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SPA Capital Services Ltd.

BSE: 542376 Sector: Financials
NSE: N.A. ISIN Code: INE726X01014
BSE 05:30 | 01 Jan SPA Capital Services Ltd
NSE 05:30 | 01 Jan SPA Capital Services Ltd

SPA Capital Services Ltd. (SPACAPTSER) - Auditors Report

Company auditors report

TO THE MEMBERS OF SPA CAPITAL SERVICES LIMITED

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone Ind AS financial statementsof SPA CAPITAL SERVICES LIMITED ["the Company") which comprise the Balancesheet as at March 31 2020 the Statement of Profit and Loss including the statement ofOther Comprehensive Income the Cash Flow Statement and the Statement of Changes in Equityfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us except for the possible effects of the matter described in the'Basis for Qualified Opinion' section of our report the aforesaid standalone Ind ASfinancial statements give the information required by the Companies Act 2013 as amended["the Act") in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2020 its loss including other comprehensiveincome its cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

The company has taken various loans which were outstanding as on 31stMarch 2020. The management has not provided the interest on some of the loans whichconstitute a departure from the Accrual basis of accounting. The company's recordsindicate that an amount of Rs.7953482/- has hot been provided as interest expenses onthese loans which would have been decreased the profit by Rs. 79S3482/- and alsoincreased the loan liability by same amount .

The Company's management and Board of Directors are responsible for theother information. The other information comprises the information included in theCompany's annual report but does not include the financial statements and our auditors'report thereon. Our opinion on the Standalone Financial Statements does not cover theother information and we do not express any form of assurance conclusion thereon. Inconnection with our audit of the Standalone Financial Statements our responsibility is toread the other information and in doing so consider whether the other information ismaterially inconsistent with the Standalone Financial Statements or our knowledge obtainedin the audit or otherwise appears to be materially misstated. If based on the work wehave performed we conclude that there is a material misstatement of this otherinformation; we are required to report that fact. We have nothing to report in thisregard.

Responsibility of Management for Standalone Financial Statements

The Company's 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 standalone financial statements that give a true and fair view ofthe financial position financial and the Cash Flow Statement of the Company in accordancewith the accounting principles generally accepted in India including the accountingStandards specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. Those Board of Directors are also responsible foroverseeing the company's financial reporting process.

Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit.

We also:

1. Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

2. Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)0) of the Companies Act 2013 we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

3. Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report However future events or conditions maycause the Company to cease to continue as a going concern.

5. Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the under lying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the StandaloneFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because ihe adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the "Annexure A" statement onthe matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.

(c) The standalone balance sheet the standalone statement of profitand loss (including other comprehensive income) the standalone statement of changes inequity and the standalone statement of cash flows dealt with by this Report are inagreement with the books of account;

(d) In our opinion the aforesaid Standalone Financial Statementscomply with the Ind AS specified under section 133 of the Act;

(e) On the basis of the written representations received from thedirectors as on 31st March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2020 from being appointed as a director interms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(g) With respect to the matter to be included in the Auditors' Reportunder section 197(16):

In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act.

(h) With respect to the other matters to be included in theAuditor'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 has disclosed the impact of pending litigations on itsfinancial position in its financial statements which would impact its financial position

ii. The Company has no long-term contracts as at 31st March 2020 andtherefore there are no material foreseeable losses.

iii. There were no amounts which required to be transferred by theCompany to the Investor Education and Protection Fund by the Company during the year ended31st March 2020.

(Referred to in paragraph 1 under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of SPA Capital Services Limited ofeven date)

(i) In respect of fixed assets:

a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

b) The fixed assets were physically verified during the year by theManagement in accordance with a regular program of verification which in our opinionprovides for physical verification of the fixed assets at reasonable intervals. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch verification.

c) In our opinion and according to the information and explanationsgiven to us the title deeds of immovable properties are held in the name of the company.

