To the Members Of
Shreenath Investment Company Limited Report on the Financial Statements
1. We have audited the accompanying financial statements of Shreenath InvestmentCompany Limited ("the Company") which comprise the Balance Sheet as at March31 2017 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 Financial Statements
2. The Company's Management and Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the Provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
3. Our responsibility is to express an opinion on these financial statements based onour audit.
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.
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
4. 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 financial control relevant to 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 Management and Board of Directors as well as evaluatingthe overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements of the Company.
6. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statement gives 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 March31 2017 and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
7. 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 Act we give in the "Annexure A" statement on the matters Specified inparagraphs 3 and 4 of the Order.
8. 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 appears from our examination of those books;
c) The Balance Sheet Statement of Profit and Loss and the Cash Flow Statement dealtwith by this report are in agreement with the books of account;
d) In our opinion the Balance Sheet Statement of Profit and Loss and the Cash FlowStatement comply with the Accounting Standards specified under section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014;
e) On the basis of the written representations received from the directors as on March31 2017 and taken on record by the Board of Directors we report that none of thedirectors is disqualified as on March 31 2017 from being appointed as a director in termsof sub-section (2)of Section 164 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"
9. In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014:
a) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer note 14.4 to the Financial Statements;
b) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses. - Refer Note 14.5 to the financialstatements;
c) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
d) The Company did not have any holdings or dealings in Specified Bank Notes during theperiod from November 08 2016 to December 30 2016- Refer Note no. 14.9 to the financialstatements.
For Khimji Kunverji & Co
Chartered Accountants Firm Registration No. 105146W
Partner (M. No. 139585)
Place: Mumbai Date: May 30 2017
Annexure A referred to in paragraph 7 of our report of even date
i. a. The Company has maintained proper records showing particulars includingquantitative details and
situation of fixed assets.
b. According to the information and explanations given to us the Company hasphysically verified its fixed assets which in our opinion is reasonable having regards tothe size of the Company and the nature of its assets. As informed no materialdiscrepancies were observed during the physical verification.
c. According to the information and explanations given to us and on the basis of ourexamination of
the record of the Company the title deeds of immovable properties are held in the nameof the Company.
ii. The Company did not hold inventory during the year and hence Clauses 3(ii) of theOrder is not applicable to the Company.
iii. According to the information and explanations given to us the Company has notgiven any loans secured or unsecured to companies firm or other parties covered in theregister maintained under section 189 of the Act. Hence clauses 3(iii) (a) (b) and (c)of the Order are not applicable to the Company
iv. According to the information and explanations given to us and based on theexamination of records of the company provisions of section 185 and 186 of the CompaniesAct 2013 in respect of loans to directors including entities in which they are interestedand in respect of loans and advances given investments made and guarantees andsecurities given have been complied with by the Company.
v. The Company has not accepted any deposits hence requirement of compliance with theprovisions of Section 73 to 76 or any other relevant provisions of the Act and theCompanies (Acceptance of Deposits) Rules 2014 are not applicable to the Company.
vi. According to the information and explanations given to us the Company is notrequired to maintain Cost Records under sub section (1) of Section 148 of the Act.
vii. a. According to the information and explanations given to us and based on theexamination of the
records the Company is regular in depositing with appropriate authorities undisputedstatutory dues including Income Tax Service Tax and other material Statutory Duesapplicable to it. There were no arrears as at March 31 2017 for a period of more than sixmonths from the date they became payable.
As informed sales Tax provident fund employees' state insurance duty of customduty of excise value added tax and cess are not applicable to Company.
b. According to the information and explanations given to us there are no dues ofincome tax and service tax which have not been deposited on account of any dispute.
As informed statutory dues in the nature of sales tax duty of custom duty of excisevalue added tax and cess are not applicable to the Company
viii. According to the information and explanations given to us the Company hasneither taken loans from financial institutions government and banks nor the Company hasissued any debentures hence clause 3(viii) of the Order is not applicable to the Company.
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IX. According to the information and explanations given to us the Company has notraised any money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Hence the provision of clause 3(ix) of theOrder is not applicable.
x. During the course of our examination of the books and records of the companycarried in accordance with the auditing standards generally accepted in India we haveneither come across any instance of fraud by the Company or on the Company by its officersor employees noticed or reported during the course of our audit nor have we been informedof any such instance by the Management.
xi. According to the information and explanations given to us the managerialremuneration has been paid / provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to the Act.
xii. According to the information and explanations given to us the Company is not aNidhi company. Hence clause 3(xii) of the Order is not applicable.
xiii. According to the information and explanations to us transactions with therelated parties are in compliance with section 177 and 188 of the Act where applicable andthe details have been disclosed in the notes to the financial statements as required bythe applicable accounting standards.
xiv. According to the information and explanations to us the Company has not made anypreferential allotment / private placement of shares or fully or partly convertibledebentures during the year under review Hence clauses 3(xiv) of the Order is notapplicable to the Company
xv. According to the records of the Company examined in course of our audit and as perthe information and explanations given to us the Company has not entered in any non-cashtransactions with directors or persons connected with them. Hence provisions of Section192 are not applicable to the Company
xvi. As informed the Company is registered as sub broker under Securities and Exchangeboard of India (Stock Broker and Sub-Broker) Regulation 1992. Hence Clause 3(xvi) of theorder is not applicable to the Company.
For Khimji Kunverji & Co
Firm Registration No. 105146W
Partner (M. No. 139585)
Date: May 30 2017
Annexure B referred to in paragraph 8(f) of Our Report of even date
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 ShreenathInvestment Company Limited ("the Company") as of March 31 2017 in conjunctionwith our audit of 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 Reporting('the Guidance Note') issued by the Institute of Chartered Accountants of India ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information as required under the Act
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 and the Standards on Auditing issued by ICAI and deemed to beprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects
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 in 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
Internal financial control over financial reporting is a process designed by theCompany 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 Company's 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 dispositions of the assets of the Company (2) provide reasonableassurance that transactions 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 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 or for otherreasons
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 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 Khimji Kunverji & Co
Chartered Accountants Firm Registration No. 105146W
Partner (M. No. 139585)
Date : May 30 2017