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Dharani Finance Ltd.

BSE: 511451 Sector: Financials
NSE: N.A. ISIN Code: INE899D01011
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NSE 05:30 | 01 Jan Dharani Finance Ltd
OPEN 1.50
PREVIOUS CLOSE 1.50
VOLUME 100
52-Week high 3.51
52-Week low 1.36
P/E 12.50
Mkt Cap.(Rs cr) 1
Buy Price 1.45
Buy Qty 30.00
Sell Price 1.50
Sell Qty 100.00
OPEN 1.50
CLOSE 1.50
VOLUME 100
52-Week high 3.51
52-Week low 1.36
P/E 12.50
Mkt Cap.(Rs cr) 1
Buy Price 1.45
Buy Qty 30.00
Sell Price 1.50
Sell Qty 100.00

Dharani Finance Ltd. (DHARANIFINANCE) - Auditors Report

Company auditors report

To the members of Dharani Finance Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Dharani Finance Limited("the Company") which comprise of the Balance Sheet as at March 31 2019 theStatement of Profit and Loss and the Statement of Cash Flows for the year then ended andnotes to the financial statements including a summary of the significant accountingpolicies and other explanatory information.

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 theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and its profit and cash flows forthe year ended as on that date.

Basis for opinion

We conducted our audit in accordance with the standards on auditing ("SAs")specified under section 143 (10) of the Companies Act 2013. Our responsibilities underthose Standards are further described in the auditor's responsibilities for the audit ofthe financial statements section of our report. We are independent of the Company inaccordance with the code of ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's code of ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Key audit matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to becommunicated in our report.

Details of Key Audit Matter

Trade Receivables outstanding for more than 6 months

Trade Receivables outstanding for more than 6 months from the date on which they aredue amounts to Rs.191.13 Lakhs as on the reporting date.

The Company has concluded that no provision is considered necessary as they arerecoverable from a group company and is backed by sufficient collateral security

Auditors' Response to the Key Audit Matter

Principal Audit Procedures

We assessed the Company's process to identify the recoverability of trade receivable.

Our audit approach consisted testing of the design and operating effectiveness of theinternal controls and substantive testing as follows:

(a) Evaluated the design of internal controls relating to evaluation of credit risk intrade receivable.

(b) Selected a sample of continuing and new contracts and tested the operatingeffectiveness of the internal control relating to identification of credit risk.

(c) Selected a sample of continuing and new contracts and performed the followingprocedures:

• Read analysed and identified the process of fixing the credit limits afterevaluating credit risk of the customers.

• Compared the results with those identified and recorded by the Company.

• Considered the terms of the contracts to determine the credit period and to testthe basis of estimation of the credit risk.

• Performed subsequent realisation and movement in the trade receivable

• Obtained and evaluated management estimation of future recoverability

Information other than the financial statements and auditors' report thereon

The Company's board of directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's

Report including Annexures to Board's Report Business Responsibility Report CorporateGovernance and Shareholder's Information but does not include the financial statementsand our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the 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 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.

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 and detecting 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The board of directors is also responsible for overseeing the Company's financialreporting process.

Auditors' Responsibility for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal controls relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

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 inAnnexure "A" a statement on the matters specified in clauses 3 and 4 of theOrder.

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 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) In our opinion the balance sheet statement of profit and loss and cash flowstatement comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014;

d) The balance sheet the statement of profit and loss and the statement of cash flowdealt with by this report are in agreement with the books of account;

e) On the basis of the written representations received from the directors of theCompany as on March 31 2019 taken on record by the board of directors none of thedirectors are disqualified as on March 31 2019 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". 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'sReport in accordance with the requirements of section 197 (16) of the Act as amended inour opinion and to the best of our information and according to the explanations given tous the remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act; and

h) with respect to the other matters to be included in the auditors' 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 litigation which would impact its financialposition ii. The Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe investor education and protection fund by the Company.