(ii) In respect of Inventories of the Company:

a) The Company holds securities in physical form as well as indematerialized form. The securities held in physical form have been physically verified bythe management during the year. Securities in the form of dematerialized held as stock intrade by the custodian is verified with the confirmation statement received from them on aregular basis. In our opinion the frequency of such verification is reasonable.

b) In our opinion and according to the information and explanationsgiven to us the procedures of physical verification of inventories followed by themanagement are reasonable and adequate in relation to the size of the Company and thenature of its business.

c) The Company is maintaining proper records of securities held asstock in trade and no discrepancies were noticed on comparing the statement from custodianwith book records.

(iii) The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registerto be maintained under section 189 of the Act.

(iv}In our opinion and according to the information and explanationsgiven to us company has complied with the provisions of section 185 and 186 of the Act inrespect of loans investments guarantees and security.

(v) In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits from the public within the meaningof Section 73 to 76 of the Act and the Rules framed there under. Therefore the provisionof the clause 3(v) of the Order is not applicable to the Company.

(vi) The Company is not required to maintain cost records as prescribedby the Central Government of India under sub-section (1] of section 148 of the Act.

(vii) According to the information and explanations given to us inrespect of statutoiy dues:

a) The Company has been irregular in depositing undisputed statutoiydues including Provident Fund Employees' State Insurance Income Tax Sales Tax andValue Added Tax Wealth Tax Goods and Service Tax duty of Customs duty of Excise Cessand other material statutoiy dues applicable to it with the appropriate authorities.

b) There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income Tax Sales Tax and Value Added Tax Wealth TaxService Tax Goods and Service Tax duty of Customs duty of Excise Cess and othermaterial statutoiy dues in arrears as at March 312020 for a period of more than sixmonths from the date they became payable.

(viii) Based upon the audit procedures and according to the informationand explanations provided to us the company has not defaulted in repayment of loans orborrowings to financial institutions banks governments or dues to debenture holders.

(ix) The Company has not raised any money by way of initial publicoffer or further public offer during the financial year. Company has obtained term loanfrom the banks and the same were applied for the purposes for which those were raised.

(x) To the best of our knowledge and belief and according to theinformation and explanations given to us no material fraud by the company or any fraud onthe Company by any person including its officers or employees has been noticed orreported during the course of our audit.

(xi) Based on our audit procedures and as per information andexplanations given by the management the managerial remuneration has been paid orprovided in accordance with the provisions of section 197 read with Schedule V to theCompanies Act.

(xii) In our opinion and according to the explanations given to us theCompany is not a nidhi company.

(xiii) In our opinion and according to the explanations given to usall transactions with the related parties are in compliance with sections 177 and 188 ofAct and have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) In our opinion and according to the explanations given to us theCompany has riot raised any capital by way of preferential allotment / private placementor fully / partly convertible debenturesduring the year under review and therefore theClause 3(xiv) of the Order is not applicable to the . Company.

(xv) In our opinion and according to the explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith them. Therefore the Clause 3[xv) of the Order is not applicable to the Company.

(xvi) In our opinion and according to the explanations given to uscompany is registered as Non Banking Financial Company under section 4S-IA of the ReserveBank of India Act 1934.

Report on the Internal Financial Controls under Clause (i) ofSub-section (3) of Section 143 of the Companies Act 2013 (the "Act")

[Referred to in paragraph 2[f) under ‘Report on Other Legal andRegulatory Requirements' section of our report to the Members of SPA Capital ServicesLimited of even date)

OPINION

We have audited the internal financial controls with reference tofinancial statements of SPA Capital Services Limited ["the Company") as of 31March 2020 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.

In our opinion the Company has in all material respects adequateinternal financial controls with. reference to financial statements and such internalfinancial controls were operating effectively as at 31 March 2020 based on the internalfinancial controls with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India [the "Guidance Note").

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management and the Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.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 ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act"].

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Act to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of standalone financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail

accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorizations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

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