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Suchitra Finance & Trading Company Ltd.

BSE: 538714 Sector: Financials
NSE: N.A. ISIN Code: INE475D01010
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NSE 05:30 | 01 Jan Suchitra Finance & Trading Company Ltd
OPEN 61.55
PREVIOUS CLOSE 61.55
VOLUME 11
52-Week high 70.35
52-Week low 31.35
P/E 6.23
Mkt Cap.(Rs cr) 57
Buy Price 65.00
Buy Qty 50.00
Sell Price 61.55
Sell Qty 25.00
OPEN 61.55
CLOSE 61.55
VOLUME 11
52-Week high 70.35
52-Week low 31.35
P/E 6.23
Mkt Cap.(Rs cr) 57
Buy Price 65.00
Buy Qty 50.00
Sell Price 61.55
Sell Qty 25.00

Suchitra Finance & Trading Company Ltd. (SUCHITRAFINANCE) - Auditors Report

Company auditors report

TO THE MEMBERS OF SUCHITRA FINANCE AND TRADING COMPANY LIMITED

Report on the audit of the Financial Statements

Qualified Opinion

We have audited the accompanying financial statements of Suchitra Finance and TradingCompany Limited ("the Company")which comprise the Balance Sheet as at 31stMarch 2019 the Statement of Profit and Loss and the Statement of Cash Flows for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of matter described in the Basis for QualifiedOpinion the aforesaid financial statements give the information required by the CompaniesAct 2013 (‘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 31stMarch 2019 the profit and its cash flows for the yearended on that date.

Basis for Qualified Opinion

As mentioned in Note 24(b) to the financial statements the Company has not recognisedinterest of Rs. 262739726/- on loan advanced to IL&FS Transportation NetworkLtd.(IL&FSTN) though the said loan has became NPA after the close of the year andcorrespondingly it has not provided interest aggregating to Rs. 253356164/-on short-termborrowing from group concerns which borrowings were utilized for in turn advancing toIL&FSTN. Consequently the interest income and the interest expense would have beenincreased by Rs. 262739726/-and Rs. 253356164/-respectively and profit for the year andshareholders' funds would have increased by Rs. 9383562/-. We conducted our audit of thefinancial statements in accordance with the Standards on Auditing (SAs) specified undersection 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute ofChartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit ofthe financialstatements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our qualified opinion onthe financialstatements.

Key Audit Matters

Key auditmatters 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 andinforming our opinion thereon and we do not provide a separate opinion on these matters.In addition to the matter described in the Basis for Qualified Opinion section we havedetermined the matters described below to be the key audit matters to be communicated inour report.

KEY AUDIT MATTERS HOW ADDRESSED IN AUDIT
Accuracy in identification and categorizationof receivables from financing activities as performing and non- performing assets including those under securitization arrangements and in ensuring appropriate asset classification existence of security income recognition provisioning/ write off thereof and completeness of disclosure including compliance in accordance with the applicable extant guidelines issued by Reserve Bank of India (RBI). Wehave assessed the systems and processes laid down by the company to appropriately identify and classify the receivables from financing activities including those in place to ensure correct classification income recognition and provisioning/write off including of Non-performing assets as per applicable RBI guidelines. The audit approach included testing the existence and effectiveness of the control environment laid down by the management and conducting of detailed substantive verification on selected samples of continuing and new transactions in accordance with the principles laid down in the Standards on Auditing and other guidance issued by Institute of Chartered Accountants of India. Agreements entered into regarding significant transactions including related to corporate loans and securitization/assignment arrangements have been examined to ensure compliance. We have also reviewed the reports generated from management information systems audit reports issued by the internal/secretarial auditors. The impact of all significant external and internal events including those if any subsequent to balance sheet date have been taken into consideration for the above purposes. Compliance with material disclosure requirements prescribed by RBI guidelines and otherstatutory requirements have been verified.
Completeness in identification accounting and disclosure of related party transactions in accordance with the applicable laws and financial reporting framework. We have assessed the systems and processes laid down by the company to appropriately identify account and disclose all material related party transactions in accordance with applicable laws and financial reporting framework. We have designed and performed audit procedures in accordance with the guidelines laid down by ICAI in the Standard on Auditing (SA 550) to identify assess and respond to the risks of material misstatement arising from the entity's failure to appropriately account for or disclose material related party transactions which includes obtaining necessary approvals at appropriate stages of such transactions as mandated by applicable laws and regulations. We have also reviewed the Secretarial Audit report during the course of evaluating the internal control systems in ensuring compliance with applicable laws rules regulations and guidelines.

Other Information

The Company's Board of Directors is responsible for preparation and presentation of theother information. The other information comprises the information included in the Board'sReport including Annexures to Board's Report but does not include the financialstatements and auditors' report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appear to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of thisotherinformation;we are required to report that fact. We have nothing toreport in thisregard.

Management's Responsibilities for theFinancial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards specified under section 133 of the Act readwith Rule 7of the Companies (Accounts) Rules2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internalfinancial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due 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.

The Board of Directors arealso responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities 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 includesour 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. As part of an audit in accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also:

i. identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

ii.obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) ofthe Act we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls with reference to financial statements inplace and the operating effectiveness of such control.

iii.evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

iv.conclude on the appropriateness of management's use of the going concern basis ofaccounting 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.

v.evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation. We communicate withthose charged with governance regarding among other matters the planned scope and timingof the audit and significant audit findings including any significant deficiencies ininternal control that we identify during our audit. We also provide those charged withgovernance with a statement that we have complied with relevant ethical requirementsregarding independence and to communicate with them all relationships and other mattersthat may reasonably be thought to bear on our independence and where applicable relatedsafeguards.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued bythe Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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 best ofour knowledge and belief were necessary for the purposes of our audit except for thematter described in the Basis for Qualified Opinion paragraph.