For CNGSN & Associates LLP
Chartered Accountants
Firm Registration No.004915S/ S200036
(CHINNSAMY GANESAN)
Partner
Membership No. 027501
Place : Chennai
Date: 27th May 2019

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the members of Dharani Finance Limited of evendate)

1. In respect of the Company's fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. The Company is in the process ofupdating certain particulars regarding the fixed assets. In our opinion this will nothave any material impact on the financial statements.

(b) The Company has physically verified all the items of fixed assets during the year.According to the information and explanations given to us no material discrepancies werenoticed on such verification.

(c) According to the information and explanations given to us the company does notpossess any immovable property. Accordingly paragraph 3(i)(c) of the order is notapplicable.

2. The company is a non-deposit accepting Non-Banking Finance Company (NBFC) andaccordingly does not hold any inventories. Accordingly paragraph 3(ii) of the order isnot applicable.

3. According to information and explanation given to us the company has granted intercorporate loans to a Company covered in the register required to be maintained undersection 189 of the Companies Act 2013. The Company has not granted any other loanssecured or unsecured to firms limited liability partnerships or other parties covered inthe register required to be maintained under section 189 of the Companies Act 2013. Inrespect of such deposits we report that

(a) the terms and conditions of the acceptances of such deposits are in our opinionprima facie not prejudicial to the Company's interest;

(b) the schedule of repayment of principal and payment of interest has been stipulatedand repayments of principal amounts and interest have been regular as per stipulations;and

(c) there is no overdue amount remaining receivable as at the year-end

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.

5. In our opinion and according to the information and explanations given to us theCompany has not accepted deposits during the year and does not have any unclaimed depositsas at March 31 2019 and accordingly the provisions of the paragraph 3 (v) of the Orderare not applicable to the Company.

6. According to the information and explanation given to us the Central Government hasnot prescribed the maintenance of cost records under sub section (1) of section 148 of theCompanies Act 2013. Accordingly paragraph 3 (vi) of the Order is not applicable.

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 taxvalue added tax goods and services tax customs duty excise duty cess and othermaterial statutory dues applicable to it with the appropriate authorities;

(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 servicestax customs duty excise duty cess and other material statutory dues in arrears as atMarch 31 2019 for a period of more than six months from the date they became payable.;and

(c) There are no dues of income tax sales tax service tax excise duty value addedtax and goods and services tax which have not been deposited as at March 31 2019 onaccount of dispute.

8. The Company has not defaulted in repayment of loans or borrowing from banks. TheCompany did not have any outstanding dues to any financial institutions government ordebenture holders during the year.

9. In our opinion and according to the information and explanations given to us theterm loans taken by the Company have been applied for the purpose for which they wereraised. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year.

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.

11. In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

12. The Company is not a Nidhi Company and accordingly reporting under clause 3 (xii)of the Order is not applicable to the Company.

13. According to the information and explanations given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with section 177 and 188 of the Act. Where applicable the details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

14. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the order is not applicable.

15. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the order is not applicable.

16. According to the information and explanations given to us and based on ourexamination of the records of the company the company is required to be registered undersection 45-IA of the Reserve Bank of India Act 1934. Accordingly registration has beenobtained.

For CNGSN & Associates LLP
Chartered Accountants
Firm Registration No.004915S/ S200036
(CHINNSAMY GANESAN)
Partner
Membership No. 027501
Place : Chennai
Date : 27th May 2019

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 (f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Dharani Finance Limited of evendate)

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 internal financial controls over financial reporting of DharaniFinance Limited ("the Company") as of March 31 2019 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 board of directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143 (10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. 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 in 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 control 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material 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 of 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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlsystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 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 CNGSN & Associates LLP
Chartered Accountants
Firm Registration No.004915S/ S200036
(CHINNSAMY GANESAN)
Partner
Membership No. 027501
Place : Chennai
Date : 27th May 2019