To the Members of M/s Kanungo Financiers Ltd.
Report on the Financial Statements ..
We have audited the accompanying financial statements of M/s KANUNGO FINANCIERS LTD("the Company") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss Cash Flow Statement for the year then ended and a summaryof significant accounting 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 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. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of
adequate internal financial controls that were operating effectively for ensuring. theaccuracy and completeness of the accounting records relevant to the preparation and
presentation of the financial statements that give a true and fair view and 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 but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls.
An audit also includes evaluating the appropriateness of the accounting policies usedand the reasonableness of the accounting estimates made by the Company's Directors aswell as evaluating the overall presentation of the financial statements.
We believe that the audit ~vidence we have obtained is sufficient and appropriate to
provide 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 requireel by the Actin the manner so required and give a tr~e and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2017 and its (Loss) that date .
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order.
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 purpose 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 written representations received from the directors as on March 312017 taken on record by the Board of Directors none of the directors is disqualifie9 ason March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct. _
f. With respect to adequacy ?f 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 has disclosed the impact of pending litigation!:l on its financialposition in its financial statements - Refer Note (3) and (4) of Part B to Notes toaccounts ;
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There has been no delay in transferring the amounts required to be transferred to the Investor Education and Protection Fund by the Company.
(iv) The Company has provided disclosures in its financial statements as to holdings aswell as dealings in specified bank notes during the period from 8th November 2016 to 30thDecember 2016 Based on audit procedures and relying on the management representation wereport that the disclosures are in accordance with books of account maintained by theCompany and as produced to us by the Management - Refer Note No. [8 of Part B to Notes toAccounts]
|Ahmedabad. ||Gaurang Vora Pro ietor |
|Date 30/05/2017 ||For and on behalf of Gaurang Vora & Associates |
| ||Chartered Accountant. |
|Membership No. 39526 ||PAN: ABJPV8347B ||FRN: 103110W |
.. Annexure A" to the Independent Auditors' Report
Referred to in paragraph 1 under the heading 'Report on Other Legal & RegulatoryRequirements' of our report of even date to the financial statements of the Company forthe year ended March 31 2017:
1. In respect of Fixed Assets :
(a) The Company is maintaining. proper records showing full particulars
including quantitative details and situation of fixed assets;
(b) The Fixed Assets have been physically verified by the management in a phasedmanner designed to cover all the items over a period of five years which in our opinionis reasonable having regard to the size of the company and nature of its business.According to information and explanation given to us no material discrepancies werenoticedon such verification.
(c) The title deeds of immovable properties are held in the name of company.
2. In respect of Inventories:
According to information and explanation given to usPhysical verification ofinventories has been conducted in reasonable interval by the Management and no materialdiscrepancies were noticed on physical verification during the year.
3. According to information and explanation given to us the Company has not grantedany loans secured. or unsecured to companies firms Limited Liability partnerships orother parties covered !n the Register maintained under section 189 of the Act.Accordingly the provisions of clause 3 (iii) (a) to (C) of the Order are not applicableto the Company and hence not commented upon.
4. In our opinion and according to the information and explanations given to us_ thecompany has not granted loan or given guarantee or provided security as provided in thesection 185 and I86 of the Companies Act 2013 In re?pect of loans investmentsguarantees and security.
5. According to information and explanation given to us the Company has not acceptedany deposits from the public and hence the directives issued by the Reserve Bank of Indiaand the provisions of Sections 73 to 76 or any other . relevant provisions of the Act andthe Companies (Acceptance of Deposit)
Rules 2015 with regard to the deposits accepted from the public are not applicable.
6. According to the information and explanation given to us the central government hasprescribed maintenance of cost records under sub section (1) of section 148 of theCompanies Act ' 2013 .in respect of manufacturing activities of the Company. We are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the same.
7. According to information and explanations given to us in respect of statutory duesand on the basis of our examination of the books of account and records
(a) the Company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income-Tax Sales tax Service TaxDuty of Customs Duty of Excise Value added Tax Cess and any other statutory dues withthe appropriate authorities. According to the information and explanations given to us noundisputed amounts payable in respect of the above were in arrears as at March 31 2016for a period of more than six months from the date on when they become payable.
b) According to the information and explanations given to us there are nomaterial" dues of income tax sales tax and service tax value added tax wealth taxduty of customs and Cess which have not been deposited with the appropriate authorities onaccount of any dispute
8. The Company has not defaulted in repayment of loan or borrowing to financialinstitution bank government or dues to debenture holders.
