Mar 31, 2015
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
Mar 31, 2014
We have audited the accompanying financial statements of Khandwala
Securities Limited (''the Company'') which comprise the Balance Sheet
as at 31stMarch 2014, the Statement of Profit and Loss for the year
ended and a summary of significant accounting policies and other
explanatory information.
2. Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance of the Company in accordance with the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control 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 conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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 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 control relevant to the Company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness
of the entity''s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness
of the accounting estimates made by management, 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.
4. Opinion
In our opinion and to the best of our information and according to the
explanations given to us subject to matters referred in the notes to
accounts, the 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:
(i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2014;
(ii) In the case of the Statement of Profit and Loss, of the Loss for
the year ended on that date.
(iii) In the case of the Cash Flow Statement, of the Cash flow 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, 2003
("the Order"), as amended, issued by the Central Government of
India in terms of sub-section (4A) of section 227 of the Act, we give
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the Order.
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 144
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 companies of Rs. 530.00 lacs are subject to
confirmation and subsequent adjustments, if any. Please refer Note No
23 forming part of financial statements.
3. As required by section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which 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 Company so far as appears from our examination of those
books;
c. The Balance Sheet and Statement of Profit and Loss dealt with by
this Report are in agreement with the books of account;
d. Except for our comments above, in our opinion and to the best of our
information and according to the explanations given to us, the
financial statements read together with the notes thereon, give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India
ANNEXURE TO THE AUDITOR''S REPORT (Referred to in paragraph 4 of our
report of even date to the members of Khandwala Securities Limited on
the financial statements for the period from April 1, 2013 to March 31,
2014)
1. The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
Discrepancies have been identified and adjusted/rectified in the
records relating to fixed assets.
2. According to the information & explanations given to us and having
regards to the size of the company and the nature of its business, in
our opinion the frequency of physical verification of fixed assets need
to be strengthened.
3. None of the fixed assets have been revalued during the year.
4. No substantial part of the fixed assets was disposed off during the
year.
5. The Company is a service company primarily engaged in the business
of rendering merchant banking services. Accordingly, it does not hold
any physical inventories. Thus, paragraph 4(ii) of the Order is not
applicable.
6. The company has not granted any loans, secured or unsecured during
the period.
7. The rate of interest and the other terms and conditions are prima
facie not prejudicial to the interest of the company
8. As the company has not taken any loans, secured or unsecured, from
companies covered u/s 301 of the Companies Act 1956, during the period,
the clause no. 4(iii)(b) and 4(iii)(c) of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the company.
9. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of fixed assets and with regards to
sale of service. The activities of the Company do not involve any
purchase of inventory and sale of goods. In our opinion and according
to the information and explanations given to us, there is no continuing
failure to correct major weaknesses in internal control system.
10. To the best of knowledge and belief, and according to the
information and explanations given to us, we are of the opinion that
transactions that need to be entered into the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
11. No transactions have been entered during the period in the register
maintained in pursuance of section 301 of the Companies Act, 1956 and
based on the audit procedures applied by us and according to the
information and explanations given and the representations made to us,
we have not come across any transaction that need to be entered into
the register maintained in pursuance of section 301 of the Companies
Act, 1956. Accordingly, sub-clause (b) is not applicable.
12. In our opinion and according to information and explanations given
to us, the Company has not accepted any deposits from the public to
which the provisions of Section 58A or Section 58AA of the Companies
Act, 1956 apply.
13. According to the information and explanations given to us, the
Company has an internal audit system. In our opinion, the internal
audit system is adequate with regards to the size of the company and
the nature of its business.
14. According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under
Section 209(1) (d) of the Companies Act, 1956 for any of the activities
ot the Company.
15. According to the information and explanations given tc us, during
the period the company was generally regular in depositing with
appropriate authority undisputed statutory dues, though there have been
few cases of delays in payments of statutory liabilities.
16. According to the information and explanations given tc us and on
the basis of our examination of the records of the Company, amounts
deducted/ accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Income-tax, Sales-tax, Service
tax and other material statutory dues have not been deposited in time
during the year.
