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Karnavati Finance Ltd.

BSE: 538928 Sector: Financials
NSE: N.A. ISIN Code: INE554R01012
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NSE 05:30 | 01 Jan Karnavati Finance Ltd
OPEN 25.00
PREVIOUS CLOSE 25.00
VOLUME 40
52-Week high 32.00
52-Week low 22.60
P/E 38.46
Mkt Cap.(Rs cr) 25
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 25.00
CLOSE 25.00
VOLUME 40
52-Week high 32.00
52-Week low 22.60
P/E 38.46
Mkt Cap.(Rs cr) 25
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Karnavati Finance Ltd. (KARNAVATIFIN) - Auditors Report

Company auditors report

To the members of Karnavati Finance Limited Report on the financial statements

We have audited the accompanying financial statements of Karnavati Finance Limited (the"Company") which comprise the Balance sheet as at March 31 2018 and theStatement of Profit and Loss for the period then ended the Cash flow Statement for theyear ended March 31 2018 and a summary of significant accounting policies and otherexplanatory 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 standalone financial statements that give a true and fair view of the financialposition financial performance 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 read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the Accountingand Auditing Standards and matters which are required to be included in the Audit Reportunder the provisions of the Act and the Rules made there under. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement. An audit involves performing procedures to obtain audit evidenceabout the amounts and the disclosures in the financial statements. The procedures selecteddepend on the Auditor's 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 theCompany's preparation of the financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances but not for thepurpose of expressing an opinion on whether the Company has in place an adequate internalfinancial controls system over financial reporting and the operating effectiveness of suchcontrols. An audit also includes evaluating the appropriateness of the accounting policiesused and the reasonableness of the accounting estimates made by the Company's Directorsas well as evaluating the overall presentation of the financial statements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the said financial statements give the information required by the CompaniesAct 2013 in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India: (a) In the case of Balance sheet ofthe State of Affairs of the Company as at March 31 2018; and (b) In the case of Statementof profit and loss of the Profit for the Year ended on March 31 2018; and (c) Its cashflow statement for the year ended March 31 2018.

Emphasis of Matters

Nil

Report on other Legal and Regulatory Requirements

(1) As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central

Government of India in terms of sub-section (11) of section 143 of the Companies Act2013 we give in the Annexure 1 statement on the matters specified in paragraphs 3 and 4of the order to the extent applicable. (2) As required by Section 143(3) of the Act wereport that: a) We have obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit; b) In ouropinion proper books of account as required by law have been kept by the Company so faras appears from our examination of the books of account; c) Company's Branches are auditedby us; d) The Balance Sheet and Statement of Profit and Loss and Cash Flow statement dealtwith by this report are in agreement with the books of account; e) In our opinion thebalance sheet and statement of profit and loss and Cash Flow Statement dealt with by thisreport comply with the accounting standards referred to in section 133 of the Act readwith rule 7 of Companies (Accounts) Rules 2014; and f) In our opinion the comments orobservations don't have any adverse effect on functioning of the company. g) On the basisof written representations received from the directors as at March 31st 2018and taken on record by the Board of Directors we report that none of the directors isdisqualified as at March 31st 2018 from being appointed as a director interms of subsection (2) of section 164 of the Companies Act 2013. h) With respect to theadequacy of the internal financial controls over financial reporting of the

Company and operating effectiveness of such controls refer to our separate Report in"Annexure 2" to this report. i) With respect to the matters to be included inthe Auditor' Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us: i. The Company has no pending litigations affecting itsfinancial statements and hence no disclosure in its financial statements. ii. The Companyhas not entered into any long-term contracts including derivative contracts requiringprovision under applicable laws or accounting standards for material foreseeable losses.iii. There is no amounts which required to be transferred to the Investor Education and

Protection Fund by the Company.

FOR DOSHI MARU & ASSOCIATES
(Chartered Accountants)
Reg No. :112187W
HIREN JAYANTILAL MARU
Date : 28th May2018 Partner
Place : Mumbai M.No. : 115279

Annexure 1 to the Independent Auditor's Report of even date on financial statements ofKarnavati

Finance Limited i. (a)The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets. (b) The fixedassets of the company have been physically verified by the management during the year andno material discrepancies between the book records and the physical inventory have beennoticed. In our opinion the frequency of verification is reasonable. (c) The title deedof immovable property is held in the name of the company. ii. The Company has no inventoryand hence Para 3 (ii) of the Companies (Auditors Report) order 2016 is not applicable tothe Company. iii. According to the information and explanations given to us the companyhas not granted 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. iv. According to the information and explanations given to us thecompany has not granted any loans investments guarantees and security covered under theprovisions of section 185 and 186 of the Companies Act 2013 and hence this clause is notapplicable to the company. v. According to the information and explanations given to usthe Company has not accepted any deposits from the public to which the directives issuedby the Reserve Bank of India and the provisions of Section 73 to Section 76 or any otherrelevant provisions of the Act and the rules framed there under apply vi. The CentralGovernment of India has not prescribed the maintenance of cost records under subsection(1) of Section 148 of the Act for any services rendered by the company. vii. (a) Accordingto the information and explanations given to us the Company has been regular indepositing undisputed statutory dues. (b) According to the information and explanationsgiven to us there are no dues outstanding of income tax sales tax customs duty servicetax excise duty cess and goods and service tax on account of any dispute. viii.TheCompany has not defaulted in repayment of loans or borrowing to a financial institutionsor banks. ix. Managerial Remuneration had been paid by the company during the year inaccordance with the requisite approvals mandated by the provisions of section 197 readwith schedule V to Companies Act. x. All the transactions with the related parties are incompliance with sections 177 and 188 of

