The Members of
M/S. SUNGOLD CAPITAL LIMITED.
Report on the Financial Statements
We have audited the accompanying financial statements of M/S. SUNGOLD CAPITALLIMITED ("the Company") which comprise the Balance Sheet as at March 312017 the Statement of Profit and Loss and Cash Flow Statement for the year 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 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting 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 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 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. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Board of Directors as well as evaluating the overallpresentation 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 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 31stMarch 2017 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 in paragraphs 3and 4 of the order to the extent applicable.
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 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 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in termsof Section 164 (2) (a) of the Act
f. With respect to adequacy of the 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 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 opinion and to the best of our information andaccording 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; and
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the company.
For Motilal & Associates
FRN: - 106584W
CA Mokshesh Shah Partner
Membership No: - 172906
Date: May 28 2017
Annexure- A referred to in paragraph titled as "Report on other Legal andRegulatory Requirements" of Auditor's report to the members SUNGOLD CAPITAL LIMITEDfor the year ended 31st March 2017.
On the basis of the records produced to us for our verification / perusal such checksas we considered appropriate and in terms of information and explanation given to us onour enquiries we state that:
(i) a) According to the information and explanations given to us and records producedbefore us the Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) According to the information and explanations given to us and records producedbefore us the fixed assets have been physically verified by the management at reasonableintervals and no material discrepancies were noticed on such physical verification.
(ii) Having regards to the nature of the company's business paragraph 4(ii) of theOrder relating to inventory is not applicable.
(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013. Accordingly clause 3 (iii) of the Order is notapplicable to the Company.
(iv) The Company has not granted any loans has not made investments and has notprovided any guarantees and security to directors or to any other parties. Accordinglyclause 3 (iv) of the Order is not applicable to the Company.
(v) The Company has not accepted any deposits from the public. Accordingly clause 3(v) of the Order is not applicable to the Company.
(vi) The Central Government has not prescribed maintenance of cost records for thecompany under sub section (1) of section 148 of the Companies Act 2013. Accordinglyclause 3 (vi) of the Order is not applicable to the Company.
(vii) According to the records of the Company the Company is generally regular indepositing undisputed statutory dues including Provident Fund Employees' State InsuranceIncome Tax Sales Tax Service Tax Excise Duty Customs Duty Value Added Tax Cess andother statutory dues applicable to it with the appropriate authorities except undisputedamounts were outstanding as on the financial year concerned for a period of more than sixmonths from the date they became payable.
(viii) According to the records of the Company examined by us and the information andexplanation given to us the Company has not taken any loan or borrowing from banksgovernment financial institutions and has not issued debentures during the year.Accordingly clause 3 (viii) of the Order is not applicable to the Company.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and through term loans during the year.Accordingly clause 3 (ix) of the Order is not applicable to the Company.
(x) Based upon the audit procedures performed and information and explanations given bythe management we report that no fraud by the Company or no fraud on the Company by itsofficers or employees has been noticed or reported during the year.
(xi) The company has paid for managerial remuneration during the year in accordancewith the requisite approvals mandate by the provisions of Section 197 read with Schedule Vto the Act.
(xii) In our opinion and according to the information and explanations given to us thenature of activities of the Company does not attract any special statute applicable toNidhi Company. Accordingly clause 3 (xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanation given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sec 177 and 188 of Companies Act 2013 where applicable and details ofsuch transactions have been disclosed in the financial statements as required by theapplicable accounting standards.
(xiv) In our opinion and according to the information and explanations given to us andbased on our examination of the records of the Company the company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly clause 3 (xiv) of the Order is not applicable tothe Company.
(xv) In our opinion and according to the information and explanations given to us andbased on our examination of the records of the Company the company has entered into anynon-cash transactions with directors or persons connected with him. Accordingly clause 3(xv) of the Order is not applicable to the Company.
(xvi) According to the information and explanations given to us and documents producedbefore us the company is registered under section 45 IA of the Reserve Bank of India Act1934.
