To The Members Arnold Holdings Limited
Report on the Financial Statements
We have audited the accompanying financial statements of ARNOLD HOLDINGS LIMITED(the Company') which comprise the Balance Sheet as at 31st March 2017 theStatement of Profit and Loss for the year then ended and a summary of significantaccounting 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 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 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 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 at31stMarch 2017 and its profit for the year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the financial statements:
a) Note 8 to the financial statements which describes the uncertainty related to theincome appeals filed by the company.
Our opinion is not modified in respect to these matters.
Report on Other Legal and Regulatory Requirement.
1. As required by 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 Companies Act 2013 we give in the Annexure A' a statement on the matterspecified in paragraph 3 and 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 explanation which to the best ofour 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 Companyso for as it appears from our examination of those books.
c. The Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith by this Report are in agreement with the books of account. d. In our opinion theaforesaid financial statements comply with the Accounting Standard specified under section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.
e. The contingent liability described in sub-paragraph (a) under the Emphasis of matterparagraph above in our opinion may not have an adverse effect on the functioning of theCompany.
f. On the basis of written representations received from the Director as on 31st march2017 taken on the record by the Board of Directors none of directors are disqualified ason 31st march 2017 from being appointed as a director in terms of section 164 (2) of theAct.
g. With respect to adequacy of internal financial controls over financial reporting ofCompany and the operating effectiveness of such controls refer to our separate report in"Annexure B".
h. With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to 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 contract including derivative contract 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.
For AMIT RAY & COMPANY Chartered Accountants FRN No: 000483C
Nag Bhushan Rao
Membership No. 073144
Date: 30th May 2017
The Annexure referred to in paragraph 1 of Our Report on "Other Legal andRegulatory Requirements".
The Annexure referred to in paragraph 1 of Our Report on "Other Legal andRegulatory Requirements". We report that:
i. a) The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
b) As explained to us fixed assets have been physically verified by the management atreasonable intervals; no material discrepancies were noticed on such verification.
c) The Company does not hold any immovable properties during the year.
ii. As explained to usinventories have been physically verified during the year by themanagement at reasonable intervals. No material discrepancy was noticed on physicalverification of stocks by the management as compared to book records.
iii. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted any loans secured orunsecured to companies firms Limited Liability Partnerships or other parties listed inthe register maintained under Section 189 of the Companies Act 2013. Consequently theprovisions of clauses iii (a) (b) and (c)of the order are not applicable to the Company.
iv. In respect of loans investments guarantees and security provisions of section185 and 186 of the Companies Act 2013 have been complied with.
v. As the company is registered under Reserve Bank of India as a Non-Banking FinanceCompany it is eligible to take Loan & Advances and grant Loan & Advances on suchterms & conditions which are prejudicial to the interest of the company.
vi. As per information & explanation given by the management maintenance of costrecords has not been specified by the Central Government under sub-section (1) of section148of the Companies Act 2013.
a) According to the records of the company undisputed statutory dues includingProvident Fund Investor Education and Protection Fund Employees' State InsuranceIncome-tax Sales-tax Service Tax Custom Duty Excise Duty value added taxcess and anyother statutory dues to the extent applicable have generally been regularly depositedwith the appropriate authorities. According to the information and explanations given tous there were no outstanding statutory dues as on 31st of March 2016 for a period of morethan six months from the date they became payable.
b) According to the information and explanations given to us there is no amountpayable in respect of income tax service tax sales tax customs duty excise duty valueadded tax and cess whichever applicable which have not been deposited on account of anydisputes.
vii. In our opinion and according to the information and explanations given by themanagement we are of the opinion that the Company has not defaulted in repayment of duesto a financial institution bank Government or debenture holders as applicable to thecompany.
viii. Based on our audit procedures and according to the information given by themanagement the company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) or taken any term loan during the year.
ix. According to the information and explanations given to us we report that no fraudby the company or any fraud on the Company by its officers or employees has been noticedor reported during the year.
x. According to the information and explanations given to uswe report that managerialremuneration has been paid in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act.
xi. The company is not a Nidhi Company. Therefore clause xii) of the order is notapplicable to the company.
xii. According to the information and explanations given to usall transactions withthe related parties are in compliance with sections 177 and 188 of Companies Act 2013where applicable and the details have been disclosed in the Financial Statements etc. asrequired by the applicable accounting standards.
xiii. The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.
xiv. The company has not entered into non-cash transactions with directors or personsconnected with him.
xv. The company is required to be registered under section 45-IA of the Reserve Bank ofIndia Act 1934 and the registration has been obtained.
For AMIT RAY & COMPANY
FRN No: 000483C
Nag Bhushan Rao Partner Membership No. 073144
Date: 30th May 2017
Report on Internal Financial Controls Over Financial Reporting
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 ARNOLDHOLDINGS LIMITED("the Company") as of 31stMarch 2017 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 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
3) 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.
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 31stMarch 2017 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 AMIT RAY & COMPANY
Chartered Accountants FRN No: 000483C
Nag Bhushan Rao Partner
Membership No. 073144
Date: 30th May 2017