To the Members of M/S RAJATH FINANCE LTD.
We have audited the financial statements of M/S RAJATH FINANCE LTD. ("theCompany") which comprise the balance sheet as at 31st March 2019 and the statementof Profit and Loss and statement of cash flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.
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 31stMarch 2019 its profit/loss and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
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 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. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.As part of an audit in accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure A' a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
2. 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 ouropinion proper books of account as required by law have been kept by the Company so faras 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 opinionthe aforesaid financial statements comply with the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. e) Onthe basis of the written representations received from the directors as on 31st March2019 taken on record by the Board of Directors none of the directors is disqualified ason 31st March 2019 from being appointed as a director in terms of Section 164 (2) of theAct. f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure B'. g) With respect to the other matters tobe included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us: i. The Company does not have any pending litigations whichwould impact its financial position. ii. The Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses. iii.There were no amounts which were required to be transferred to the Investor Education and
Protection Fund by the Company.
| || ||For S A D P AND CO |
| || ||Chartered Accountants |
| ||FRN: 112625W || |
|Place:-Rajkot || ||PARAG GUNVANTRAI BHUPTANI |
|Date: 30/05/2019 ||(PARTNER) || |
| ||Membership No. ||122330 |
The Annexure referred to in paragraph 1 of Our Report on "Other Legal andRegulatory Requirements".
We report that:
i. a. The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets. b. As explained to us fixedassets have been physically verified by the management at reasonable intervals; nomaterial discrepancies were noticed on such verification. c. The title deeds of immovableproperties are held in the name of the company.
ii. As explained to us inventories have been physically verified during the year bythe management at reasonable intervals. No material discrepancy was noticed on physicalverification of stocks by the management as compared to book records. iii. According tothe information and explanations given to us and on the basis of our examination of thebooks of account the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties listed in the registermaintained under Section 189 of the Companies Act 2013. Consequently the provisions ofclauses iii (a) (b) and (c)of the order are not applicable to the Company. iv. In respectof loans investments guarantees and security provisions of section 185 and 186 of theCompanies Act 2013 have been complied with. v. The company has not accepted any depositsfrom the public covered under sections 73 to 76 of the Companies Act 2013. vi. As perinformation & explanation given by the management maintenance of cost records has notbeen specified by the Central Government under sub-section (1) of section 148 of theCompanies Act 2013. vii. a. According to the records of the company undisputed statutorydues including Provident
Fund Investor Education and Protection Fund Employees' State Insurance Income-taxSales-tax Service Tax Custom Duty Excise Duty value added tax cess and any otherstatutory dues to the extent applicable have generally been regularly deposited with theappropriate authorities. According to the information and explanations given to us therewere no outstanding statutory dues as on 31st of March 2019 for a period of more than sixmonths from the date they became payable.
b. According to the information and explanations given to us there is no amountpayable in respect of income tax service tax sales tax customs duty excise duty valueadded tax and cess whichever applicable which have not been deposited on account of anydisputes.
viii. In our opinion and according to the information and explanations given by themanagement we are of the opinion that the Company has not defaulted in repayment of duesto a financial institution bank Government or debenture holders as applicable to thecompany. ix. Based on our audit procedures and according to the information given by themanagement the money raised by way of initial public offer or further public offer(including debt instruments) and term loans have been applied for the purpose for whichthey were obtained. x. According to the information and explanations given to us wereport that no fraud by the company or any fraud on the Company by its officers oremployees has been noticed or reported during the year. xi. According to the informationand explanations given to us we report that managerial remuneration has been paid inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act. xii. The company is not a Nidhi Company. Thereforeclause (xii) of the order is not applicable to the company. xiii. According to theinformation and explanations given to us all transactions with the related parties are incompliance with sections 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the Financial Statements etc. as required by the applicableaccounting standards. xiv. The company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. xv. The company has not entered into non-cash transactions with directors orpersons connected with him. xvi. The company is required to be registered under section45-IA of the Reserve Bank of India Act 1934 and the registration has been obtained.
| ||For S A D P AND CO |
| ||Chartered Accountants |
| ||FRN: 112625W |
|Place:-Rajkot ||PARAG GUNVANTRAI BHUPTANI |
|Date: 30/05/2019 ||(PARTNER) |
| ||Membership No. 122330 |
Report on Internal Financial Controls with reference to financial statements
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 RAJATHFINANCE LTD. ("the Company") as of March 31 2019 in conjunction with our auditof the financial statements of the Company for the year ended on 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company; 2. providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and 3. provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
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 March 31 2019 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 S A D P AND CO |
| || ||Chartered Accountants |
| ||FRN: 112625W || |
|Place:-Rajkot ||PARAG GUNVANTRAI BHUPTANI || |
|Date: 30/05/2019 ||(PARTNER) || |
| ||Membership No. ||122330 |