For Motilal & Associates FRN: - 106584W
CA Mokshesh Shah
Membership No: - 172906
Date: May 28 2017
Annexure- B referred to in paragraph titled as "Report on the Internal FinancialControls under clause (i) of Sub- section 3 of Section 143 of the Companies Act2013" ("the Act")
We have audited the internal financial controls over financial reporting of SUNGOLDCAPITAL LIMITED ("the Company") as of 31st March 2017 in conjunctionwith our audit 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 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 31st March 2017based on the 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 Motilal & Associates
FRN: - 106584W
CA Mokshesh Shah
Membership No: - 172906
Date: May 28 2017
ACCOMPANYING NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED MARCH 31 2017
1 Corporate Information:
Sungold Capital Limited ("the Company") incorporated in 1993 is a nondeposit taking Non Banking Financial Company ("NBFC") as defined under section45-IA of the Reserve Bank of India ("RBI") Act 1934 and is engaged in thebusiness of financing and is listed on both the Bombay Stock Exchange (BSE) and AhmedabadStock Exchange (ASE).
2 Significant Accounting Policies:
a. Basis of Preparation of Financial Statement :
The Company follows mercantile system of accounting and recognizes income andexpenditure on an accrual basis. Financial Statements are prepared under historical costconvention in accordance with the Generally Accepted Accounting Principles in India(GAAP) and comply in all material aspects with mandatory accounting standards asprescribed under section 133 of the act read with rule 7 of the companies (Accounts)Rules 2014. The significant accounting policies followed by the Company are set outbelow.
Current assets do not include elements which are not expected to be realised within oneyear and current liabilities do not include items which are due after one year.
b. Use of Estimates:
The preparation of financial statements require the management of the Company to makeestimates and assumptions that affect the reported balances of assets and liabilities anddisclosures relating to the contingent liabilities as at the date of the financialstatements and reported amounts of income and expenses for the reporting period. Themanagement believes that the estimates used in preparation of the financial statements areprudent and reasonable. Future results could differ from these estimates. Any revision toaccounting estimates is recognised prospectively in the current and future periods.Example of such estimates includes provision for non performing loans provisionfor employee benefit plans and provision for income taxes. Differences in actual andestimated results are recognized in the period in which the result is materialized.
c. Revenue Recognition:
i) Income from Entertainment division distribution and exhibition of drama and film isrecognized on accrual basis.
ii) Interest is recognized on the time of proportion basis taking in to accounts theamount outstanding and the date applicable. In case of Non Performing Assets (NPA)interest income is recognised upon realisation as per the RBI Guidelines. Interest accruedand not realised before the classification of the asset as an NPA is reversed and creditedto the interest suspense account.
iii) Income from dividend on shares of corporate bodies and units of mutual funds isaccounted on accrual basis when the Company's right to receive dividend is established.
iv) In respect of other heads of Income the company follows the practice of accountingon accrual basis.
d. Fixed Assets & Depreciation:
Fixed assets are stated at cost less accumulated depreciation and impairment if any.The cost of fixed assets comprises purchase price and any attributable cost of bringingthe asset to its working condition for its intended use. Subsequent expenditure incurredon assets put to use is capitalized only when it increases the future benefit /functioning capability from / of such assets.
Intangible assets are stated at cost of acquisition less accumulatedamortization/depletion. The costs and expenses attributable to the intangible assets arecapitalized.
The useful life estimates prescribed in Part C of Schedule II to the Companies Act2013 are generally adhered to except in respect of asset classes where based ontechnical evaluation a different estimate of useful life is considered suitable. Itemscosting less than Rs 5000/- are fully depreciated in the year of purchase. The companyhas estimated Nil residual value at the end of the useful life for all block of assets.
The Management estimates the useful lives for the other fixed assets as follows:
|Sr No ||Fixed Assets ||Estimate useful life |
|1 ||Computer ||3 |
|2 ||Furniture ||5 |
|3 ||Mobile ||3 |
|4 ||Office Equipments ||5 |
|5 ||Projector ||5 |
Pursuant to the enactment of Companies Act 2013 the company has applied the estimateduseful lives as specified in Schedule II except in respect of certain assets as disclosedin Accounting Policy on Depreciation Amortization and Depletion. Accordingly theunamortized carrying value is being depreciated / amortized over the revised/remaininguseful lives.
