THE MEMBERS OF
KAPIL RAJ FINANCE LIMITED REPORT ON FINANCIAL STATEMENTS
We have audited the accompanying financial statements of KAPIL RAJ FINANCE LIMITED("the Company") which comprise the Balance Sheet as at 31st March 2017 theStatement of Profit and Loss for the year the ended Cash Flow Statement for the year endon that date and as summary of significant accounting policies and other explanatoryinformation.
MANAGEMENTS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act2013 ("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 safe guarding of the assets of the Company and forpreventing 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 we re-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.
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 there under. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143 (10) of the Act. ThoseStandards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the financial statements are free frommaterial misstatement. An audit involves performing procedures to obtain evidence aboutthe amounts and disclosures in the financial statements. The procedures selected depend onthe auditors judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompanys preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Companys Directors as wellas evaluating the overall presentation of the financial statements. We believe that theaudit evidence we have obtained insufficient and appropriate to provide a basis for ouraudit opinion on the financial statements.
BASIS FOR QUALIFIED OPINION
The company has not registered and enrolled itself as per the provisions of theMaharashtra State Tax on Profession Trades Calling and Employment Act 1975 whichattracts Tax Liability under the Act along with interest and penalty under the provisionsdue there on. The extent of liability is not determinable in absence of availability ofinformation in this regards.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis of QualifiedOpinion paragraph above and subject matter described under "Emphasis of Matter"the 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 principlesaccepted in India. a. In the case of the Balance Sheet of the state of affairs of thecompany as at March 312017; b. In the case of Statement of Profit and Loss of the Profitfor the year ended on that date; and c. In the case of the Cash Flow Statement of thecash flows for the year ended on that date.
EMPHASIS OF MATTER
Attention is invited to the following:
1. The company carries on Finance Activities and hence by the guidelines issued by theReserve Bank of India the company complies to be a Non-Banking Financial Company (NBFC).This requires the company to get itself registered with the Reserve Bank of India as aNBFC the company has made application with the Reserve Bank of India to get itselfregistered has received some queries in that behalf and further process is awaited.
2. The company has carried on Business Activities during the year being PrincipalBusiness Activity viz. dealing in Futures and Options Market (Derivatives Market) engagedin Speculation Business in Equity Commodity and Foreign Exchange Markets. Theseactivities are not part of the object clause of the company
3. The Business Activity transactions dealing in Trading Derivatives and SpeculationTransactions related to Equities Future and Options segment Foreign Exchange andCommodities are not accounted as per the generally accepted principles.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by The Companies (Auditors Report) Order 2015 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we enclose in the Annexure a statement on thematter specified in the paragraphs 3 and 4 of the said Order.
2. As required by section 143(3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose so four audit. b) In our opinion proper books ofaccount as required by law have been kept by the Company except for the matter referredin the "Emphasis of Matter" at point no.3 so far as appears from ourexamination of those books. c) The Balance Sheet Statement of Profit and Loss and CashFlow dealt with by this Report are in agreement with the books of account. d) In ouropinion the aforesaid financial statements comply with the Accounting Standards specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014except for the matter referred in the "Emphasis of Matter" at point no.9. e) Onthe basis of the written representations received from the directors as on March 31 2017taken on record by the Board of Directors none of the directors is disqualified as onMarch 31 2017 from being appointed as a director in terms of Section 164(2) of the Act.f) 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 in our opinionand to the best of our information and according to the explanations given to us: i. TheCompany does not have any pending litigations which would impact its financial position.ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses. iii. There were no amounts which wererequired to be transferred to the Investor Education and Protection Fund by the Company.
For Vinodchandra R Shah & Co.
Gaurav J Parekh
M. No. 140694
Date:- 30th May 2017
"ANNEXURE A"TO THE INDEPENDENT AUDITORS REPORT
The Annexure referred to in Our Report of even date to the members of KAPIL RAJFINANCE LIMITED on the accounts of the company for the year ended March 312017.On thebasis of such checks as we considered appropriate and according to the information andexplanations given to us during the course of our audit we report that:
I. In respect of its Fixed Assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.
c) No disposal of a substantial part of fixed assets of the Company has taken placeduring the year.
II. In respect of its Inventory:
As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on physicalverification.
III. The company has not granted any loans secured or unsecured to companies firmsor other parties covered in the register maintained under section 189 of the Act.
IV. In our opinion and according to the information and explanations given to usduring the course of audit there is an adequate internal control system commensurate withthe size of the company and the nature of its business with regards to purchase of fixedassets. In our opinion and according to the information and explanations given to usthere is no continuing failure to correct major weakness in internal control system.
V. The company has not accepted any deposits from the public in accordance with theprovisions of section 73 to 76 of the Act and the Rules framed there under.
VI. The Central Government has not prescribed the maintenance of cost records undersubsection (1) of Section 148 of the Act for the business carried out by the Company.Accordingly paragraph 3 (vi) of the order is not applicable.
VII According to the information and explanations given to us the Company has notdelayed in depositing undisputed statutory dues including Income Tax and other statutorydues with the appropriate authorities except the following:
a) The company has not registered and enrolled itself as per the provisions of theMaharashtra State Tax on Profession Trades Calling and Employment Act 1975 whichattracts Tax Liability under the Act. The extent of liability is not determinable inabsence of availability of information in this regards.
b) According to the information and explanations given to us there are no statutorydues which have not been deposited with the appropriate authorities on account of anydispute.
VIII. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund in accordance with the relevant provisions of the CompaniesAct 2013 and rule made there under.
IX. The Company has not taken any loan from any financial institution or banks.Accordingly Paragraph 3(ix) of the
Order is not applicable
X. Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable for the Company.
XI. During the course of our examination of books and records of the Company carriedout in accordance with generally accepted auditing practices in India and according tothe information and explanations given to us we have either come across any instances ofmaterial fraud on or by the Company noticed or reported during the year nor have we beeninformed of such case by the management.
XII. The Managerial Remuneration has been provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule V of the CompaniesAct 2013.
XIII. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly the provisions of clause 3 (xii) of the Orderare not applicable to the Company
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 procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3(xiv) of the Order are not applicable tothe Company.
XVI. Based upon the audit procedures performed and the information and explanationsgiven 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 required to be registered under section 45IA ofthe Reserve Bank of India Act 1934 and the company has applied for the same receivedqueries by RBI and further process is awaited.
For Vinodchandra R Shah & Co.
Gaurav J Parekh
M. No. 140694
Date: 30th May 2017
"ANNEXURE B" TO THE AUDITORS REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013
We have audited the internal financial controls over the financial reporting of KAPILRAJ FINANCE LIMITED ("The Company") as of March 312017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to companys policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Companys internal financial controls system over financialreporting.
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.
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 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.
In our opinion 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 2017 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.
For Vinodchandra R Shah & Co.
Gaurav J Parekh
M. No. 140694
Mumbai dated 30th May 2017