The Members of
SRS FINANCE LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of SRS FINANCE LIMITED("the Company") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss Cash Flow Statement for the year then ended and a summaryof 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 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 read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
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 there under.
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 andthe 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 but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation 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 of the state of affairs of the Company as at March31 2017 and its Profit/Loss and its Cash Flow for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order.
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 purpose of our audit; (b) In ouropinion proper books of account as required by law have been kept by the Company so far asit appears from our examination of those books; (c) The Balance Sheet the Statement ofProfit and Loss and the Cash Flow Statement dealt with by this Report are in agreementwith 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 March 312017 taken on record by the Board of Directors none of the directors is disqualified ason March 31 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 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. TheCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statements - Refer Note 2.27 to the financial statements; ii. The Company didnot have any long-term contracts including derivative contracts for which there were anymaterial foreseeable losses. iii. There were no amounts which were required to betransferred to the Investor Education and Protection Fund by the Company. iv. The companyhad provided requisite disclosures in its financial statements as to holdings as well asdealings in Specified Bank Notes during the period from 8 November 2016 to 30 December2016 and these are in accordance with the books of accounts maintained by the company.[Refer point no. 2.42 of the notes to accounts]
For SVP & Associates
Firm Regn. No. 003838N
(CA Pankaj Kumar)
M. No. 091822
Place : Faridabad
Date : 17.05.2017
Annexure A to the Independent Auditors' Report
Referred to in paragraph 1 under the heading 'Report on Other Legal & RegulatoryRequirement' of our report of even date to the financial statements of the Company for theyear ended March 31 2017:
1) Fixed Assets [Clause 3(i)]:
(a) Proper Records: The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) Physical Verification: As explained to us the fixed assets have beenphysically verified by the management during the year which in our opinion is reasonablehaving regard to the size of the Company and nature of its business. No materialdiscrepancies between the book records and the physical fixed assets have been noticed.
(c ) Title Deed: The title deeds of immovable properties are held in the name ofthe company
2) Inventory [Clause 3(ii)]:
Physical Verification: The Company is an NBFC and has not dealt with any goodsand the Company does not hold any inventory except Inventory of Securities during the yearunder audit. Accordingly the provisions of clause 3(ii) of the order regarding physicalverification of Inventory are not applicable to the Company. The Company is maintainingproper records of inventory. As far as we could ascertain and according to the informationand explanations given to us no material discrepancies were noticed between the stockrecords and financial records.
3) Loan given by the company [Clause 3(iii)]:
The Company has granted loans to bodies corporate covered in the register maintainedunder section 189 of the Companies Act 2013 ('the Act').
(a) Terms and conditions: The terms and conditions of the grant of such loansare not prejudicial to the company's interest.
(b) Regular Recovery: In the case of the loans granted to the bodies corporatelisted in the register maintained under section 189 of the Act the borrowers have beenregular in the payment of the interest as stipulated. The terms of arrangements do notstipulate any repayment schedule and the loans are repayable on demand. Accordingly thisclause of the order is not applicable to the Company in respect of repayment of theprincipal amount.
(c) Steps for recovery: The total amount overdue for more than 90 days is Rs.235249325.00 (principal amount is Rs.23527599.00 & interest amount isRs.211721726.00) and reasonable steps have been taken by the company for recovery ofthe principal and interest.
4) Loan to directors and investment by company [Clause 3(iv)]:
Provisions of section 185 and 186 of the Companies Act 2013 does not apply to theCompany with reference to the business carried on by it during the year ended on 31 March2017.
5) Deposits [Clause 3(v)]:
In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public and consequently the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherprovision of the Companies Act and the rules framed there under are not applicable to thecompany.
6) Cost Records [Clause 3(vi)]:
As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub- section (1) of Section 148 of the Act in respect of theactivities carried on by the company.
7) Statutory Dues [Clause 3(vii)]:
(a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Valueadded Tax Cess and any other statutory dues with the appropriate authorities. Accordingto the information and explanations given to us no undisputed amounts payable in respectof the above were in arrears as at March 31 2017 for a period of more than six monthsfrom the date on when they become payable.
(b) According to the information and explanation given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added taxoutstanding on account of any dispute. However according to the information andexplanation given to us the following dues of income Tax have not been deposited by the
Company on account of disputes:
(Rs. in Lacs)
|Nature of dues ||Amount ||Period to Which Amount Relates ||Amount Deposited under protest ||Forum where dispute is pending |
|Income Tax ||23.77 ||1996-97 ||12.00 ||ITAT New Delhi |
8) Repayment of Loans [Clause 3(viii)]:
In our opinion and according to the information and explanations given to us theCompany has not taken any loan either from financial institutions or from the governmentand has not issued any debentures. The Company has defaulted in the repayment of dues tobanks details of which are as follows:-
|Bank ||NPA ||Principal as on 31.03.2017 ||Overdue Interest as on 31.03.2017 ||Total o/s as on 31.03.17 |
|Bank of Baroda ||31.03.2017 ||650000000 ||38964532.50 ||688964532.50 |
|Karnataka Bank ||28.02.17 ||100000000 ||4501588.00 ||104501588.00 |
|Corporation Bank ||28.09.16 ||350000000 ||37476577.89 ||387476577.89 |
9) Utilisation of IPO and further public offer [Clause 3(ix)]:
Based upon the audit procedures performed and the information and explanations given bythe management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
10) Reporting of fraud [Clause 3(x)]:
Based upon the audit procedures performed and the information and explanations given bythe management we report that no fraud by the Company or on the company by its officersor employees has been noticed or reported during the year.
11) Approval of Managerial Remuneration [Clause 3(xi)]:
Based upon the audit procedures performed and the information and explanations given bythe management the managerial remuneration has been paid or provided in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Companies Act;
12) Nidhi company [Clause 3(xii)]:
In our opinion the Company is not a Nidhi Company. Therefore this clause of the orderis not applicable to the Company.
13) Related Party Transaction [Clause 3(xiii)]:
In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
14) Private Placements or Preferential Issues [Clause 3(xiv)]:
Based upon the audit procedures performed and the information and explanations given bythe management the company has not made any preferential allotment or private placementof shares or fully or partly convertible debentures during the year under review.Accordingly the provisions of clause 3 (xiv) of the Order are not applicable to theCompany and hence not commented upon.
15) Non Cash Transactions [Clause 3(xv)]:
Based upon the audit procedures performed and the information and explanations given bythe management the company has not entered into any non-cash transactions with directorsor persons connected with him. Accordingly the provisions of clause 3 (xv) of the Orderare not applicable to the Company and hence not commented upon.
16) Register under RBI Act 1934 [Clause 3(xvi)]:
In our opinion the company is required to be registered under section 45 IA of theReserve Bank of India Act 1934 and accordingly the company has obtained registrationReg. No. N-14.03202
For SVP & Associates (Chartered Accountants) Firm Regn. No. 003838N
(CA Pankaj Kumar)
M. No. 091822
Place : Faridabad
Date : 17.05.2017
"Annexure B" to the Independent Auditor's Report of even date of SRS FINANCELIMITED the Internal Financial
Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")
We have audited the internal financial controls over financial reporting of SRS FINANCELIMITED as of March 31 2017 in
conjunction with our audit of the financial statements of the Company for the yearended 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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.
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 SVP & Associates
Firm Regn. No. 003838N
(CA Pankaj Kumar)
M. No. 091822
Place : Faridabad
Date : 17.05.2017