The Members of
CONTINENTAL SECURITIES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of CONTINENTAL SECURITIES LIMITED("the Company") which comprise the Balance Sheet as at March 31 2020 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 ofDirectors is responsible for the matters stated in Section 134(5) of the Companies Act2013 ("the Act") with respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Accounting Standards specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement 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
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 2020 and its profit/loss 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 Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 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 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 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (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"
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.
The Annexure referred to in paragraph 1 of Our Report on "Other Legal andRegulatory Requirements".
We report that:
i. In respect of Company's Fixed Assets :
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 title deeds of immovable properties are held in the name of the company.
ii. In respect of loans secured or unsecured granted by the company to companiesfirms or other parties in the register maintained under section 189 of the companies Act.
a. According to the information and explanations given to us the company has notgranted any loan to the parties listed in the register maintained under section 189 of theAct
b. The company has also given advances in the nature of loans of its employees whichare recovered regularly together with interest if applicable as per company policy.
iii. In respect of loans investments guarantees and security provisions of section185 and 186 of the Companies Act 2013 have been complied with and the investment inshares has been taken at cost their valuation can vary from time to time depending onstock market
iv. The company has not accepted any deposits from the public covered under sections 73to 76 of the Companies Act 2013.
v. 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.
vi. a. According to the records of the company undisputed statutory dues includingProvident Fund Investor Education and Protection Fund Employees? State InsuranceIncome- tax Goods and Services Tax and any other statutory dues to the extentapplicable have generally been regularly deposited with the appropriate authorities.According to the information and explanations given to us there were no outstandingstatutory dues as on 31st of March 2020 for a period of more than six months from thedate they became payable.
b. According to the information and explanations given to us there is no amountpayable in respect of income Tax Goods and Services Tax whichever applicable whichhave not been deposited on account of any disputes.
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. remuneration has been paid in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct.
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 us all 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. Company has not entered into non-cash transactions with directors or personsconnected with him and hence provisions of section 192 of the Act are not applicable.
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.
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 of CONTINENTALSECURITIES LIMITED ("the Company") as of March 31 2020 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding 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 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 ReportingA company's internal financial control over financial reporting is a process designed toprovide reasonable assurance regarding the reliability of financial reporting and the
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 authorizations of management and directors of the company; and
3. Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements. Inherent Limitations of Internal FinancialControls Over Financial Reporting Because of the inherent limitations of internalfinancial controls over financial reporting including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols over financial reporting to future periods are subject to the risk that theinternal financial control over financial reporting may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
In our opinion on the achievement of the objectives of the control criteria theCompany has maintained in all material respects adequate internal financial controlsover financial reporting and such internal financial controls over financial reportingwere operating effectively as at March 31 2020 based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note. We have considered thematerial weaknesses identified and reported above in determining the nature timing andextent of audit tests applied in our audit of the March 31 2020 financial statements ofthe Company and these material weaknesses does not affect our opinion on the financialstatements of the Company.
AUDITOR'S ADDITIONAL REPORT
Board of Directors Continental Securities Limited Jaipur
REPORT ON COMPLIANCE WITH THE NON-BANKING FINANCIAL COMPANIES AUDITOR'S REPORT (RESERVEBANK) DIRECTIONS2008.
Pursuant to the Non-Banking Financial Companies Auditor's Report (Reserve Bank)Directions 2008(the "Directions"). We have examined the matters specified inthe Directions in respect of Continental Securities Limited (the "Company") forthe year ended March 312020.
The Management is responsible for the design and implementation of the internalprocedures systems processes and controls to ensure compliance with the Directions on anongoing basis. This responsibility also includes reporting non-compliances if any to theReserve Bank of India Board of the Company and its Audit Committee.
Our responsibility is to report on the matters specified in the Directions based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India(ICAI).Those Standards require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether there are any identified non-compliances. An audit involves performingprocedures to obtain audit evidence about the compliance with the Directions. Theprocedures selected depend on the Auditor's Judgment including the assessment of therisks of material misstatement of the information and records whether due to fraud orerror . In making those risk assessments the Auditor considers internal controls relevantto the Company's compliance with the Directions in order to design audit procedures thatare appropriate in the circumstances. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our certificate. We conducted ourexamination in accordance with the Guidance Note on Special Purpose Audit Reports andCertificates issued by the Institute of Chartered Accountants of India.