9. According to the information and explanations given by the management tl}e companyhas not raised moneys by way of initial public offer or further public offer includingdebt instruments and term Loans during the year. A<:cordingly the provisions of clause3 (ix) of the Order are not applicable to the Company.
10.According to the information and explanations given by the management we reportthat no fraud by the Company or on the company by its officers or employees has beennoticed or reported during the year.
In our opinion the provisions of Section 197 read with Schedule V to the Companies Actare not applicable to the company and hence not commented upon.
12.In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
13.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.
14.According to the information and explanations given by the management the companyhas not made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review. Accordingly the provisions of clause3 (xiv) of the Order are not applicable to the Company and hence not commented upon.
15.Atcording to the information and explanations given by the management the companyhas not entered into any non-cash transactions with directors or persons connected withhim. Accordingly the provisions of clause 3 (xv) of the Order are not applicable to theCompany and hence not commented upon.
16.In our opinion the company is not required to be registered under section 45 lA ofthe .Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.
|Ahmedabad. || ||Gaurang Vora Proprietor |
|Date 30/05/2017 ||For and on behalf ||of Gaurang Vora & Associates |
| || ||Chartered Accountant. |
|Membership No. 39526 ||PAN: ABJPV83478 ||FRN: 103110W |
[A] STATEMENT OF ACCOUNTING POLICIES AND NOTES FORMING PART OF
1) Basis of Accounting:
The financial statements of the company have been prepared in accordance with theGenerally Accepted Accounting Principles in India (Indian GAAP). The Company has preparedthese financial statements to comply in all material respects with the Companies(Accounts) Rules 2014 and the relevant provisions of the companies Act 2013. Thefinancial statements have been prepared on an accrual basis and under the historical costconvention. The accounting policies adopted in the preparation of financial statements areconsistent with those of previous year.
2) Use of Estimates :
The presentation of financial statements require estimates and disclosure of contingentliabilities assumptions to be made that affect the reported amount of Assets ~ndLiabilities on the date of the financial statements and the reported amount of revenuesand expenses during the reporting period. Results of operations during the reportingperiod. Although these estimates are based upon management's best knowledge of currentevents and actions actual results could differ from these estimates. Difference betweenthe actual results and estimates are .recognized in the year in which the results areknown /materialized.
3) Fixed Assets:
Fixed Assets are stated at cost of acquisition or construction net of recpverabletaxes including incidental expenses related to acquisition and installation and financingcosts till the commencement of commercial production and adjustments arising fromexchange rate variation relating to attributable to fixed assets less accumulateddepreciation (If any) .
4) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or construction of qualifyingassets are capitalized as part of the cost of such assets. A qualifying asset is one thatnecessarily takes substantial period of time to get ready for intended use. All otherborrowing costs are charged to revenue.
Long Term Investments are carried at cost less provision for permanent diminution ifany in value of such investments.
6) Employees Retirement Benefits:
Short term employee benefits if any (which are payable within 12 months after the endof the period in which the employees render service) are measured at cost other thanleave encashment payaiJ'Ie within 12 months from the end of the year.
Long term employee benefits if any (which are payable after the end of 12 months fromthe end of the period in which the employees render service) and post employment benefits(benefits which are payable after completion of employment) are accounted for on cashbasis. Contributions to provident fund a defined contribution plan are made in accordancewith the statute.
7) Revenue Recognition:
Income and Expenditure are recognized and accounted on Accrual Basis. Revenue from Saleof goods is recognized on delivery of the goods when all significant contractualobligations have been satisfied the property in the goods is transferred for a pricesignificant risks and rewards of ownership are transferred to customers and no effectiveownership is retained However;
a) Revenue in respect of insurance/other claims etc is recognized only
when it is reasonably certain that the ultimate collection will be made.
b) Export Incentives in respect of exports made is accounted for when right
I to receive is established if any. c) Dividend income is recognized when theright to receive is established.
d) Interest income is recognized on a time proportion basis taking into account theamount outstanding and the applicable rate of interest.
e) Interest received on delayed payment is accounted on receipt basis.
8) Earnings per Share:
The earnings considered in ascertaining the Company's EPS comprises the net profit/lossafter tax (and include the post tax effect of any extra ordinary item). The number ofshares used in computing Basic EPS is the weighted average number of equity sharesoutstanding during the year. For the purpose of calculating diluted earnings per sharethe net profit or loss for the period attributable to equity shareholders by the weightedaverage number of equity shares outstanding during the period are adjusted for the effectsof all dilutive potential equity shares.
