THE MEMBERS OF
KHEMANI DISTRIBUTORS & MARKETING LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of KHEMANIDISTRIBUTORS & MARKETING LIMITED ("the Company") which comprise the BalanceSheet as at 31st March 2017 the Statement of Profit and Loss and Cash flowstatement for the year then ended and a summary of the significant accounting policiesand other explanatory information.
Managements Responsibility for the Standalone Financial Statements
The Companys 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 and financial performance 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 of 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 wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
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 evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Companys Directors as well as evaluating theoverall presentation of the financial statements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe 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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 and its loss for the year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the financial statements:
Our opinion is not modified in respect of this matter.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors Report) Order2016 ("the Order")issued by Central Government of India in terms of sub-section (11) of section 143 of theAct we give in the Annexure-A a statement on the matters specified in paragraph 3 & 4of the Order
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 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 Company does not have any branches.
d. The Balance Sheet the 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 the aforesaid standalone financial statements comply with theAccounting Standards specified under
Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.
f. On the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in termsof Section 164 (2)of the Act.
g. With respect to the adequacy of the internal financial control 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 Auditors Report inaccordance with Rule 11 of the Companies
(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us:
1. The Company have pending litigation which is pending before Appellant Authorities.
2. The Company does not have any long-term contracts including derivative contracts; assuch the question of commenting on any material foreseeable losses thereon does not arise.
3. There has not been occasion in case of Company to transfer any sums to the InvestorEducation and Protection Fund.
4. The company had provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. These are in accordance with the books of accounts maintainedby the company.".
FOR C.P.Jaria & Co
PLACE : Surat
DATE : 14/05/2017
Annexure referred to in paragraph 1 of our report of even date to the members ofKHEMANI DISTRIBUTORS & MARKETING LIMITED on the accounts of the company for the yearended 31.03.16
On the basis of such checks as we considered appropriate and accordingly to theinformation and explanations given to us during the course of our audit we report that:
1. The company has maintained proper records showing full particulars includingquantitative details and location of all its fixed assets. During the year the managementhas physically verified all the fixed assets and no material discrepancies have beennoticed on such verification. According to the information and explanation given to us andon the basis of our examination of the records of the company company does not own anyimmovable property hence information in regards of the title deeds of immovable propertiesare not applicable.
2. As informed to us the inventory has been physically verified by the managementduring the year In our opinion the frequency of such verification is reasonable. In ouropinion the procedure for physical verification of inventory followed by management arereasonable and adequate to the size of the company and nature of its business. The companyhas maintained proper records of inventory. The discrepancies noticed if any on physicalverification between physical stocks and book records were not material in relation to theoperations of the company and have been properly dealt with in the books of account.
3. The company has granted loans secured or unsecured from companies firms or otherparties covered in the register maintained under section 189 of the Act during the year.The terms and conditions in this regard are not prejudicial to the interest of thecompany. There is no overdue outstanding at the end of the year.
4. In our opinion and according to the information and explanations given to us thecompany has compiled with the provisions of Sec 185 & 186 of the Companies Act 2013with respect to loans & Investments made. Accordingly para 3(iv) of the order is notapplicable.
5. The Company has not accepted any deposits from the public covered under section 73to 76 of the Companies Act 2013.
6. As informed to us the Central Government has not prescribed maintenance of costrecords under sub-section (1) of Section 148 of the Act.
7. (a) According to the information and explanations given to us and on basis of ourexamination of the books of accounts the company has been generally regular in depositingundisputed statutory dues including Provident fund Employees state insuranceIncome Tax sales Tax Wealth Tax Service Tax Custom Duty Excise Duty cess and otherstatutory dues as applicable with the appropriate authorities in India;
(b) According to information and explanations given to us and based on the records ofthe company examined by us there are no dues of Wealth tax Service Tax Sales taxCustom Duty and excise duty which have not been deposited on account of any disputes. Thedisputed income tax liability is pending before Appellate Authorities;
8. Based on our audit procedure and on the information and explanations given by themanagement we are of the opinion that the company has not defaulted in repayment of duesto financial institution or Bank.
9. According to the information and explanations given to us the company have notraised money by way of IPO during the year.
10. According to the information and explanations given to us no fraud on or by thecompany has been noticed or reported during the period.
11. According to the information and explanations given to us and based on ourexamination of the records of the company The company had paid/provided managerialremuneration in accordance with the provisions of Companies Act 2013.
12. In our opinion and according to the information and explanations given to us Thecompany is not a
13. According to the information and explanations given to us all the transaction withrelated parties are in accordance with the provisions of Companies Act 2013. All detailshave been disclosed in financial Statements.
14. According to the information and explanations given to us and based on ourexamination of the records of the company had not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.
15. According to the information and explanations given to us and based on ourexamination of the records of the company The company has not entered into non-cashtransaction with directors or persons connected with him.
16. The Company is not required to be registered under section 45-IA of the RBI Act1934.
FOR C.P.Jaria & Co
PLACE : Surat
DATE : 15/05/2017
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 ("the Act")
We have audited the internal financial controls over financial reporting of M/S KHEMANIDISTRIBUTORS & MARKETING LIMITED ("the Company") as on 31st March2017 in conjunction with our audit of the financial statements of the Company for the yearended on that date.
MANAGEMENT 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 (ICAI). Theseresponsibilities include the designs implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to companys policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys 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 FinancialControlling(the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143 (10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls-both applicable to an audit oInternal 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 responsible assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reporting assessing the risk that a material weakness exists testing and evaluating and design andoperating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors 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 Companys internal financial controlssystem over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and disposition of the assets of the Company. (2) provide reasonableassurance that transaction are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 unauthorised acquisition use or disposition of thecompanys 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 internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree 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 31st March 2017based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
FOR C.P.Jaria & Co
PLACE : Surat
DATE : 14/05/2017