All investments are held as long term Investments unless otherwise mentioned and arestated at cost. Provision for diminution in the value of long term investments is madeonly if such a decline is other than temporary.
g. Provision for Current Tax and deferred Tax:
Tax expense comprises both current and deferred tax at the applicableenacted/substantively enacted rates. Current tax represents the amount of income taxpayable in respect of the taxable income for the reporting period.
Deferred tax represents the effect of timing differences between taxable income andaccounting income for the reporting period that originate in one period and are capable ofreversal in one or more subsequent periods. Deferred tax assets are recognized only to theextent there is reasonable certainty of realization in future. Such assets are reviewed asat each Balance Sheet date to reassess realization. Deferred Tax Asset and Liability arenetted off and disclosed in the balance sheet under the Head "Deferred Tax Asset /Liability"
Minimum Alternate Tax (MAT) paid in accordance with the tax laws which gives futureeconomic benefits in the form of adjustment to future income tax liability is consideredas an asset if there is convincing evidence that the Company will pay normal income tax.Accordingly MAT is recognised as an asset in the Balance Sheet when it is highly probablethat future economic benefit associated with it will flow to the Company.
h. Provisions & Contingent Liabilities:
The Company recognized provision when the company has a legal and constructive presentobligation as a result of a past event for which it is probable that outflow of resourceswill be required and a reliable estimate can be made of the amount of the obligation. Incases where the available information indicates that the loss on the contingency isreasonably possible but the amount of loss cannot be reasonably estimated a disclosure ismade in the financial statements. Provisions are reviewed at each balance sheet date andadjusted to reflect the current management estimates. If it is no longer probable that theoutflow of resources would be required to settle the obligation the provision isreversed.
A disclosure of contingent liability is made when there is a possible obligation or apresent obligation that may but probably will not require an outflow of resources.
When there is a possible obligation or a present obligation in respect of whichlikelihood of outflow of resource is remote no provision or disclosure is made.
Contingent assets are not recognized in the financial statements.
Contingent liabilities are disclosed when there is a possible obligation that mayresult in an outflow of resources. Contingent assets are neither recognized nor disclosed.Contingent Liabilities not provided for: NIL .Contingent Assets are neither recognized nordisclosed in the financial statements.
i. Prior Period Items:
Material amount of Income and Expenditure pertaining to prior years are disclosedseparately.
j. Employee Benefits:
The Company has been advised that the payment of bonus act 1965 and the payment ofgratuity act 1972 are not applicable.
k. Earnings per Share
The Company reports basic and diluted earnings per equity share in accordance with AS20 Earnings Per Share issued by the Institute of Chartered Accountants of India. Basicearnings per equity share have been computed by dividing net profit / loss attributable tothe equity share holders for the year by the weighted average number of equity sharesoutstanding during the year. Diluted earnings per equity share have been computed bydividing the net profit attributable to the equity share holders for the year by theweighted average number of equity shares and dilutive potential equity shares outstandingduring the year except where the results are anti dilutive
l. Business segment
The Company's reportable segments consist of "Financing Activity" and"Others". The "Financing Activity" segment consists of assetfinancing term loans (corporate and retail) channel financing and bill discounting."Others" segment primarily includes advisory services wealth managementdistribution of financial products and leasing. Revenue and expense directly attributableto segments are reported under each reportable segment. Expenses not directly identifiableto each of the segments have been allocated to each segment on the basis of associatedrevenues of each segment. All other expenses which are not attributable or allocable tosegments have been disclosed as unallocable expenses. Assets and liabilities that aredirectly attributable to segments are disclosed under each reportable segment. All otherassets and liabilities are disclosed as unallocable.
m. Cash Flow Statement
Cash flows are reported using the indirect method whereby profit / (loss) beforeextraordinary items and tax is adjusted for the effects of transactions of noncashnature and any deferrals or accruals of past or future cash receipts or payments. The cashflows from operating investing and financing activities of the Company are segregatedbased on the available information.