TO THE MEMBERS OF
ARIHANT FOUNDATIONS & HOUSING LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of ArihantFoundations and Housing Limited ("the Company") which comprise the BalanceSheet as at March 31 2018 and the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year then ended and a summary of significant accounting policies and otherexplanatory information.
Management's Responsibility for the Standalone 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 including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (IndAS) prescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing anddetecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent;and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial 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 standalone financial statementsbased on our audit. In conducting our audit we have taken into account the provisions ofthe Act the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules made thereunderand the Order issued under section 143 (11) of the Act.
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143 (10) of the Act. Those Standards requirethatwe comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement. An audit involves performing procedures to obtain audit evidenceabout the amounts and the disclosures in the standalone financial statements.Theprocedures selected depend on the auditor' s judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error. In making those risk assessments the auditor considers internal financialcontrol relevant to the Company's preparation of the standalone financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances .An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 312018 and its profit total comprehensive income the changes in equity andits cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by section 143 (3) of the Act based on our audit 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 the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account.
d. in our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under section 133 of the Act.
e. On the basis of written representations received from the directors as on March312018 taken on record by the Board of Directors none of the directors isdisqualifiedas on March 312018 from being appointed as a directorin terms 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 A ".Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
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 as amended inour opinion and to the best of our information and according to the explanations given tous:
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.
2. 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 Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
For S. RAMACHANDRA RAO & ASSOCIATES
F irm's Registration No.007735S
CA. RAMACHANDRA RAO SURANENI
Membership No: 206003.
Place : Chennai
Date : 30-05-2018
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 (f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Arihant Foundations and HousingLimited of even date)
Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the interna l financial controls over financial reporting of ARIHANTFOUNDATIONS AND HOUSING LIMITED (the Company") as of March312018 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". 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 deemed to beprescribed under section 143 (10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 judgement 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 isa process designed toprovide 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
i. Pertainto the maintenance of records thatin reasonable detailaccurately and fairlyreflect the transactions and dispositions of the assets of the company;
ii. Provide reasonable assurance that transactions are recorded as necessary topermitpreparation of financial statements in accordance with generally accepted accountingprinciplesand that receiptsand expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
iii. Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
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 opinionto the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 312018 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia".
| ||For S. RAMACHANDRA RAO & ASSOCIATES |
| ||Chartered Accountants |
| ||Firm's Registration No.007735S |
| ||CA.RAMACHANDRA RAO SURANENI |
| ||Proprietor |
|Place : Chennai ||Membership No: 206003. |
|Date : 30-05-2018 || |
"ANNEXURE B' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under Report on Other Legal & RegulatoryRequirement' of our report to the Members ofArihant Foundations and Housing Limited ofeven date)
1. In respect of the Company's fixed assets :
a. The company has maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
b. The Company has a program of verification to cover all the items of fixed assets ina phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.
c. According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date.
2. As explained to us the stock of construction materials has been physically verifiedby the management at reasonable intervals; and no material discrepancies were noticed onsuch verification and if so and the same have been properly dealt with in the books ofaccount.
3. According to the information and explanations given to us the Company has grantedunsecured loans to four body corporates covered in the register maintained under section189 of the Companies Act 2013 in respect of which:
a. In our opinion the rate of interest and other terms and conditions on which theloans had been granted to the body corporates listed in the register maintained underSection 189 of the Act were not prima facie prejudicial to the interest of the company.
b. During the year in respect of the aforesaid loans in some of the loans there hasbeen no recovery towards principal. In absence of any terms we are unable to comment onthe regularity of recovery of principal amount.
c. Since there was no repayment schedules we are unable to comment whether the amountwas overdue for more than ninety days.
4.In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and I86 of the Ac in respect ofgrant of loans making investments and providing guarantees and securities as applicable.
5. The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 312018 and therefore the provisions of the clause 3 (v)of the Order are not applicable to the Company.
6. The maintenance of cost records has not been specified by the Central Governmentunder section 148 (1) of the Companies Act 2013 for the business activities carried outby the Company. Thus reporting under clause 3(vi) of the order is not applicable to theCompany.
7. According to the information and explanations given to us in respect of statutorydues:
(a) .The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Service TaxGoods and Service Tax Value Added Tax duty of Customs duty Excise Duty Cess and anyother material statutory dues applicable to it with the appropriate authorities except oncertain occasions irregularities were noticed.
(b) .There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Sales Tax Service Tax Value Added Tax Goods and ServiceTax Customs Duty Excise Duty Cess and other material statutory dues in arrears as atMarch 312018for a period of more than six months from the date they became payable.
(c).Details of dues of Income Tax Service tax which have not been deposited as atMarch 312018 on account of dispute are given below:
|Name of the statute ||Nature of the dues ||Forum where dispute is pending ||Period to which the amount relates ||Amount (Rs.) |
|The Income Tax Act1961 ||Income Tax ||Appellate Authority upto Commissioner's level ||A.Y. 1999- 2000 ||7638692 |
|The Income Tax Act1961 ||Income Tax ||Appellate Authority upto Commissioner's level ||A.Y. 2011-12 ||7183310 |
|The Income Tax Act1961 ||Income Tax ||Appellate Authority upto Commissioner's level ||A.Y. 2013-14 ||1519250 |
|The Income Tax Act1961 ||Income Tax ||High Court of Madras ||A.Y. 2004-05 ||1371638 |
|The Income Tax Act1961 ||Income Tax ||High Court of Madras ||A.Y. 2005-06 ||5323956 |
|The Income Tax Act1961 ||Income Tax ||Income tax Appellate Tribunal ||A.Y. 2005-06 ||9558275 |
|The Income Tax Act1961 ||Income Tax ||Income tax Appellate Tribunal ||A.Y. 2007-08 ||55761612 |
|Finance Act 1994 ||Service Tax ||CESTAT Chennai ||June-2 005 to March 2007. ||2316081 |
8. The Company has not defaulted in repayment of loans to banks financialinstitutions government and to debenture holders.
9. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause 3 (ix)of the Order isnot applicable to the Company.
10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no material fraud on the Company by its officersor employees has been noticed or reported during the year.
12. The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable to the Company.
13. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicableforall transactions with the related parties and the details of related partytransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.
14. During the year the Company ha s not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder clause3(xiv) of the Order is not applicable to the Company.
15. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company.
16. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
For S. RAMACHANDRA RAO & ASSOCIATES
Firm's Registration No.007735S
CA.RAMACHANDRA RAO SURANENI
Membership No: 206003.
Place : Chennai
Date : 30-05-2018