To the Members of SRESTHA FINVEST LIMITED Report on the Audit of the StandaloneFinancial Statements
We have audited the Standalone Financial Statements of Srestha Finvest Limited(the Company') which comprise the Balance Sheet as at 31st March 2021and the statement of Profit and Loss (statement of changes in equity) and statement ofcash flows for the year then ended and notes to the financial statements including asummary of significant accounting policies and other explanatory information referred toas Standalone Financial Statements.
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 March 31 2021 and its loss after tax total comprehensive loss changes in equityand 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 provision of the Companies Act 201 3 and the Rules thereunderand have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
Information Other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the preparation of otherinformation. The other information comprises the information included in the Board'sReport Management Discussion and Analysis and report on corporate governance but doesnot include the standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statement or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is no materialmisstatement of this other information we are required to report the fact. We have nothingto report in this regard.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(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 (changes in equity) and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting standards specified under Section 1 33 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of financialstatements that give a true and fair view and are free from material misstatement whetherdue 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 the Company's financialreporting process.
Auditor's Responsibility 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.
Paragraph 40(b) of this SA explains that the shaded material below can be located in anAppendix to the auditor's report. Paragraph 40(c) explains that when law regulation orapplicable auditing standards expressly permit reference can be made to a website of anappropriate authority that contains the description of the auditor's responsibilitiesrather than including this material in the auditor's report provided that the descriptionon the website addresses and is not inconsistent with the description of the auditor'sresponsibilities below.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain 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 201 3 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
As required by Companies (Audit Report) Order 201 6 ("the Order") issued bythe Central Government of India in terms of sub-section (11) of Section 143 of theCompanies Act 2013 we give in the Annexure A a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
As required by Section 143(3) of the Act we report
(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 [and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus.;
(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 aforesaid standalone financial statements comply with theAccounting Standards specified under Section 1 33 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 on 31stMarch2021 and taken on record by the Board of Directors none of the Directors is disqualifiedas on 31st March 2021 from being appointed as a Director in terms of Section164(2) of the Act; and
(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".
(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) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
(i) The Company has no pending litigations which would impact its financial position.
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
"Annexure A" to Independent Auditors' Report (Referred to in Paragraph 1under the heading "Report on Other Legal and Regulatory Requirements" of ourreport of even date on the accounts of Srestha Finvest Limited ("the Company")for the year ended March 312021)
i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment (PPE);
(b) According to the information and explanations given to us physical verification ofPPE is being conducted in a phased manner by the management under a programme designed tocover all the PPE every year which in our opinion is reasonable having regard to thesize of the Company and nature of its business. Pursuant to the program the PPE has beenphysically verified by the management during the year and no material discrepanciesbetween the books records and the physical PPE have been noticed.
(c) There are no immovable properties in the name of the company.
ii) There are no inventories in the company during the year.
iii) According to the information given to us the Company has granted any loanssecured or unsecured to companies firms Limited Liability Partnerships or other partiescovered in the register maintained under section 189 of the Companies Act 2013. Thereforeclauses (iii) (a) (iii) (b) and (iii) (c) of Paragraph 3 of the Order are applicable tothe Company.
iv) The Company has compiled with the provisions of the Section 1 85 and 1 86 of theCompanies Act 201 3 in respect of loans investments guarantees and security.
v) The Company has not accepted any deposits from public during the year hence thedirectives issued by the RBI and the provisions of sections 73 to 76 or any other relevantprovisions of the Companies Act 201 3 and the Companies (Acceptance of Deposits) Rules2015 are not applicable.
vi) The Company is not required to maintain cost records pursuant to the rules made bythe Central Government for maintenance of Cost Records under sub-section (1) of section148 of the Act.
vii) (a) According to the information and
explanations given to us in due opinion the Company is generally regular indepositing with appropriate authorities undisputed statutory dues including
Provident Fund Employees' State Insurance Income Tax Sales Tax Service Tax duty ofCustoms Duty of Excise Value Added Tax Cess and any other statutory dues as applicableto it.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income Tax Sales TaxService Tax duty of Customs Duty of Excise Value Added Tax Cess and any otherstatutory dues were outstanding as at March 31 2021 for a period of more than six monthsfrom the date they became payable.
(c) According to the information and explanations given to us there are no dues withrespect to Excise Duty and Sales Tax which has not been deposited with the appropriateauthorities on account of any dispute.
viii) Based on our audit procedures and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings to afinancial institution bank or dues to debenture holders.
ix) Based on our audit procedures and according to the information and explanationsgiven to us the Company did not raise any money by way of further public offer (includingdebt instruments) and Term Loans during the year.
x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us on fraud by the company or anyfraud on the company by its officers or employees has been noticed or reported during thecourse of our audit.
xi) Based upon the audit procedures performed and according to the information andexplanations given by the management the managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act;
xii) In our Opinion the Company is not a Nidhi Company. Therefore clause 3(xii) of theCompanies (Auditor's Report) Order 2016 is not applicable to the Company.
xiii) In our Opinion all transactions with the related parties are in compliance withsection 177 and 1 88 of the Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review and therefore clause 3(xiv) of theCompanies (Auditor's Report) Order 2016 is not applicable to the Company.
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) In our opinion and according to the information and explanations given to us theCompany is carrying on the business of NBFC and is required to be registered under Section45-IA of the Reserve Bank of India Act 1934. The Company has duly registered with RBI andcomplied with the applicable regulations in this regard.
"ANNEXURE B" to the Independent Auditor's Report of even date on theStandalone Financial Statements of Srestha Finvest Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section (3) ofSection 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of M/s.Srestha Finvest Limited ("the Company") as of March 31 2021 in conjunction withour audit 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). These responsibilitiesinclude the design implementation and
maintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 201 3.
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 financial reporting 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 unauthorised 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 2021 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 and jointly controlled companies which are companies incorporated inIndia as of that date.
For J V RAMANUJAM & Co. Chartered Accountants FRN:02947S
| ||Sd/- |
| ||Sri Narayana Jakhotia |
|Place: Chennai ||Partner |
|Date: June 29 2021 ||M. No. 022188 |
|UDIN: 21233192AAAABW1076 |