| We have audited the accompanying financial statements of Khandwala
Securities Limited ('the Company') which comprise the Balance Sheet as
at 31stMarch 2015, the Statement of Profit and Loss and the Cash Flow
Statement for the year ended and a summary of significant accounting
policies and other explanatory information.
2. Management's Responsibility for the 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 and presentation of these 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 ma intendance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of 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.
3. Auditor's Responsibility
Our responsibility is to express an opinion on these 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 auditor's 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 Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal fi
nancial control system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's 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 financial
statements.
4. Opinion
In our opinion and to the best of our information and according to the
explanations given to us and to the best of our information and
according to the explanations given to us, the aforesaid 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 31st March, 2015, and its profit and cash
flows for the year ended on that date.
5. Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ('the
Order') issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraph 3 and 4 of the Order,
the extent applicable.
2. Further to our comments in our opinion referred to above, we report
that:
a. The Company had advanced application money towards purchase of
shares of Rs. 216.69 lacs, which is outstanding for a period of 156
months as at the end of the year. In the absence of information
regarding the status of the allotment or the net worth of the entities
in which the Company made applications, we are unable to ascertain the
extent to which an amount of Rs. 216.69 lacs is recoverable and
accordingly, the effect thereof on the financial statements cannot be
ascertained. Please refer Note No. 21 forming part of financial
statements.
b. Long-term deposits to various companies of Rs. 530.00 lacs are
subject to confirmation and subsequent adjustments, if any. Please
refer Note No. 22 forming part of financial statements.
3. 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 accounts.
(d) In our opinion, the aforesaid 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 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March,
2015 from being appointed as a director in terms of Section 164 (2) of
the Act; and
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 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 of company except as reported in Notes to the
accounts.
ii. The Company did not have any long-term I contracts including
derivative contracts for which there were any material foreseeable
losses;
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
ANNEXURE TO THE AUDITOR'S REPORT
With reference to the Annexure referred to in the Independent Auditors'
Report to the Members of Khandwala Securities Limited ('the Company')
on the financial statements for the year ended 31 March 2015, we
report that:
(i) In respect of company's fixed assets;
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by
management of the respective entities in accordance with a phased
periodical programme of verification which, in our opinion and the
opinion of other auditors, is reasonable. According to the information
and explanations given to us and based on the auditor's report of the
aforesaid subsidiary companies and associate companies incorporated in
India, no material discrepancies were noticed on such verification.
(ii) The Company is a service company primarily engaged in the business
of rendering merchant banking service. Accordingly, it does not hold
any physical inventories. Thus, paragraph 3(ii) of Order is not
applicable.
(iii) In our opinion and according to the information and explanations
given to us, the company has not granted any loans, secured or
unsecured to companies, firms or other parties covered in the register
maintained under section 189 of the Companies Act. Hence reporting
under clause 3(iii) of the Order is not applicable to the company.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with size of the Company & nature of its business for the
purchase of fixed assets and for sale of service. During the course of
our audit, we have not observed any major weakness in such internal
control system.
(v) According to the information and explanations given to us, the
Company has not accepted deposits within the meaning of section 73 to
76 or any other relevant provisions of the Act and rules framed there
under. However the company has received loan from an individual
amounting to Rs. 11,61,000/- in the FY 2011- 12 and same is due in year
2016-2017.
(vi) The Central Government has not prescribed the maintenance of cost
records under sub-section (l) of section 148 of the Act, for any of
activities of the Company.
(vii) According to the information and explanations given to us and on
the basis of the our examination of the records of the Company, in
respect of statutory dues:
(a) The company is regular in depositing undisputed statutory dues
including provident fund, employees' state insurance, income-tax,
service tax, and any other statutory dues with the appropriate
authorities. However there have been few cases of delays in payment of
statutory liabilities.
(b) There are no materials dues of income tax or service tax or which
have not been deposited with appropriate authorities as at 31st March,
2015 on account of any pending dispute except reported as below.
Details of dues of income tax which not been deposited as at March 31,
2015 on account of disputes are given below:
Name Nature Amount Period to which Forum Under
of the of the (Rs. In the amount where Section
Statute Dues Lacs) relates Dispute
is
pending
Income Income 31.88 A.Y. 2006-07 CIT(A) 271(1)(C)
Tax Act Tax 7.80 A.Y. 2007-08 CIT(A) 271(1)(C)
1961 19.49 A.Y. 2009-10 CIT(A) 271(1)(C)
4.96 A.Y. 2007-08 ITAT 143(3)
82.65 A.Y. 2009-10 ITAT 143(3)
(c) The Company has generally been regular in transferring amounts to
the Investor Education and Protection Fund in accordance with the
relevant provisions of the company act and Rules made thereunder within
time.
(viii) The Company does not have accumulated losses at the end of the
financial year and has not incurred cash losses in the financial
year. However company has incurred cash loss in previous Financial
Year.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
financial institutions and bank. The company has not issued any
debentures.
(x) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xi) According to the information and explanations given to us, Company
has not obtained any term loan in current Financial Year.
(xii) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
For Udyen Jain and Associates
Chartered Accountants
ICAI Reg. No. : 116336W
Mr. Udyen Jain Partner
Mem. No:F- 101201
Place: Mumbai
Date : 26th May, 2015
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