Based on our examination of the books and records of the Company as produced for ourexamination and the information and explanations given to us we further report that:
1. The Company is engaged in the Business of non-banking financial institution and hasobtained a Certificate Of Registration (COR) No. 10.00022 dated march 3 1998 from theReserve Bank Of India ("the Bank") Department of Non-Banking Supervision JaipurRegional Office.
2. The Company is entitled to continue to hold such COR in terms of its asset/incomepattern as on 31st March 2020.
3. The Company during the year is not an Asset Finance Company (AFC) as defined inNon-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions 1998.
4. The Company during the year is not a Non-Banking Financial Company - Micro
Finance Institutions (NBFC- MFI) as defined in Non-Banking Financial Company MicroFinance Institutions (Reserve Bank) Direction 2011 dated December 02 2011 (MFIDirections).
5. The Board of Directors has passed a resolution for non-acceptance of publicdeposits.
6. The Company has not accepted any public deposits during the year ended 31st March2020.
7. The Company has complied with the prudential norms relating to income recognition accounting standards asset classification and provisioning for bad and doubtful debts asapplicable to it in terms of Systematically Important Non-Banking Financial(Non-DepositAccepting or Holding) Companies Prudential Norms(Reserve Bank)Directions2015.
8. The annual statement of Capital funds risk assets/exposures and risk asset ratio(NBS-9) has been furnished to the Bank within the stipulated period based on theun-audited books of account. The Company had correctly arrived at and disclosed thecapital adequacy ratio based on the un-audited books of account in the return submittedto the Bank in Form NBS-9 and such ratio is in compliance with the minimum CRAR prescribedby the Bank.
RESTRICTION ON USE
This report is issued pursuant to our obligations under Non-Banking Financial CompaniesAuditor's Report (Reserve Bank) Directions 2008 to Reserve Bank of India and should notbe used by any other person or for any other purpose. GOPAL SHARMA & CO. neitheraccepts nor assumes any duty or liability for any other purpose or to any other party towhom our report is shown or into whose hands it may come without our prior consent inwritten.
ANNEXURE TO THE AUDITOR'S REPORT
[Referred to in our report of even date to the Member of Continental Securities Ltd]:
(i) a. The Company is in the process of compiling fixed assets records to show fullparticulars including quantitative details and situation of fixed assets.
b. We were informed that all major items of fixed assets were physically verified bythe management at the end of the year and that no discrepancy was notified on suchverification which on account of proper records being still under compilation could notbe verified.
ii. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Companies Act2013. Accordingly the clause 3(iii) (a) and 3 (iii)(b) of the Order are not applicable tothe Company.
iii. a. In our opinion and according to information and explanation given to us; thereis adequate internal control system commensurate with the size of the Company and thenature of its business fixed assets and with regard to loans given. Further on the basisof our examination of books and records of the Company and according to the informationand explanations given to us we have not observed any continuing failure to correct majorweaknesses in the aforesaid internal control system.
iv. According to information and explanation given to us the central government hasnot prescribed maintenance of cast records under section (1) one of section 148 of thecompany's act 2013.
a. According to the information and explanation given to us the company has nodisputed outstanding statutory dues as at 31st march 2020.
b. According to the information and explanation given to us the amounts which werereacquired to be transferred to the investor Education and Protection fund and accordancewith the relevant provision of the company's Act 2013 and rules there under has beentransferred to such funds within time.
vi. The company does not have any accumulated losses at the end of the financial yearand has not incurred cash losses during the financial year end in the immediatelypreceding financial year.
vii. According to the information and explanation given to us the Company has notdefaulted in the repayments of dues to financial institution bank or debenture holderduring the year
viii. According to the information and explanation given to us the Company has notgiven any guarantee for loans taken by others from bank or financial intuitions during theyear.
ix. According to the information and explanation given to us the Company has appliedterm loans for the purpose for which the loans were obtained.
x. According to the information and explanation given to us no fraud on or by theCompany has been noticed or reported during the year review.