TO THE MEMBERS OF
MUNOTH FINANCIAL SERVICES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of MUNOTH FINANCIAL SERVICESLIMITED which comprise the Balance Sheet as at March 31 2017 and the Statement ofProfit and Loss and Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Management and Board of Directors of the Company are responsible for the mattersstated in Section 134(5) of the Companies Act 2013 (the act') with respect to thepreparation of these 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 Companies (Accounts) Rules2014.
This responsibility includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; design implementation and maintenance of adequate internal financial controlsthat are operating effectively for ensuring the accuracy and completeness of theaccounting 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 and the Order under section 143 (11)of the Act.
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 performingprocedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances.
An audit also includes evaluating the appropriateness of the accounting policies usedand the reasonableness of the accounting estimates made by the Company's management andBoard of Directors as well as evaluating the overall presentation of the financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
Basis for Qualified Opinion
The company has not provided for a provision of Rs. 21399831- being the diminutionin the market value of Quoted Investments held by the Company.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India: i. In the case of the balance sheet of the stateof affairs of the Company as at 31 March 2017; ii. In the case of the statement of profitand loss of the loss for the year ended on that date; and iii. In the case of thecash flow statement of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by section 143(3) of the Act we further report that: a. We have soughtand obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit; b. In our opinion proper books ofaccount as required by law have been kept by the Company so far as appears from ourexamination of those books except for the effects of the matter described in the Basisfor Qualified Opinion paragraph above kept by the Company so far as it appears from ourexamination of those books. c. The Balance Sheet & Statement of Profit and Loss dealtwith by this Report are in agreement with the books of account; d. In our opinion theaforesaid financial statements comply with the applicable Accounting Standards specifiedunder 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 31 2017and taken 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 adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting. g. With respect to the other matters to be included inthe Auditor's 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 does not have any pending litigation which wouldimpact its financial position.
(ii) The Company did not have any long-term contracts including derivative contracts;as such the question of commenting on any material foreseeable losses thereon does notarise.
(iii) There has not been an occasion in case of the Company during the year underreport to transfer any sums to the Investor Education and Protection Fund. The question ofdelay in transferring such sums does not arise.
(iv) The Company has provided requisite disclosures in its financial statement as toholdings as well as dealings in Specified Bank Notes during the Period from 8th November2016 to 30th December 2016 and these are in accordance with the books of accountsmaintained by the Company. Refer notes to Financial Statements
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in "AnnexureB" a statement on the matters specified in paragraphs 3 and 4 of the Order.
For Mardia & Associates
Firm's registration number: 007888S
Membership number: 205307
|Place ||Chennai |
|Date ||23/05/2017 |
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph f under Report on Other Legal and RegulatoryRequirements' of our report of even date) Report on the Internal Financial Controls OverFinancial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act2013 ("the Act")
We have audited the internal financial controls over financial reporting of MUNOTHFINANCIAL SERVICES LIMITED ("the Company") as of March 31 2017 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 controlstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India". 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 company's policies the safeguarding ofits 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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 whether a risk of material weakness exists testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's 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 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 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 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 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2017 based on "the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India".
For Mardia & Associates
Firm's registration number: 007888S
Membership number: 205307
Place : Chennai Date : 23/05/2017
ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:
(i) In respect of Fixed Assets :
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets ; (b) As explained to us fixedassets have been physically verified by the management at regular intervals; as informedto us no material discrepancies were noticed on such verification; (c) The Companyhas title deeds of immovable properties held in the name of the company.
(ii) The nature of business of the company is such that it is not required to maintaininventory and therefore the Clause 3 (ii) of the Order are not applicable to the Companyand hence not commented upon.
(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Act 2013.
Accordingly the provision of the Clause 3 (iii) (a) to (c) of the Order are notapplicable to the Company and hence not commented upon.
(iv) The Company has not made investments or provided guarantees or granted loans andsecurity that would require the compliance of provisions of Sec 185 and Sec 186 of TheAct. Accordingly the provisions of Clause (iv) of paragraph 3 of the Order are notapplicable to the Company.
(v) The Company has not accepted any deposits from the public and hence the directiveissued by the Reserve Bank of India and the provisions of Section 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable to the Company.
(vi) As informed to us the Central Government has not prescribed maintenance of costrecords under subsection (1) of Section 148 of the Act in respect of activities carriedon by the Company.
(vii) According to the information and explanations given to us in respect of statutorydues and on the basis of our examination of books and records:
(a) The company has generally been regular in depositing the undisputed statutorydues including Provident Fund Employees' State Insurance Income-tax Sales-tax WealthTax Service Tax Custom Duty Excise Duty and other material statutory dues asapplicable with the appropriate authorities in India.
(b) There were no undisputed amounts payable in respect of Provident FundEmployees' State Insurance Income-tax Sales Tax Service Tax Customs Duty Excise DutyValue Added Tax cess and other material statutory dues in arrears as at March 31 2017for a period of more than six months from the date they became payable.
(c) According to the information and explanations given to us and based on therecords of the company examined by us there are no dues of Income Tax Wealth TaxService Tax Sales Tax Customs Duty and Excise Duty which have not been deposited onaccount of any disputes .
(viii) According to the records of the company examined by us and as per theinformation and explanations given to us the company has not defaulted in repayment ofany loan either from Financial Institutions Bank or from the government and has notissued any debentures.
(ix) In our opinion and according to the information and explanations given to us thecompany has not raised money by way of initial public offer/ further public offer(including debt instruments) or raised any term loans and hence reporting under Clause 3(ix) of the Order is not applicable to the Company and hence not commented upon.
(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or the Company by its officers or employees has beennoticed or reported during the year.
(xi) Managerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule V to the CompaniesAct.
(xii) The Company is not a Nidhi Company and hence reporting under clause 3 (xii) ofthe CARO 2016 is not applicable
(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 188 and 177 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.
(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him. Accordingly the provisions of Clause 3 (xv) ofthe Order are not applicable to the Company.
(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 and hence the provisions of Clause 3 (xvi) of the Order are notapplicable to the Company.
|For Mardia & Associates |
|Chartered Accountants |
|Firm's registration number: 007888S |
|(Manish Mardia) |
|Membership number: 205307 |
|Place ||Chennai |
|Date ||23/05/2017 |