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Sakthi Finance Ltd.

BSE: 511066 Sector: Financials
NSE: SAKTHIFIN ISIN Code: INE302E01014
BSE LIVE 15:40 | 22 Sep 37.55 -0.95
(-2.47%)
OPEN

39.90

HIGH

39.90

LOW

37.15

NSE 00:00 | 22 May Stock Is Not Traded.
OPEN 39.90
PREVIOUS CLOSE 38.50
VOLUME 12737
52-Week high 51.00
52-Week low 27.75
P/E 10.88
Mkt Cap.(Rs cr) 188
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 39.90
CLOSE 38.50
VOLUME 12737
52-Week high 51.00
52-Week low 27.75
P/E 10.88
Mkt Cap.(Rs cr) 188
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sakthi Finance Ltd. (SAKTHIFIN) - Auditors Report

Company auditors report

To

The Members of Sakthi Finance Limited

Report on the Financial Statements

We have audited the accompanying financial statements of SAKTHI FINANCE LIMITED("the Company") which comprise the Balance Sheet as at 31st March 2016 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the 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 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 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 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 are free from material misstatement whether due to fraud orerror.

Auditors' Responsibility

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 thereunder.

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 theauditors' 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 controls 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 the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof 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 financial statements.

Opinion

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 31stMarch 2016 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in exercise of the powers conferred bysub-section (11) of Section 143 of the Companies Act 2013 we give in the"Annexure-A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

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 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 the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms ofSection 164(2) of the Act.

f. With respect to the adequacy of internal financial controls over financial reportingof the company and the operating effectiveness of such controls refer to our separatereport in"Annexure B"; and g. With respect to other matters to be included inthe Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanation given to us; i. The Company has disclosed the impact of pending litigations onits financial position in its financial statements as referred to in Note No.27 to thefinancial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and iii. There are no amounts which wererequired to be transferred to the Investor Education and Protection Fund by the Company.

For P.N. Raghavendra Rao & Co
Chartered Accountants
Firm Regn. No.:003328S
Pon Arul Paraneedharan
Coimbatore Partner
28th May 2016 Membership No.212860

Annexure A referred to in the Independent Auditors' report of even date Re : SakthiFinance Limited (the Company)

i. a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b. These fixed assets have been physically verified by the management at reasonableintervals. No material discrepancies were noticed on such verification.

c. According to the information and explanations given to us the title deeds ofimmovable properties as disclosed in Note No.10 to the financial statements are held inthe name of the company.

ii. The company does not hold any inventory. Therefore the provisions of Clause 3(ii)of the Order are not applicable to the company.

iii. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under Section 189 of theCompanies Act 2013. Therefore the provisions of Clause 3(iii)(a) to (c) of the Order arenot applicable to the company.

iv. In our opinion and according to the information and the explanations given to usthe company has not given/provided any loans guarantee and securities to partiesmentioned in section 185 of the Companies Act 2013. The provisions of section 186 is notapplicable to the Company as it is a Non-Banking Financial Company.

v. The company has accepted deposits from the public. The directives issued by theReserve Bank of India (RBI) and provisions of Section 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the rules framed thereunder wherever applicablehave been complied with except the directives issued by RBI under Residuary Non-BankingFinance Companies (Reserve Bank) Directions 1987 in respect of maintenance of liquidassets in investment in unencumbered approved securities as enumerated below:

There is a shortfall of Rs.30.39 lakhs in maintaining the minimum level of liquidassets for a period of 43 days during June 2015 quarter.

No order has been passed by the Company Law Board or National Company Law Tribunal orReserve Bank of India or any Court or any other Tribunal.

vi. The Central Government has not specified the maintenance of Cost Records undersub-section (1) of Section 148 of the Companies Act 2013 for the activities of thecompany.

vii. a. The company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax service tax sales tax cess andother applicable material statutory dues with the appropriate authorities. There are nosuch statutory dues as at the last day of the financial year remaining in arrears for aperiod of more than six months from the date they became payable.

b. According to the information and explanation given to us the disputed statutorydues (in case of income tax service tax and cess) aggregating to Rs.1408.60 Lakhs thathave not been deposited on account of matters pending before appropriate authority are asunder.

Name of the Statute Nature of the Dues Amount (Rs. in Lakhs) Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income Tax 66.57 AY 2009-10 Commissioner of Income Tax (Appeals) Coimbatore
Income Tax Act 1961 Income Tax 13.74 AY 2012-13
Finance Act 1994 Service Tax 1328.29 Oct 2009 to Sept 2014 High Court of Madras

viii. According to the information and explanations given to us the Company has notdefaulted in repayment of dues to financial institutions banks Government and debentureholders during the year.

ix. In our opinion and according to the information and the explanations given to usthe Company has utilized the money raised by way of public offer and term loans during theyear for the purpose for which those 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 year.

xi. According to the information and explanations given to us and based on theexamination of the records the Company has paid/provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith 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. Accordingly para 3(xii) of the Order is not applicable.

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. The details of suchrelated party transactions have been disclosed in the notes to the financial statements asrequired under the Accounting Standard (AS) 18.

xiv. During the year under review the Company has made private placement of preferenceshares and the requirements of Section 42 of the Act have been complied with. The amountsraised have been used for the purpose for which they were raised.

xv. According to the information and explanations given to us and based on ourexamination of the records the Company has not entered into non-cash transactions withthe Directors or persons connected with them. Accordingly para 3(xv) of the Order is notapplicable.

xvi. According to the information and explanations given to us we report that thecompany has registered as required under Section 45-IA of the Reserve Bank of India Act1934.

For P.N. Raghavendra Rao & Co
Chartered Accountants
Firm Regn. No.:003328S
Pon Arul Paraneedharan
Coimbatore Partner
28th May 2016 Membership No.212860

Annexure-B referred to in the Independent Auditors' report of even date Re : SakthiFinance Limited (the Company)

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of section143 of the Act

We have audited the internal financial controls over financial reporting of SakthiFinance Limited ("the Company") as of 31st March 2016 in conjunction with ouraudit of the financial 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 controls over financial reporting criteriaestablished by the Company considering the essential components of the internal controlsstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued 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.

Auditor's responsibility

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 Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the"Guidance Note") and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofInternal Financial Controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofinternal 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 controls based on the assessed risks.

The procedures selected depend on the auditor's judgment including the assessment ofthe risk of material misstatements of the financial statements whether due to fraud orerror.

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 control systemover financial reporting.

Meaning of Internal Financial Control 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 controls 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 andexpenditure 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 limitation 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 internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financial reporting may become inadequate because of changes in condition or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2016 based on theinternal controls over financial reporting criteria established by the Company consideringthe essential components of internal controls stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by ICAI.

For P.N. Raghavendra Rao & Co
Chartered Accountants
Firm Regn. No.:003328S
Pon Arul Paraneedharan
Coimbatore Partner
28th May 2016 Membership No.212860