for more than six months from the date they became payable .
(b) In our opinion and according to the information and explanation given to us thereare no dues of Income tax Sales tax Wealth Tax and Service tax Custom Duty ExciseDuty or Cess or Value Added Tax as applicable to it which have not been deposited onaccount of any dispute.
(viii) As informed to us by the management the Company has not defaulted in repaymentof any dues to financial institution or banks; whereas there are no debenture holders.
(ix) We have been informed by the management that no money was raised by way of InitialPublic offer or Further Public offer( including Debt instrument) and in case of termLoans the amount was applied for the purpose for which they are taken. (x) As informed bythe management there has not been noticed or reported any fraud on or by the Companyduring the year.
(xi) We have been informed by the management that managerial remuneration has been paidor provided in (xi) accordance with the requisite approval mandated by the provisions ofsection 197 read with Schedule V to the (xi) Companies Act 2013.
(xii) Since the Company is not a Nidhi Company the provisions of this clause are notapplicable to the Company (xiii) In our view and as per the explanation given to us bythe management transactions with the related parties are in compliance with section 177and 188 of the Companies Act 2013 wherever applicable and details have been disclosed inthe Financial statements as required by the applicable accounting standard.
(xiv) we have been informed by the management that Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review.
(xv) As per the explanation given to us by the management and as per recordsmaintained the Company has not entered into any non-cash transactions with directors orany persons connected with him as prescribed by section 192 of the Companies Act 2013.
(xvi) In our view the Company has carried out any activities in nature of activitiescarried out by non banking financial companies and thus is required to get registeredunder section 45-IA of the Reserve Bank of India Act 1934 and has obtained the requiredregistration.
ANNEXURE "B:" REFERRED TO IN REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS OF OUR REPORT OF EVEN DATE IN CASE OF MUKESH BABU FINANCIAL SERVICES LIMITED
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 MukeshBabu FInancial Services Limited ("the Company") as of 31 March 2017 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 (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 company's policies the safeguarding ofits 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 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 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 auditor's judgment 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 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 ofmanagement 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 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 2017 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
FOR SHAH SHAH & SHAH
M. No.: 049361
Place : Mumbai
Date : 30/05/2017