9) Taxation: (a) Direct Taxes :
Tax expense for the year comprising Current Tax if any and' Deferred Tax are includedin determining the net profit for the year.
A provision is made for deferred tax for all timing differences arising between taxableincomes and accounting income at currently enacted tax rates.
Deferred tax assets are recognized only if there ts reasonable certainty that they willbe realized and are reviewed for the appropriateness of their respective carrying valuesat each balance sheet date.
(b) Indirect Taxes:
The liabilities are provided or considered as contingent depending upon the merit ofeach case and/or receiving the actual demand from the-----
10) Provisions and Contingent Liabilities:
A provision is recognized when the company has a present obligation as a result of pastevent and it is probable that an outflow of resources will be required to settle theobligation in respect of which a reliable estimate can be made. A contingent liability isdisclosed when the company has a possible or present obligation where it is not probablethat an outflow of resources will be required to settle it. Contingent assets are neitherrecognized nor disclosed.
8] NOTES ON FINANCIAL STATEMENT
1. The Company has not recognized any Deferred Tax Assets I Deferred TaxLiabilities on timing difference between accounting income and Taxable income as thecomponent for the same are not present for the year under consideration. The company willrecognize Deferred tax assets and Deferred tax liabilities when there is virtual certaintythat sufficient future taxable income will be available against which such Deferred TaxAssets can be realized.
2. Contingencies and Capital Commitment.
In view of the management there were no Contingencies I Capital Commitments ason 31st March 2017.
3 .. Outstanding balances as on 31-03-~017 of Creditors Debtors Secured and UnsecuredLoans and Loans & Advances given are subject to confirmation I reconciliation.Necessary adjustments if any will be made on completion of
reconci I iation.
4. During the year under audit the company has set off credit balance as sundrycreditor\Unsecured loans against loans & advances\Investments given to related partyand others which has not been routed through profit & loss account.
5. As per information & explanation given to uswe have consider amount outstandingof creditors as Trade Payables (Other than MSMED) A<;:GOli:Wl~
. amount are showing in financial statement.
6. In absence of information's explanations that amount given\taken as LoansInvestments Advances made etc .. not in the normal course of business.
7. Previous year figures have been regrouped I re-stated I reclassifiedwhere necessary. Figures in brackets relate to the previous year unless otherwise
8. Details of Specified Bank Notes held and transacted during the period from08.11.2016 to 30.12.2016 as provided in the table below.
| || || ||Other || |
|Particulars || ||SBNs ||Denomination ||Total |
| || || ||Notes || |
|Closing Cash in hand as on || || || || |
|08.11.2016 || || ||1939054 ||1939054 |
|( +) Permitted Receipts || ||- ||- ||- |
|(-) Permitted Payments || ||- ||- ||- |
| ||- || || || |
|(-)Amount Deposited in Banks || || ||- || |
|Closing Cash in hand as on || || ||. || |
|30.12.2016 || ||- ||- ||- |
The Specified Bank Notes is defined as Ban.k Notes of Denominations of the existing
Series of the value of Five Hundred Rupees and One Thousand Rupees.
The disclosure with respect to Permitted Receipts Permitted Payments Amount depositedin banks and Closing Cash in hand as on 30.12.2016 is understood to be applicable in caseof SBN only.
|Ahmedabad. || ||Gaurang Vora Proprietor |
|Date 3010512017 || |
For and on behalf of Gaurang Vora & Associates
| || ||Chartered Accountant. |
|Membership No. 39526 || |
Annexure to the Independent Auditor's report of even date on the Standalone financialstatements of M/S KANUNGO FINANCIERS LTD.
Report on the Internal Financial Controls under Clause (1) of Sub-section 3 of Sec.143of the Companies Act2013("the Act")
We have audited the internal financial controls over financial reporting of. M/SKANUNGO FINANCIERS LIMITED. ("the Company") as of March 312017 inconjunction with our audit of the financial statements of the Company for the year endedon 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 businessineluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the tim~ly preparation of -reliable financial information as required underthe Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting l::fased on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Act to the extent applicable toan audit of internal financial controls both applicable to an audit of internalFinancial Controls and both issued by the Institute of Chartered Accountantsof India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether
~audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls systems 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 purpose in accordance with generallyaccepted acco.unting 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 authorizations ofmanagement and directors of the company and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material 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 evalu~tion of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol