THE MEMBERS OF KANUNGO FINANCIERS LTD
Report on the Standalone Financial Statements Opinion
We have audited the standalone financial statements of KANUNGO FINANCIERS LTD("the Company") which comprise the balance sheet as at 31st March 2018 and thestatement of Profit and Loss (statement of changes in equity) and statement of cash flowsfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information. In our opinion and tothe best of our information and according to the explanations given to us the aforesaidstandalone financial statements give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India. of the state of affairs of the Company as at March 312018 and profit/loss (changes in equity) and its cash flows for the year ended on thatdate. Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of.
Our report. We are independent of the Company m accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2010 and the Rules thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics.
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 mattersthat in our professional judgment were of most significance in cur audit of thefinancial statements of the current period. These matters were addressed in the contextof our audit of the financial statements as a whole and in forming our opinion thereonand we do not provide a separate opinion on these matters. Description of each key auditmatter in accordance with SA 701.
Management's Responsibility for the Standalone Financial Statements The Company's Boardof Directors is responsible for the matters stated in section Ml34(5) of the CompaniesAct 2013 ("the Act") with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance (changes in equity) and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of 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 statement that give a true and fair view andare 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 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.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process. Auditor's Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statementsas a whole are free from material misstatement whether due to fraud or error and toissue an auditor's report that includes our opinion. Reasonable assurance is a high levelof assurance but is not a guarantee that an audit conducted in accordance with SAs willalways detect a material misstatement. when it exists. Misstatements can arise from fraudor error and are considered material if individually or in the aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese financial statements. Other Matter
We did not audit the financial statements/ information of 0 branches included in thestand alone financial statements of the Company whose financial statements/financialinformation reflect total assets of Rs. 0 as at 31st March 2018 and the total revenue ofRs. 0 for the year ended on that date as considered in the standalone financialstatements/information of these branches have been audited by the branch auditors whosereports have been furnished to us and our opinion in so far as it relates to the amountsand disclosures included in respect of branches is based solely on the report of suchbranch auditors.
Our opinion is not modified in respect of these matters. Report on Other Legal andRegulatory 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 of the Companies Act 2013 we give in the Annexure A hereto astatement on the matters specified in paragraphs 3 and 4 of the said Order to the extentapplicable. 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 bestfour 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 reports on the accounts of the branch offices of the Company audited underSection 143(8) of the Act by branch auditors have been sent to us and have been properlydealt with by us in preparing this report.]
d) 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.
e) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 201*4.
f) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in termsof Section 164 (2) of the Act.
g) 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".
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 the explanations given to us:
i. The company has disclosed the impact of pending litigation as at 31stMarch 2018 on its financial position in its financial statements.
ii. The company did not have any long term contracts including derivative contracts forwhich there were any materia! foreseeable losses.
iii. There were no amounts' which were required to be transferred to the InvestorEducation and Protection Fund by the company during the year ended 31st March2018.
TO INDEPENDENT AUDITOR'S REPORT
Annexure referred to in paragraph 1 under the heading of "report on other legaland Regulatory Requirements" of our report of even date to the members of KANUNGOFINANCIERS LTD on the Standalone Financial Statements for the year ended 31st March 2018)
i. In respect to Fixed assets: (a)The Company has no Fixed Assets during the Year.
ii. In respect of its inventories:
(a) The management has conducted the physical verification of inventory at reasonableintervals.
b) The procedures of .physical verification of inventory followed by the managementreasonable and adequate in relation to the size of the company and the nature of itsbusiness.
c) In our opinion and on the basis of our examination of the records the Company isgenerally maintaining proper records of its inventories. No material discrepancy wasnoticed on physical verification of stocks by the management as compared to book records.
iii. In our opinion the Company has not granted any loans secured or unsecured tocompanies firms or other parties covered in the register maintained under section 189 ofthe Act.
iv. As per the information and explanation given to us there is no loan investmentguarantee security given by the company under section 185 of companies Act 2013.
V. As per the information and explanation given to us the company has not accepted anydeposits from the public within the provisions of sections 73 to 76 of the Companies Actand the rules framed there under.
vi. According to the information and explanations given to us Central Government hasprescribed maintenance of cost records under sub-section (1) of Section 148 of the Act2013 in respect of activities carried on by the company. We are of the opinion that primafacie the prescribed accounts and records have been made and maintained. However we havenot made a detailed examination of the same.
vii. In respect to Statutory dues:
a) The company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund investor education protection fund employees'state insurance income tax sales tax wealth tax service tax custom duty excise dutyand other material statutory dues applicable to it.
b) According to the information and explanations given to us no undisputed amountspayable in respect of income tax sales tax wealth tax service tax customs duty andexcise duty were in arrears as at for a period of more than six months from the date theybecame payable.
c) In our opinion and according to the information and explanations given to us thereare no disputed dues in respect of sales tax Income Tax excise duty Service Tax Cessand other statutory dues payable by the company as on 31st March 2018.
viii. In our opinion and according to the information and explanation given to us thecompany has not defaulted in the repayment of loans or borrowing to banks or financialinstitutions. The company has not issued any debentures.
x. The company did not raise atiy money by way of public offer or Further Public Offer(including debt Instrument) and term loan during the year. Accordingly the provisions ofclause 3 (x) of the Order are not applicable to the Company
xi. Based upon the audit procedures performed for the purposes of reporting the trueand fair view of the Standalone Financial Statements and as per the information andexplanations even by the management we report that no fraud by the Company and nomaterial fraud on the Company has been noticed or reported during the course of our audit.
xii. According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid or provided managerialremuneration within Limit as per companies Act 2013.
xiii. In our opinion and according to the information and explanation given to us thecompany is not a nidhi company. Accordingly paragraph 3(xii) of the order is notapplicable.
xiv. In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial statements as required by the applicable Accounting Standards.
xv. Based upon the audit procedure performed and the information and explanations givenby the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.
xvi. Based upon the audit procedures performed and the information and explanationgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3(xv) ofthe order are not applicable to the company and hence not commented upon.
xvii. In our opinion the company is not required to be registered under section 45IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3(xvi) ofthe order are not applicable to the company and hence commented upon.
TO THE INDEPENDENT AUDITOR'S REPORT
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013.
We have audited the internal financial controls over financial reporting of KANUNGOFINANCIERS LTD ("the Company") as of March 31 2018 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls The Company's management isresponsible for establishing and maintaining internal financial controls 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.
These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Auditor's Responsibility Our objectives are to obtain reasonable assurance aboutwhether the financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists.
Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.
Meaning of Internal Financial Controls Over Financial Reporting A company's internalfinancial control over financial reporting is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles.
A company's internal financial control over financial reporting includes those policiesand 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 :crimely detection ofunauthorised acquisition use or disposition of the company's sets that could have amaterial effect on the financial statements.
Internal Financial Controls Over Financial Reporting Because of the inherentlimitations of internal financial controls over financial reporting including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation1 of the internal financial controls over financial reporting tofuture periods are subject to the risk that the internal financial control over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.
Opinion In our opinion to the best of our information and according to theexplanations given to us 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 March 31 2018 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.