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Frontline Financial Services Ltd.

BSE: 531685 Sector: Financials
NSE: N.A. ISIN Code: INE776R01011
BSE 05:30 | 01 Jan Frontline Financial Services Ltd
NSE 05:30 | 01 Jan Frontline Financial Services Ltd

Frontline Financial Services Ltd. (FRONTLINEFIN) - Auditors Report

Company auditors report

To

THE MEMBERS

FRONTLINE FINANCIAL SERVICES LIMITED

REPORT ON THE FINANCIAL STATEMENTS

REPORT OF THE IND. AS FINANCIAL STATEMENTS

We have audited the accompanying financial statement of FRONTLINE FINANCIAL SERVICESLIMITED (the company) which comprise the Balance Sheet as at 31stMarch2019the Statement of Profit and Loss for the year then ended and statement of Cashflows Statements and notes to the financial statements including summary of significantaccounting policies and other explanatory information.

MANAGEMENT'S RESPONSIBILITY FOR THE IND. AS FINANCIAL STATEMETS

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act2013 ("the Act'') with respect to the preparation andpresentation of these Ind. AS 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 Indian Accountingstandards (Ind. AS) specified under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities ; selection and application of appropriate accounting policies;making judgment and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring 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.

In preparing the financial statements management is responsible for assessing thecompany's ability to continue as a going concern disclosing as applicable matters relatedto going concern and using the going concern basis of accounting unless management eitherintends to liquidate the Company or to cease operations or has no realistic alternativebut to do so. Those Board of Directors are also responsible for overseeing the Company'sfinancial reporting process.

AUDITORS' RESPONSIBILITY

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 have conducted our audit of theInd AS financial statements in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct. Those Standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the Ind ASfinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of theInd AS financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the Ind AS financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the Ind ASfinancial statements.

OPINION

We have audited the accompanying standalone financial statements of the Company whichcomprise the Balance Sheet as at March 31 2019 the Statement of Profit and Loss and theStatement of Cash Flows for the year ended on that date and a summary of the significantaccounting policies and other explanatory information (hereinafter referred to as"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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 the profit including the cashflows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SA's) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. Against Key audit matter our description of how ouraudit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the Standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matter below providethe basis.

Key Audit Matters

Key Audit Matters Auditor's Response
1. Recognition measurement presentation and disclosures of revenues from operations in view of adoption of Ind. AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard): The application of the new revenue accounting standard involves in addition certain other things recognition of revenue when control of goods or services are transferred to the customer at an amount that reflects the consideration to which the company expects to be entitled in exchange. According to the company revenue recognition criteria is depends on the terms and conditions of the contracts with customers within the segment. Further revenue is regarded by management as most important Key performance indicator. Accordingly revenue was determined as Key Audit Matter. Our Audit procedure included the following:
• Evaluation of revenue recognition criteria of the company and determination of existence of any material and significant deviation from applicable accounting standards.
• Assessment of effectiveness of internal control of the company with respect to revenue recognition.
• Test checks of revenue recognized on the basis of terms and conditions of the contracts for measurement and its accuracy.
• Review of sample customer accounts for any variation in recognition.
2. Inventory of Raw material and Finished Goods To address the matter our audit procedure included amongst others:
We refer to Significant accounting policies on inventory and Note. No.VIII on inventory. Inventories are considered as Key Audit Matter due to nature of business technical indicators governing inventory valuation size of • Assessing the compliance of accounting policies over inventory with applicable accounting standards.
Balance sheet and because inventory valuation involves management judgment. According to accounting policy followed by the company inventories are valued at lower of cost or market value. Cost comprise in addition to other things overheads related to material labour and other overheads. The company has specific procedures to identify risk for obsolescence and valuation of inventories. • Assessing the inventory valuation process and practices.
• Assessing the analysis and assessment made by management with respect to slow moving or obsolete stock.
• Discussion with those charged with responsibility of overlooking inventory management process.
• Expert opinion obtained by the company on the technicalities of matter.
• Justification of management estimates and Judgments.
• Assessing the effectiveness of perpetual and physical inventory verification process.
It should be advisable for the company to maintain proper records to enable us to judge / verify and carry out valuation of the inventory for the purpose of Audit.
3. Previous Years Balances as at 31.03.2018 including Current Assets Loans and Advances Current Liabilities Unsecured Loans etc. To address the matter our audit procedure included amongst others:
• We have relied on the Previous Year's Auditor's Report on The Ind AS financial statements of the Company for the year ended March 31 2018 included in these Ind AS financial statements were audited by the predecessor auditor M/s. Kamlesh Bhojani& Associates (M no.119808 FRN – 127505W) who expressed an unmodified opinion on those statements on May 22 2017.
• No data available for us to verify the Opening Balances as at 01.04.2018 and hence we are not able to comment on the same.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by Central Government of India in terms of sub-Section (11) of section 143 of theAct we give in "Annexure-1" a statement on the matters specified in paragraphs3 and 4 of the Order to the extent applicable. by the Central Government of India interms of Sub-section (11) of section 143 of the Act We have given in the ‘AnnexureA' a statement on the matters specified in paragraph 3 & 4 of the order.

2. As required by Section 143 (3) of the Act we report that: a. We have obtained allthe information and explanation which to the best of our knowledge and belief werenecessary for the purpose of our audit;

b. In our opinion proper books of accounts as required by law have been kept by theCompany so faras appears from our examination of those books.

c. The Balance Sheet Statement of Profit and Loss Cash flow statement dealt with bythis Report are in agreement with the books of accounts.

d. In our opinion the aforesaid Standalone Ind AS financial statement comply with theIndian AS specified under section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended;

e. On the basis of written representations received from the directors as on March 312019 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of section 164(2) of theAct

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone financial statements and theoperating effectiveness of such controls refer to our separate report in"Annexure-2" to this report.

g. In our opinion the Managerial remuneration for the year ended March 31 2019 hasbeen paid/ provided by the company to its directors in accordance with the provisions ofSection 197 read with Schedule V to the Act.

h. 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 explanation given to us:

i) The Company did not have any pending litigation as on 31st March 2019which would impact its financial statements.

i) The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

ii) There were no amounts which were required to be transferred to the InvestorEducation and protection fund by the company.

For Nirav Kothari & Co
Chartered Accountant
Place : Ahmedabad. (Nirav A. Kothari)
Date : 30.05.2019 Proprietor
M. No. 136372
FRN.: 132927W

Annexure to the Independent Auditor's Report

Annexure - 1 to The Independent Auditor's Report to members of Kiri Industries Ltd forthe year ended 31st March 2019

(Referred to in Paragraph 1 under "Report on Other Legal and RegulatoryRequirements" section of our report of even date on the Standalone Ind AS financialstatements of the company for the year ended 31st March 2019)

On the basis of such checks as we considered appropriate according to the informationand explanation given to us by the management and on the basis of examination of books ofaccounts during the course of our audit we report that:

1. a) The company has not maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.

b) It is explained by the Directors of the Company that the company is in the processof maintaining of proper records showing full particulars including quantitative detailsand situation of its fixed assets and conducting physical verification of Fixed assets forthe year.

2. a) The company has not maintained proper records showing full particulars includingquantitative details and situation of its inventory.

b) Inventories have been physically verified during the year by the management; and

c) It is reported by the management of the company that No material discrepancy wasnoticed on physical verification of stocks by the management.

d) It is explained by the Directors of the Company that the company is in the processof maintaining of proper records showing full particulars including quantitative detailsand situation of its Inventory and conducting physical verification of the same for theyear.

3. According to the information and explanations given to us company has granted Loans& Advances to staff for their personal needs were as per the prevailing rules andregulations of the Companies Act. We have relied on the management of the company for thesame.

4. The Company has not raised money through initial public offer nor taken any termloan during the year. Hence the requirement of application of funds for the purpose forwhich these were borrowed does not arise.

5. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii) (a)(b) and (c) of theOrder are not applicable to the Company and hence not commented upon.

6. We have been informed that maintenance of cost records under sub-section 1 ofsection 148 of the Companies Act 2013 is mandatory for the company and such records aremaintained by the company. However we have not made examination of the cost records with aview to determine whether they are accurate or complete.

7. No material fraud on or by the Company has been noticed or reported during the yearnor have we been informed of such case by the management.

8. During the year under review the company has paid managerial remuneration inaccordance with the requisite approvals mandated by the provisions of the section 197 readwith schedule V to the companies act.

9. It is explained by the Management that the transactions with related party are incompliance with sections 177 and 188 of the Companies Act 2013.

10. It is explained by the Management that The Company has not entered into non-cashtransaction with directors or person connected with them during the year.

11. The Company is not required to be registered under section 45-IA of Reserve Bank ofIndia Act 1934.

For Nirav Kothari & Co
Chartered Accountant
Place : Ahmedabad. (Nirav A. Kothari)
Date : 30.05.2019 Proprietor
M. No. 136372
FRN.: 132927W

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE IND AS THE FINANCIALSTATEMENTS OF M/S. FRONTLINE FINANCIAL SERVICES LTD FOR THE YEAR ENDED 31STMARCH 2019

(Referred to in Paragraph 2(f) under "Report on Other Legal and RegulatoryRequirements" section of our reports of even date on the Standalone Ind AS financialstatements of the company for the year ended 31st March 2019.)

Report on the Internal Financial Control clause (i) of sub-section 3 of section 143 ofthe Companies Act 2013 ("the Act")

We have audited the Internal Financial Controls over financial reporting of M/s.FrontlineFinancial Services Ltd ('the Company') as of March 31 2019 in conjunction with ouraudit of the financial statements of the Company for the year then 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 financialcontrols that were operating effectively for ensuring the orderly and efficient conductof its business including adherence to Company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Companies Act 2013.

Auditor's Responsibility

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 Act to the extent applicable to an audit ofInternal Financial Controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting were established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe Internal Financial Controls over financial reporting and their operatingeffectiveness. Our audit of Internal Financial Controls over financial reporting includedobtaining understanding of Internal Financial Controls over financial reporting assessingthe risk that a material weakness exists and testing and evaluating the design andoperating effectiveness of the Internal Controls based on 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 overfinancial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's Internal Financial Controls over financial reporting is a process designedto provide reasonable assurance regarding the reliability of the financial reporting andthe preparation and presentation of the financial statements for external purposes inaccordance with generally accepted accounting principals. A company's Internal FinancialControls over financial reporting 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 accountingprincipals and that receipts and expenditures of the company are being made only inaccordance with the authorizations of the 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 Financial Controls over Financial Reporting

Because of 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 Controlsover 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 and to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate Internal FinancialControls over Financial Reporting and such Internal Financial Controls over FinancialReporting were operating effectively as at 31st March 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 Nirav Kothari & Co
Chartered Accountant
Place : Ahmedabad. (Nirav A. Kothari)
Date : 30.05.2019 Proprietor
M. No. 136372
FRN.: 132927W

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