TO THE MEMBERS OF SMART FINSEC LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of SMART FINSEC LIMITED("the company") which comprise the Balance Sheet as at 31 March 2017 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
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 preparationand presentation 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 the maintenance of adequate accountingrecords in accordance with the provision of the Act for safeguarding of the assets of theCompany and for preventing and detecting the frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial control 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.
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 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.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and operating effectiveness of such controls . An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by Company's Directors as well as evaluating the overallpresentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion 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:
a) In thecase of the Balance Sheet of the state of affairs of the Company as at31stMarch 2017
b) In the case of the statement of Profit and Loss of the profit for the year ended onthat date; and
c) In the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2015("the Order")issued by the Central
Government of India in terms of sub-section (ll) of section 143 of the Act we give inthe Annexure 'A'
a statement on the matters Specified in paragraphs 3 and 4 of the Order to the extentapplicable.
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 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.
c) the Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith 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 March2017 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2017 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate in Annexure 'B' and
g) 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:
i. The Company does not have any pending litigations which would impact its financialposition.
ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses.
iii. There were no amounts which required to be transferred by the Company to theInvestor Education and Protection Fund.
iv. The company has provided requisite disclosures in its financial statements as toholdings as well as dealings in the Specified Bank Notes during the period from 8November 2016 to 30 December 2016 and these are in accordance with the books of accountsmaintained by the Company. For the same Note No. 24 (III) to the financial statements canbe referred.
For A. Mohan & Company
Place: New Delhi
Annexure 'A' to the Independent Auditors' Report
The annexure referred to our Independent Auditors' Report to the members of the companyon the standalone financial statements for the year ended 31.03.2017 we report that:
On the basis of such checks as we considered appropriate and in terms of informationand explanations given to us we state that:-
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets.
(b) As explained to us fixed assets have been physically verified by the managementduring the year in accordance with the phased programme of verification adopted by themanagement which in our opinion provides for physical verification of all the fixedassets at reasonable intervals. According to the information and explanations given to usno material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records shownthe title deeds of immovable property owned by the company are in the name of companyonly.
(ii) In respect of its inventory:
a) As explained to us company is into the business of investing and trading in shares& Bonds and its inventory consist of Listed Shares. The inventory is verifiedelectronically by the management during the year.
b) The procedures of electronic verification of inventories followed by the managementare reasonable and adequate in relation to the size of the company and the nature of itsbusiness.
c) The company is maintaining proper records of Inventory. No discrepancies werenoticed on such verification between the electronically maintained stocks and the bookrecords.
(iii) In respect of loans secured or unsecured granted to the parties covered inregister maintained under section 189 of the Companies Act 2013:
(a) According to the information and explanations given to us the Company has notgranted any loans to companies firms or other parties covered in the Register maintainedunder Section 189 of the Companies Act 2013; and therefore paragraph 3(iii) of the Orderis not applicable.
(iv) According to the information and explanations given to us the Company does nothave any loans investments guarantees and security referred to in Section 185 and 186of the Companies Act 2013. Accordingly paragraph 3(iv) of the order in not applicable.
(v) The company has not received any public deposits during the year and therefore thisparagraph of the Order is not applicable.
(vi) The Cost records are not prescribed by the central Government under sub section(1) of section 148 of the Companies Act 2013.
(vii) (a) According to the records information and explanations provided to us theCompany is generally regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income tax salestax service tax duty of customs duty of excise value added tax cess and othermaterial statutory dues as applicable to it and no undisputed amounts payable wereoutstanding as at March 31st2017 for a period of more than six months from the date theybecame payable.
(b) According to the information and explanation given to us there are no disputeddues in respect of income tax sales-tax service tax duty of customs duty of excise andvalue added tax which have not been deposited with appropriate authorities.
(viii) In our opinion and according to the information and explanations given to usthere were no dues repayable to government financial institutions banks and debentureholders.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.
(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
(xi) According to the information and explanations give 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 to 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 sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statement as required by the applicableaccounting standards.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has made preferential allotment ofNon convertible cumulative Redeemable Preference Shares during the year. The requirementof Section 42 of the Companies act 2013 have been complied with and the funds were usedfor the purpose for which it was raised.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The company is required to be registered under section 45-IA of the Reserve Bankof India Act 1934 and is Registered vide Registration No. B-14.00691.
For A. Mohan & Company
Place: New Delhi