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 the Statement of Cash Flowdealt with by this Report are in agreement with the books of account.

d.Except for the effects of the matter described in the Basis for Qualified Opinionparagraph 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 the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.

f.With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure-B.

g.With respect to the other matters to be included in the Auditor's Report inaccordance with Section 197(16) of the Act in our opinion and to the best of ourinformation and according to the explanationsgiven to us the remuneration paid by theCompany to its directors during the year is in accordance with the provisions of section197 of the Act.

h.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 disclosed the impact if any of pending litigations as on 31stMarch 2019 on its financial position vide Note 16 to the financial statements.

ii.The Company did not have any long-term contracts including derivative contract forwhich there were any material foreseeable losses.

iii.There has not been an occasion in case of the Company during the year under reportto transfer any sums to the Investor Education & Protection Fund and therefore thequestion of delay in transferring such sums does not arise.

For S. S. Rathi & Co
Chartered Accountants
(Firm Regn. No.108726W)
Sd/-
D.P. Rathi Partner
M.No.042068
Place: Mumbai
Date:20th June 2019

ANNEXURE "A"TO THE AUDITORS' REPORT

(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirementssection of our Report of evendate)

1.(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) As explained to us the Management has physically verified fixed assets during theyear and no discrepancieshave been noticed. In our opinion the frequency of physicalverification of fixed assets is reasonable.

(c) Reporting under clause 3(i)(c) of the Order is not applicable as the Company doesnot own any immovable property.

2.The Company does not have anyinventories. Hence reporting under clause 3(ii) of theOrder is not applicable to the Company.

3. As informed to us theCompany has granted unsecured loans to companies covered inthe register maintained under section 189 of the Companies Act 2013. Thereare nofirms/LLP/other partieswhich are covered in the said register.

(a)The terms and conditions of the grants of such loans are not prejudicial to theCompany's interest.

(b)The loans advanced to the aforesaid companies are repayable on demand and interestaccrues accordingly and on that basis the same is regular. (c) In respect of aforesaidloans there is no amount which is overdue for more than ninety days.

4. In our opinion and according to the information and explanations given to us theprovisions of section 185 of the Act are not applicable to the Company. The Company hascomplied with the provisions of section 186 of the Act to the extent applicable.

5. The Company has not accepted any deposits from the public within the meaning ofSections 73 to 76 of the Act and the Rules framed thereunder to the extent notified.

6. Reporting under clause 3(vi) of the Order is not applicable as the Company'sbusiness activities are not covered by the Companies (Cost Records and Audit) Rules 2014.

7. (a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company has been regular in depositingundisputed statutory dues applicable to it.

(b)According to the information and explanations given to us and the records of theCompany examined by us there are no dues of Service Tax Customs Duty Excise Duty Goodsand Service Tax & Value Added Tax that have not been deposited with the appropriateauthorities on account of any dispute. Details of dues towards Income Tax that have notbeen deposited on account of dispute are as stated below:

Name of the Statute Nature of Dues Amount (in Rs.) Period to which it relates Forum where dispute is pending
Income-tax Act 1961 Income Tax 31556300/- A.Y. 2011-12 CIT(Appeals)- 12 Pune

8. According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to financial institution. The Company hasnot taken any loans or borrowings from Bank andGovernment nor has it issued any debenturesas at the balance sheet date.

9. The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments). The term loan raised by the Company in thepreceding year were for the purpose of advancing loans interalia to M/sKalyanTollInfrastructure Ltd which though initially advanced to the said Company the major part ofthe said advances has been received back and advanced to other company during the year.There is no delay or defaults in respect of the term loan so availed by the Company.

10.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 we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case bytheManagement.

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

12.In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly the provisions of clause 3(xii) of the Orderare not applicable to the Company.

13. According to the information and explanations given to us and based on ourexaminations of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicableand the details have beendisclosed in the Financial Statements as required by the applicable Accounting Standards.

14.According to the information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly the provisions of clause 3(xiv) of the Order arenot applicable to the Company.

15.According to the information and explanations given to us the Company has notentered into any non-cash transactions with its directors or persons connected with him.Accordinglythe provisions of clause 3(xv) of the Order are not applicable to the Company.

16.On examination of relevant records and according to the information and explanationsgiven to us the Company is required to be registered under section 45-IA of ReserveBankof India Act 1934 and holds a valid certificate of registration under the same.

For S. S. Rathi & Co
Chartered Accountants
(Firm Regn. No.108726W)
Sd/-
D.P. Rathi
Partner
M.No.042068
Place: Mumbai
Date:20th June 2019

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date) Report on the Internal FinancialControls 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 SuchitraFinance and Trading Co. Ltd. ("the Company") as of 31st March 2019 inconjunction with our audit of the financial statements of the Company for the year endedon 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 ControlsoverFinancial Reporting issuedby the Institute of Chartered Accountants of India (the"Guidance Note"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors' Responsibility

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 Standards on Auditing prescribed under section 143(10) of Act and the GuidanceNote to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply withethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 reportingincludedobtaining 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 of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate 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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2019 based on the criteria forinternal 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 S. S. Rathi & Co
Chartered Accountants
(Firm Regn. No.108726W)
Sd/-
D.P. Rathi
Partner
M.No.042068
Place: Mumbai
Date:20th June 2019