TO THE MEMBERS OF: SANTOSH INDUSTRIES LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of SANTOSH
INDUSTRIES LIMITED (“the company"), which comprises the Balance Sheet as at
31st March, 2017, the Statement of Profit and Loss and Cash Flow Statement for the year
then ended, and a summary of significant accounting policies and other explanatory
information.
Managements Responsibility for the Standalone Financial Statements
The Companys 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
and presentation of these standalone financial statements that give a true and fair view
of the financial position, financial performance and cash flows of the Company in
accordance with the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014, This responsibility also includes maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these standalone financial statements
based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing
standards and matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under
section 143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the financial statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the
auditor considers internal financial control relevant to the Companys preparation of the
financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness of the accounting
estimates made by the Companys Directors, as well as evaluating the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone financial statements give the information required
by the Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of affairs of the
Company as at 31 March 2017 and its profit and its cash flows for the year ended on that
date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 (“the Order”)
issued by the Central Government in of India in terms of sub-section (I I) of section 143
of the Act, we give in the “Annexure A”, a statement on the matters specified in
the paragraph 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 best
of 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 the
Company so far as it appears from our examination of those books;
(c) The balance sheet, the statement of profit and loss and the cash flow statement
dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the
Accounting Standards 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 31
March 2017 taken on record by the Board of Directors, none of the directors is
disqualified as on 31 March 2017 from being appointed as a director in terms of Section
164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in “Annexure B”; and
(g) With respect to (he other matters to be included in the Auditors Report in
accordance with Rule
II of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of
our information and according to the explanations given to us;
i The Company does not have any pending litigations which would impact its financial
position.
ii The Company did not have any long-term contracts including derivatives
contracts for which there were any material foreseeable losses.
iii There are no amount, required to be transferred, to the Investor Education and
Protection Fund by the Company.
iv The Company had provided requisite disclosures in its financial statements as to
holdings as well as dealings in Specified Bank Notes during the period from 8th
November, 2016 to 30th December. 2016 and these are in accordance with the
books of accounts maintained by the company.
To the Members of SANTOSH INDUSTRIES LIMITED Annexure - A to the Auditors
Report
The Annexure referred to in Independent Auditors Report to the members of the Company
on the standalone financial statements for the year ended 31 March 2017, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including
quantitative details
and situation of its fixed assets.
(b) The fixed assets have been physically verified by the management at reasonable
intervals and no material discrepancies were noticed on such verification.
(c) According to t he information and explanations given to us and on the basis of our
examination of the records of the Company, the title deeds of immovable properties
included in Non-Current Investments are held in the name of the Company,
(ii) As explained to us physical verification of tire inventories (held Physically and
Demat Form) have been conducted at reasonable intervals by the management, which in our
opinion is reasonable, having regard to the size of the Company and nature of its
inventories. No material discrepancies were noticed on such physical verification.
(iii) The Company has granted loans to bodies corporate covered in the register
maintained under section 189 of the Companies Act. 2013 (‘the Act).
a) In our opinion, the rate of interest and other terms and conditions on which the
loans had been granted to the bodies corporate listed in the register maintained under
section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.
b) In the case of the loans granted to the bodies corporate listed in the register
maintained under section 189 of the Act, the borrowers have been regular in the payment of
the principal and interest as stipulated.
c) There are no overdue amounts in respect of the loan granted to a body corporate
listed in the register maintained under section 189 of the Act.
(tv) The Company being NBFC and charging Imerest at a rate not less than the bank rate
declared by the Reserve Bank of India, hence provisions of Section 185 & 186 of the
Companies Act, 2013 is not applicable Accordingly, the provisions of clause (iv) of
paragraph 3 of the Order are not applicable to the Company.
(v) In our opinion and according to the information given to us, the Company has not
accepted any deposits from public, within the meaning of the directives issued by the
Reserve Bank of India and the provisions of sections 73 to 76 of the Act and the rules
framed there under.
(vi) In our opinion maintenance of cost records has not been prescribed by the Central
Government under subsection (j) of Section 148 of the Act.
(vii) (a) The Company is generally regular in depositing undisputed statutory dues
including Provident Fund,
Employees State Insurance, Income-tax, Sales-tax, Service tax, duty of Custom, duty of
Excise? value added tax, cess and other material statutory dues with the
appropriate authorities. According to the information and explanations given to us, no
undisputed amounts payable in respect of the aforesaid dues, were outstanding as at March
31 st, 2017 for a period of more than six months from the date they became payable,
(b) According to the information and explanations given to us, there are no dues of
Income Tax/ Sales Tax/ Service Tax / duty of Custom/ duty of Excise, value added tax or
cess which have not been deposited on account of any dispute.
(viii) The Company has not defaulted in the repayment of dues to any financial
institutions or banks as at the balance sheet date.
(ix) The Company has not raised any money by way of initial public offer or further
public offer (including debt instrument) or term loans. Accordingly, the provisions of
clause (ix) of paragraph 3 of the Order are not applicable to the Company.
(x) According to the information and explanations given to us, no fraud by the Company
or on the Company by
its officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and based on our
examination of the records of
the Company, the Company has provided for managerial remuneration in accordance with
the requisite
approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) The Company is not a Nidhi Company. Accordingly, the provisions of clause (xii)
of paragraph 3 of the Order are not applicable to the Company.
(xiii) The Company has complied with Section 177 and 188 of Companies Act, 2013 for all
transactions with the related parties and the details have been disclosed in the Financial
Statements, as required under Accounting Standards - 18 related party disclosures
specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014.
(xiv) The Company has not made any preferential allotment or private placement of
shares or fully or partly convertible debentures during the year under review.
Accordingly, the provisions of clause (xiv) of paragraph 3 of the Order are not applicable
to the Company.
(xv) The Company has not entered into any non-cash transactions with the directors or
persons connected with him during the year under review. Accordingly, the provisions of
clause (xv) of paragraph 3 of the Order are not applicable to the Company.
(xvi) According to the information and explanations given to us the company is already
registered under section 45-1A of the Reserve Bank of India Act, 1934,
TO THE MEMBERS OF: SANTOSH INDUSTRIES LIMITED Annexure - B to the Auditors Report
Report on 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 Santosh
Industries Limited (“the Company”) as of 31 March 2017 in conjunction with our
audit of the standalone financial statements of the Company for the year ended on that
date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
issued by the institute of Chartered Accountants of India (‘[CAP). These
responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to companys policies, the safeguarding of
its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Companies Act. 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
(the “Guidance Note”) and the Standards on Auditing, issued by ICAi and deemed
to be prescribed under section 143( 10) of the Companies Act, 2013, to the extent
applicable to an audit of internal financial controls, both applicable to an audit of
Internal Financial 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 and plan and perform the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and rheir operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Company^, Internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys 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 financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company lias, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at 31 March 2017, based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated In the Outdance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants ofindia.
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