To the Members of
SUNSHINE CAPITAL LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of SUNSHINECAPITAL LIMITED("the Company") which comprise the Balance Sheet as at March31 2018 and the Statement of Profit and Loss 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 Management is responsible for the matters in section134(5) of the Companies Act 2013 (the Act) with respect to preparation of these financialstatements that give a true and fair view of the financial position financial performanceand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Accounting Standards specified under section 133 theCompanies Act 2013 read with rule 7 of Companies (Accounts) Amendment Rules 2015. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provision of the act for the safeguarding of Assets of the company and forpreventing and detecting the frauds and other irregularities selection and application ofappropriate accounting policies making judgments and estimated that are reasonable andprudent and design implementation and maintenance of internal financial control thatwere operating 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 financialstatements based on our audit. We have taken into account the provisions of the act theaccounting and Auditing standards and matter which are required to be included in theaudit report under the provision of the act and the rules made there under. We conductedour audit in accordance with the Standards on Auditing specified under section 143 (10) ofthe act. Those Standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the financial statementsare free from material misstatement. An audit involves performing procedures to obtainaudit evidence about the amounts and disclosures in the financial statements. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal control relevant to theCompany's preparation and fair presentation of the financial statements in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by management as well as evaluating the overall presentation ofthe financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.
In our opinion and to the best of our information and according to theexplanations given to us the financial statements subject to the following: Interestincome reversed amounting to Rs.25.31 Lakhs by virtue of which the Profit of the companyhas been understated by Rs.25.31 Lakhs. There is non-provision for diminution in value ofinventories to the tune of Rs.19.25 crore by virtue of which profit of the company hasbeen overstated by Rs.19.25 crore. give the information required by the Act in the mannerso required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India (a) In the case of the Balance Sheet of the state of affairsof the Company as at 31st March 2018; (b) In the case of the Statement of Profit andLoss of the Profit for the year ended on that date; (c) In the case of Cash FlowStatement of the cash inflow for the year ended as at March 31 2018.
Emphasis of matter
We draw attention to the following matters:
Several loans and advances were given during the year and past yearswithout any proper documentary proof.
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 Act the provisions of this order are applicable on this company hencewe are give the report in the "Annexure- A" statement on the matters Specifiedin paragraphs 3 and 4 of the Order.
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 purpose of our audit;b) In our opinion proper books of account as required by law have been kept by the Companyso far as appears from our examination of those book; c) The Balance Sheet and Statementof Profit and Loss dealt with by this Report are in agreement with the books of account;d) In our opinion the aforesaid Financial Statement comply with the Accounting Standardsspecified under section 133 of the act read with 7 of Companies (Accounts) AmendmentRules 2015. e) On the basis of written representations received from the directors as on31st March 2018 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in terms ofsection 164(2) of the act.
f) With respect to adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure B" and g) With respect to the other mattersto be included in the Auditor's Report in accordance with Rule 11 of the Companies (Auditand Auditors) Rules 2014 in our opinion and to the best of our information and accordingto the explanations given to us: (i) The Company does not have any pending litigationswhich would impact its financial position. (ii) The Company did not have any long-termcontracts including derivative contracts for which there were any material foreseeablelosses. (iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company
FOR M/S DEEPAK RAJESH & ASSOCIATES CHARTERED ACCOUNTANTS FRN:028018N
CA. DEEPAK (PROPRIETOR) M. No. 531291
"Annexure A" referred to in paragraph 1 of the section on"Report on other legal and regulatory requirements" of our report of even date
TO THE MEMBERS OF SUNSHINE CAPITAL LIMITED
(i) Fixed Assets
a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets on the basis of availableinformation.
b) As explained to us all the fixed assets have been physicallyverified by the management in a phased periodical manner which in our opinion isreasonable having regard to the size of the Company and nature of its assets. No materialdiscrepancies were noticed on such physical verification.
a) The inventories have been physically verified during the year by themanagement. In our opinion the frequency of 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 has maintained proper records of inventories. As per theinformation and explanation given to us no material discrepancies were noticed onphysical verification.
(iii) Secured or unsecured Loans
The company has granted unsecured loans to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013 during the current period. The company has not been regularin receiving the interest from the parties wherever applicable
(iv) The company has complied with the provision of section 185 &186 in respect of loans investments guarantees and security.
(v) In our opinion and according to the Information & Explanationgiven to us The Company has not accepted deposits under the provisions of sections 73 to76 are not applicable or any other relevant provisions of the Companies Act 2013 and therules framed there under.
(vi) We have been informed that the maintenance of cost records has notbeen prescribed by the Central Government under sub-section (1) of section 148 of theCompanies Act 2013.
(vii) Statutory Dues:
a) According to the records of the Company undisputed statutory duesincluding Provident Fund
Employees' State Insurance Income Tax Sales Tax Wealth Tax ServiceTax duty of
Customs Duty of Excise Value Added Tax Cess and other materialstatutory dues have been generally regularly deposited with the appropriate authorities.According to the information and explanations given to us no undisputed amounts payablein respect of the aforesaid dues were outstanding as at March 31 2018 for a period ofmore than six months from the date of becoming payable. b) According to the informationand explanations given to us there is a pending tax demands of which information givenbelow:
|ACT ||Appeal pending Before || |
Amount of demand
| || || || |
|Income Tax Act ||ITAT || |
|Income Tax Act ||CIT (A) || |
| || || || |
(viii) Since the company has not taken any loan or borrowing from afinancial institution bank Government or dues to debenture holders hence the default inrepayment of dues to banks financial institutions and Government does not arise.
(ix) In our opinion and according to the Information & Explanationgiven to us the company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) and term loans so the clause is not applicablefor the company.
(x) Based on the procedure performed and the information andexplanation given to us we report that no fraud on or by the company has been noticed orreported during the year nor we have been informed of such cases by the management. (xi)In our opinion and according to the information and Explanation given to us company haspays or provides managerial remuneration in accordance with the requisite approvalmandated by the provisions of section 197 read with Schedule V to the Companies Act. (xii)The company is not a Nidhi company hence the provision related to the the Nidhi Company isnot applicable. (xiii) In our opinion and according to the information and Explanationgiven to us company has complied the provision of related party transaction refer insections 177 and 188 of Companies Act 2013 and the detail have been disclosed in thefinancial statement as required by the applicable Accounting Standard.
(xiv) The company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview.
(xv) The company has not entered into any non-cash transactions withdirectors or persons connected with him.
(xvi) The Company having Certificate of Registration No. B-14.01266issued on 25.09.1998 by Reserve Bank of India New Delhi under Section 45 IA of the RBIAct 1934
For Deepak Rajesh & Associates Chartered Accountants
ICAI Firm Registration Number: 028018N
Membership Number: 531291
ANNEXURE-B" REFERRED TO IN PARAGRAPH 2 (f) OF THE SECTION ON"REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
To the Members of SUNSHINE CAPITAL LIMITED
We have audited the internal financial controls over financialreporting of SUNSHINE CAPITAL LIMITED ("the Company") as of March 312018 which is based on criteria established in Internal Control Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (2013framework) (the COSO 2013 criteria) in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established under the COSO 2013 criteria which considers the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
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 as specifiedunder section 143(10) of the
Companies Act 2013 to the extent applicable to an audit of internalfinancial controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
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 judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlssystem 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 financial
statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financial reportingincludes those policies and procedures that (1) pertain to the maintenance of recordsthat 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 authorizations 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 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.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2018 basedon the internal control over financial reporting in COSO 2013 criteria considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For Deepak Rajesh & Associates
ICAI Firm Registration Number: 028018N
Membership Number: 531291
Place : Rohtak