To The Members of R. J. Shah & Company Limited
Report on the Financial Statements
1. We have audited the accompanying standalone financial statements of R. J.Shah &Company Limited ("the Company') which comprise the Balance Sheet as at March 312017 and the Statement of Profit and Loss and Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
2. 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 Rule7 of the Companies (Accounts) rules2014. This responsibility also includes maintenance of adequate accounting records inaccordance with 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 are reasonable and prudent anddesign implementation and maintenance of adequate internal financial that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.
3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
4. 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 thereunder.
5. 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.
6. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal finance control relevant tg the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
7. 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 profit and its cash flows for the year ended onthat date.
Report on Other Legal and Regulatory Requirements
8. As required by 'the Companies (Auditor's Report) Order 2016' issued by the CentralGovernment of India in terms of sub section (11) of section 143 of the Act (hereinafterreferred to as "order") and on the basis of such checks of the books andrecords of the Company as we considered appropriate and according to the information andexplanations given to us we give in the Annexure-A statement on the matters specified inparagraph 3 and 4 of the order.
9. 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 accounts as required by law have been kept by thecompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
d) In our opinion the afore said standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies(Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on31" March 2017 taken on record by the board of directors none of the directors isdisqualified as on 31" March 2017 from being appointed as a director in terms ofsection 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the company and operating effectiveness of such controls refer to ourseparate report in Annexure B".
g) With respect to the other matters to be included in the Auditor's report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 in our opinionand to the best of our information and according to the explanations given to us:
1) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements refer to Note no. 14.2 & Note no.26 to thefinancial statements.
2) The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable tosses.
3) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the company.
4) The Company has 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. Based on audit procedure and relying on managementrepresentation we report that disclosure are in accordance with the books of accountsmaintained by the Company and as produced to us by the management.
For N.S.Bhatt and Associates
Firm Registration No:130891W
Date: 15" May 2017
Annexure A to the Auditors' Report
Referred to in paragraph 9 of the Independent's Auditor Report of even date to themembers of R. J. Shah & Company Limited on the standalone financial statements as ofand for the year ended March 312017
I a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets except that of Furniture and Fixtureand scientific Apparatus.
b) A major portion of the fixed assets have been physically verified by the managementduring the year. In our opinion the frequency of verification of the fixed assets by themanagement is reasonable having regards to size of the company and the nature of itsassets. As reported by the management no material discrepancies were noticed on suchverifications.
c) As per the information and explanations given to us the Title Deeds of ImmovableProperties are held in the name of company.
II The Inventory has been physically verified by the management at reasonable intervalsduring the year and as per the information and explanations given to us and according tothe records produced to us no material discrepancies noticed on such physicalverification as compared to book records.
III As per the information and explanations given to us the Company has not grantedany loans secured or unsecured to any Companies firms or other parties covered in theregister maintained under section 189 of the Companies Act 2013..
IV As per the information and explanations given to us the company has complied withthe provisions of section 185 and 186 of the Companies Act 2013 wherever is applicable.
V The Company has not accepted any deposits from public within the meaning of section73 and 74 of the Act and the rules framed thereunder to the extent notified.
VI As per the information and explanations given by the management the CentralGovernment has not prescribed for the maintenance of Cost records under section 148(1) ofthe Companies Act 2013 therefore the provision under this clause are not applicable tothe Company.
VII a) As per the information and explanations given to us and records of the companyexamined by us in our opinion the Company is regular in depositing the undisputedstatutory dues including Provident Fund Employees State Insurance Income Tax Sales TaxWealth Tax Service Tax Custom Duty and Other Statutory dues applicable to it with theappropriate authorities.
b) According to the information and explanations given to us there are no dues ofIncome Tax Wealth Tax Sales Tax Service Tax Custom Duty and Cess which has not beendeposited on account of any dispute.
VIII In our opinion and according to information and explanations given to us thecompany has not defaulted in the repayment of dues to financial institutions banks anddebentures holders at the balance sheet date.
IX The Company has not raised any money by way of Initial Public Offer or FurtherPublic Offer (including debt instruments) and term loans during the year.
X To the best of our knowledge and beliefs and according to the information andexplanations given to us no fraud by the company or any fraud on the company by itsofficers or employees has been noticed or reported during the year under review.
XI To the best of our knowledge and beliefs and according to the information andexplanations given to us the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith schedule V to the Companies Act 2013.
XII The Company is not a Nidhi Company as per the provisions of section 406 of theCompanies Act 2013.
XIII As per the information and explanations given to us all the transactions with therelated parties are in compliance with section 177 and 188 of the Companies Act 2013 andthe details have been disclosed in the note no.32 on financial statements as required bythe applicable accounting standards.
XIV The Company has not made any preferential allotment or private placement of sharesor hilly or partly convertible debentures during the year under review.
XV As per the information and explanations given to us the company has not entered intoany non cash transactions with directors or person connected with him.
XVI As per the information and the examination of the financial statements the companyis not required to be register under section 45-1A of the Reserve Bank of India Act 1934.
For N.S.Bhatt and Associates
Firm Registration No:130891W
Membership No.: 010149
Date: 15th May 2017
Annexure B to the Auditors' Report
Referred to in paragraph 10 (f) of the Independent's Auditor Report of even date to themembers of R. J. Shah & Company Limited on the standalone financial statements as ofand for the year ended March 312017
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 RJ.Shah& Co. Limited ("the Company") as of 31 March 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
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'). 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') 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 ethical requirements and planand 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 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 auditor's 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 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 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 31 March 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 N.S.Bhatt and Associates
Firm Registration No:130891W
Membership No.: 010149
Date: 15th May 2017