Companies Act 2013 and the details have been disclosed in financial statements asrequired by the applicable accounting standards. xi. The company has not entered into anynon-cash transactions with Directors or persons connected with them. xii. In our opinionthe company is Non-Banking Finance Company registered under section 451A of the

Reserve Bank of India Act 1934 vide certificate of registration no. 13.00064 datedFebruary 24 1998.

FOR DOSHI MARU & ASSOCIATES
(Chartered Accountants)
Reg No. :112187W
HIREN JAYANTILAL MARU
Date : 28th May2018 Partner
Place : Mumbai M.No. : 115279

Annexure 2 to The Independent Auditor's Report Of Even Date On The Financial Statementsof

Karnavati Finance Limited

Report on the Internal Financial Controls under Clause (i) of Sub Section 3 of section143 of the

Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of KarnavatiFinance Limited ("the company") as of 31st March 2018 in conjunctionwith our Audit of the standalone financial statements of the company for the period 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies 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.

Auditors' 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 deemed to beprescribed under section 143 (10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India ThoseStandards and the Guidance Note require that we comply with the ethical requirements andplan and 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 performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on theCompany's internal financial controls system over 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 authorizations of management and directors of the company and (3) providereasonable assurance regarding prevention or timely detection of unauthorized acquisitionuse or disposition of the company's assets that could have a material effect on thefinancial 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 controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance may with the policies or procedures may deteriorate.

Opinion

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 31st March 2018based on the internal financial control over financial reporting criteria established bythe Company considering the essential components of internal control stated in theGuidance note on Audit of Internal Financial Controls Over Financial Reporting issued byInstitute of Chartered Accountants of India.

FOR DOSHI MARU & ASSOCIATES
(Chartered Accountants)
Reg No. :112187W
HIREN JAYANTILAL MARU
Date : 28th May2018 Partner
Place : Mumbai M.No. : 115279

AUDITORS' REPORT

Pursuant to Non Banking Financial Companies Auditor's Report (Reserve Bank) Direction2016 To The Board of Directors Karnavati Finance Limited Mumbai.

We have audited the Balance Sheet of Karnavati Finance Limited as at 31stMarch 2018 and the annexed statement of Profit and Loss of the Company for the periodended on that date and report that: 1. Pursuant to the Non - Banking Financial CompaniesAuditor's Report (Reserve Bank) Directions 2008 issued by Reserve Bank of India and onthe basis of books and records of KARNAVATI FINANCE LIMITED and the information providedto us during the course of audit we place our observations on the matters specified inParagraph 3 and 4 of the aforementioned directions. A. Since the Company is a NBFCCompany it has been register as Non-Banking Finance Company (NBFC) under Section 45 IA ofReserve Bank of India Act 1934. B. i. The Company has accepted deposits from itsshareholders only and in compliance with the provisions and the directions circulars andguidelines issued by the Central Government from time to time as applicable to a NBFCcompany. ii. The Company is not an Asset Finance Company or an Investment Company or Loancompany and has not approached any credit rating agency for rating their deposits. iii.The Company being an NBFC not covered under clause (iii) of Paragraph 3 of the directionsreporting under clause (ii) doesn't arise. iv. Net Owned funds of the Company is notexcess of Rs. 200 Lakhs hence reporting under this clause is not applicable to theCompany. v. The Company has complied with the Prudential Norms on income recognitionasset classification as provided. The provisions of prudential norms on incomerecognition accounting standards asset classification provisioning for bad &doubtful debts and concentration of credit / investments as specified in the directionsissued by the Reserve Bank of India in terms of the Non- Banking Financial (DepositAccepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007 are notapplicable to the Company. vi. The capital adequacy ratio requirement in the terms of theNon-Banking Financial (Deposit

Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007 is notapplicable to the Company. vii. The Company being a NBFC is required to submit return ondeposits in Form NBS-9. viii. Submission of Yearly return on prudential norms as specifiedin Non Banking Financial (Deposit

Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007 isapplicable to the Company. ix. The Company has not opened any branches / offices nor hasappointed any agents during the period under review.

FOR DOSHI MARU & ASSOCIATES
(Chartered Accountants)
Reg No. :112187W
HIREN JAYANTILAL MARU
Date : 28th May2018 Partner
Place : Mumbai M.No. : 115279