To the members of M/s. Mangalam Industrial Finance Limited Report on the FinancialStatements
We have audited the accompanying financial statements of M/s. Mangalam IndustrialFinance Limitedfthe company') which comprise the Balance Sheet as at 31 "March2018 the Statement of Profit and Loss and Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.
Management Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in the 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 include maintenance of adequate accounting records in accordance withthe provision of the Act for safeguarding the assets of the company and for preventing anddetecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that arc 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 misstatements whether due to fraudor 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 including the accounting andauditing standards and the matters which are required to be included in audit report underthe provisions 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 misstatements.
An audit involves performing proeedure to obtain audit evidenee about the amounts andthe disclosures in the financial statements. The procedures selected depend on theAuditors judgment including the assessment of the risk 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 company's preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements. We believe that auditevidence wc have obtained is sufficient and appropriate to provide a basis for our auditopinion 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 required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31s1March 2018 and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ( Rs. the Order)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure-A a statement on the matters specified in the paragraph 3and 4 of the Order to the extent applicable.
2. As required by section 143(3) of the Act we report that:
a) Wc 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;
e) The Balance Sheet the Statement of Profit & 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 31"'March 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 interms of section 164(2) of the Act;
f) 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; and
g) With respect to the other matters to be included in the Auditors Report inaccordance with the Rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion and to the best of our information and according to the explanation given to us :
i. The Company does not have any pending litigations which would impacts its financialposition in its financial statements;
ii. The Company did not have any long term contracts including derivatives contractsfor which there were any material foreseeable losses; and
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For R. K. KANKARIA & CO.
Firm Reg. No. : 321093E
(R. K. KANKARIA) (Partner)
M. No. : 082796 Place : Kolkala Date : 28.05.2018
Annexure - A to the Independent Auditors Report
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements section of our report of even date)
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 of the Company are physically verified by the management atreasonable intervals and no material discrepancies were noticed on such verification. Inour opinion the periodicity of the physical verification is reasonable having regard tothe size of the Company and the nature of its assets.
(c) According to the information and explanations given to us the Company does nothave immovable property. Thus paragraph 3(i) (c) of the Order is not applicable to theCompany.
II. In respect of its Inventories:
The Company does not hold any inventory within the meaning of inventories as definedin Accounting Standard -2. Hence in our opinion Paragraph 3(ii) of the order is notapplicable to the Company.
III. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnership or other parties covered in the Register maintained underSection 189 of the Act. So in our opinion the provisions of paragraph 3(iii) (a) 3(iii)(b) and 3(iii) (c) of the Order are not applicable.
IV. The Company is a Non-Banking Financial Company and it has complied with theprovisions of section 185 & 186 of the Act to the extent applicable to the Company.
V. The Company has not accepted any deposits from the public.
VI. The Central Government has not specified maintenance of cost records under section148 (1) of the Act for any of the services rendered by the Company.
VII. In respect of statutory dues:
(a) According to the records of the Company undisputed statutory dues includingprovident fund employees state insurance income-tax sales tax service Tax dutyof customs duty of excise value added tax cess and other material statutory dues havebeen generally regularly deposited to the appropriate authorities. According to theinformation and explanations given to us no undisputed amounts payable in respect of theaforesaid dues were outstanding as on last day of the financial year concerned for aperiod of more than six months from the date they became payable.
(b) There are no dues in respect of income-tax sales-tax service tax or duty ofcustoms or duty of excise or value added tax that have not been deposited with theappropriate authorities on account of any dispute.
VIII. The Company has no dues payable to a financial institution Bank Government orto debenture-holders during the year. Accordingly the provision of paragraph 3(viii) ofthe Order is not applicable.
IX. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments)and term loan during the year. Accordingly theprovision of paragraph 3(ix) of the Order is not applicable.
X. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company or any material fraud on the Company by its officers oremployees has been noticed or reported during the course of our audit.
XI. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V of the Act.
XII. In our opinion and according to the information and explanations given to us thecompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.
XIII. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with the provision of section 177 & 188 of the Act where applicable anddetails of such transactions have been disclosed in the notes to financial statements asrequired by the applicable accounting standards.
XIII. The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.
XIV. The company has not entered into any non-cash transactions with its directors orpersons connected with him so the provisions of section 192 of the Act is not required tobe complied with.
XVI. The company is Non-Banking Financial Company and is duly registered under section45-IA of the Reserve Bank of India Act 1934.
For R. K. KANKARIA & CO.
Firm Reg. No. : 321093E
(R. K. KANKARIA)
M. No. : 082796
Place : Kolkata
Date : 28.05.2018
Annexure - B to the Independent Auditors' Report on the Financial Statements ofMangalam Industrial Finance Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
To the members of M/s. Mangalam Industrial Finance Limited
Wc have audited the internal financial controls over financial reporting of M/s.Mangalam Industrial Finance Limited("the Company") as of 31 March 2018 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
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 ("ICAI"). Theseresponsibilities include the design 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 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 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 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 auditors judgement 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 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 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 or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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.
hi 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 31 March 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.
For R. K. KANKARIA & CO.
Chartered Accountants Firm Reg. No. : 321093E
(R. K. KANKARIA)
M. No. : 082796
Place : Kolkata
Date : 28.05.2018