TO THE SHAREHOLDERS OF ADHARSHILA CAPITAL SERVICES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of ADHARSHILA CAPITAL SERVICESLIMITED ("the Company") which comprise the Balance Sheet as at 31stMarch 2018 the Profit and Loss Statement 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 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; 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.
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 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 Directors as well as evaluating the overall presentationof the financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.
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:
a. In the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2018;
b. In the case of the Profit and Loss Statement of the loss for the year ended on thatdate; and
c. In the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.
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 in terms of section 143(11) of the Companies Act 2013we give in the "Annexure A" statement on the matters specified inparagraphs 3 and 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 purposes 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 Profit and Loss Statement and Cash Flow Statement dealt with bythis 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 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 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. 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 were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
3. Further as required by 'Non Banking Financial Companies Auditor's Report (ReserveBank) Directions1988' we further state that we have submitted a separate report to theBoard of Directors of the Company on the matters specified in said directions as under:-
a) The company applied for registration as provided in section 45IA of the Reserve Bankof India Act 1934 and has obtained certificate of registration from the Reserve Bank ofIndia.
b) The Company is entitled to continue to hold the Certificate of Registration in termsof its asset/income pattern as on 31st March 2018.
c) The Board of Directors of the company has passed a resolution for non - acceptanceof any public deposits.
d) The company has not accepted any public deposit during the year under reference.
e) The company has complied with the prudential norms relating to income recognitionaccounting standards assets classification and provisioning of bad and doubtful debts asapplicable to it in terms of Non-Banking Financial (Non-Deposit Accepting or Holding)Companies Prudential Norms (Reserve Bank) Directions 2007.
For RAJENDAR K. KUMAR & ASSOCIATES
Place : Delhi
Date : 14th May 2018
ANNEXURE 'A' TO THE AUDITORS' REPORT
Referred to in our report of even date on the accounts of ADHARSHILA CAPITAL SERVICESLIMITED for the year ended on 31st March 2018.
As required by the companies (Auditors Report) Order 2016 issued by the Government ofIndia in terms of section 143(11) of the Company Act 2013 and on the basis of such checksas we considered appropriate and as per information and explanations given to us wereport that:-
1. (a) The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) The fixed assets of the company have been physically verified during the year bythe management at reasonable intervals and no material discrepancies between the bookrecords and the physical inventory have been noticed on such verification.
(c) The company does not hold any immovable property.
2. The inventory of the company comprises equity shares which are in dematerializedform and which have been verified by the management with reference to holding statementfrom depository participant. In our opinion the procedure of verification of inventoryfollowed by the management is satisfactory. Further the company is maintaining properrecords of its inventory and no discrepancies were noticed on verification.
3. (a) According to information made available to us the company has granted unsecuredloans to companies covered in the register maintained under section 189 of the Act and inour opinion the terms and conditions of such loans are not prejudicial to the company'sinterest.
(b) As per the information and explanation given to us the said loans are repayable ondemand.
(c) As per the information and explanation given to us an amount of Rs. 292500/-towards interest due as on 31.03.2017 on a loan of Rs. 25.00 lacs could not be recoveredtill 31.03.2018 rendering such loan as Non Performing Asset. Consequentially the companyhas reversed such unrealized interest and has also not provided interest of Rs. 325000/-due for the year under consideration. The company is hopeful of recovering these duesshortly.
4. On the basis of information and explanation given to us and on our scrutiny ofcompany's records we report that the company has not entered into any transaction coveredunder the provisions of section 185 of the Companies Act 2013. Further the provisions ofsection 186 of the Companies Act 2013 have been complied with in respect of loansinvestments guarantees and security made by the company.
5. On the basis of information and explanation given to us and on our scrutiny ofcompany's records in our opinion the company has not accepted any public deposits.
6. To the best of our knowledge and belief and according to information given to usCentral Government has not prescribed the maintenance of cost records under sub-section(1) of section 148 of the Companies Act 2013 for any of the activities of the company.
7. (a) According to the information and explanation given to us the company isgenerally regular in depositing with appropriate authorities the undisputed statutory duesincluding provident fund employees' state insurance income-tax wealth-tax service taxduty of customs duty of excise value added tax cess and any other statutory duesapplicable to it. Further there were no arrears of undisputed statutory dues outstandingas at last day of the financial year concerned for a period of more than six month fromthe date they became payable.
(b) According to the information and explanations given to us there are no such duesas stated above which have not been deposited on account of any dispute.
8. Based on our examination and according to the information and explanations given tous the company has not taken any loans from any financial institution bank orGovernment. The company has not issued any debentures.
9. According to the information and explanations given to us the company has notraised any moneys by way of initial public offer or further public offer (including debtinstruments) or term loans during the year.
10. Based on audit procedures performed and according to the information andexplanations given to us we report that no fraud on or by the company has been noticed orreported during the year.
11. To the best of our knowledge and belief and according to information given to usthe company has not given any managerial remuneration during the year under review.
12. The company is not a Nidhi Company.
13. According to the information and explanations given to us all the transactionswith the related parties are in compliance with the provisions of sections 177 and 188 ofCompanies Act 2013 and the details have been properly disclosed in the financialstatements as required by the applicable accounting standards.
14. According to the information made available to us the company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review.
15. According to the information and explanations given to us the company has notentered into any non-cash transactions with directors or persons connected with them.
16. The company is required to be registered under section 45-IA of the Reserve Bank ofIndia Act 1934 and the registration has been duly obtained.
For RAJENDAR K. KUMAR & ASSOCIATES
Place : Delhi
Date : 14th May 2018
ANNEXURE 'B' TO THE 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 ADHARSHILACAPITAL SERVICES LIMITED ("the Company") as of 31 March 2018 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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 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 2018 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 RAJENDAR K. KUMAR & ASSOCIATES
FRNO. 010142C R.K. KUMAR
Place : Delhi
Date : 14th May 2018