17. According to the records of the company, the dues outstanding of
Income Tax and cess on account of any dispute are as follows:
Name of the Nature Amount Period to which
Statute of the (Rs.) the amount
Dues relates
Income Tax Income 31.88 A.Y. 2006-07
Act 1961 Tax 7.80 A.Y. 2007-08
2.5 A.Y. 2008-09
19.49 A.Y. 2009-10
4.96 A.Y. 2007-08
58.89 A.Y. 2008-09
82.65 A.Y. 2009-10
Name of the Statue Forum where Under
Dispute is Section
pending
Income Tax
Act 1961 CIT(A) 271(1)(C)
CIT(A) 271(1)(C)
CIT(A) 271(1)(C)
CIT(A) 271(1)(C)
ITAT 143(3)
ITAT 143(3)
ITAT 143(3)
18. TDS defaults showing on TDS traces website for the various
Financial Years as on 31st March 2014 and Company is under process of
rectifying the defaults by revising the TDS returns.
19. The Company has granted loans and advances on the basis of security
by way of pledge of shares from Bank during the year.
20. According to the information and explanations given to us, no
personal expenses have been charged to revenue account.
21. As at the balance sheet date, the Company does not have accumulated
losses. The Company has incurred cash losses in the current year.
22. According to the information and explanations given to us, though
the company has not defaulted in the repayment of dues to financial
institutions and banks however amount of Rs. 1.20 Cr is pending towards
preferential shareholder for preference dividend.
23. In our opinion, and according to the information and explanations
given to us, the Company is not a chit fund or a Nidhi / mutual benefit
fund / society. Therefore the provisions of paragraph 4(xiii) of the
Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
24. In respect of the Company''s dealings or trading in shares,
securities, debentures and other investments, proper records have been
maintained on a timely basis in respect of the transactions and
contracts during the period under report. According to the information
and explanations given to us, shares and other securities held as
investments are in the Company''s name, except in cases where the same
are in the process of being transferred in its name.
25. According to the information and explanations given to us, the
company has not given guarantees for loans taken by others from banks
which are prima facie prejudicial to the interest of the company.
26. According to the information and explanations given to us, the
Company had applied term loans availed for the purpose for which they
were obtained.
27. In our opinion and according to the information and explanations
given to us, and on an overall examination of the balance sheet of the
Company, prima facie, no funds raised on short-term basis have been
applied for long-term investments and vice versa.
28. According to the information and explanations given to us, during
the period under report, the Company has not made preferential
allotments of equity shares to persons listed in the register
maintained under Section 301 of the Companies Act, 1956.
29. As the company did not have any debentures outstanding during the
year, the clause no. 4(xix) of Companies (Auditor''s Report) Order,
2003 is not applicable to the company.
30. The Company has not made any public issue of shares or debentures
during the period; accordingly, the question of disclosure of end use
of proceeds of public issues does not arise.
31. The company is not a sick industrial company within the meaning of
clause (o) of sub-section (1) of Section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985 (1 of 1986).
32. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
period, nor have we been informed of such case by the management.
For Udyen Jain and Associates
Chartered Accountants
Mr. Udyen Jain
Partner
Mem. No: F- 101201
Firm Reg. No. : 116336W
Place: Mumbai
Date : 30th May, 2014
Mar 31, 2012
1. We have audited the attached Balance Sheet of Khandwala Securities
Limited as at March 31, 2012 and also the Profit and Loss Account and
the Cash Flow Statement for the period from April 1, 2011 to March 31,
2012 annexed thereto (all together referred to as 'financial
statements'). These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. (i) The Company had advanced application money towards purchase of
shares of Rs. 216.69 lacs, which is outstanding for a period more than
120 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. The company has already initiated legal proceeding
against the investee for the recovery of the share application money.
Please refer note no. 20 of Notes forming part of financial statements.
(ii) Short-term deposits from companies of Rs 100.00 lacs as subject to
confirmation and consequential adjustments, if any. Please refer note
no. 21 of Notes forming part of financial statements.
(iii) Short-term deposits to companies of Rs. 530.00 lacs together with
interest accrued thereon Rs. 135.80 lacs (included in loans and
advances) are subject to confirmation and subsequent adjustments, if
any. Please refer note no. 22 of Notes forming part of financial
statements.
We are unable to assess the extent to which the amounts indicated in
paragraphs (iii) are recoverable and the amount in paragraph (ii) is
payable, and accordingly, the effect thereof on the financial
statements cannot be ascertained.
4. As required by the Companies (Auditor's Report) Order, 2003
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
5. Further to our comments in the Annexure referred to above, we
report that:
a. Except for the matters stated in paragraph 3 above, we have
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 appears from our examination of
those books;
c. The balance sheet, profit and loss account and the cash flow
statement dealt with by this report are in agreement with the books of
account;
d. In our opinion, the balance sheet, profit and loss account and the
cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
e. On the basis of written representations received by the Company
from its directors, we report that as on March 31, 2012 none of the
directors is disqualified from being appointed as a director in terms
of clause (g) of sub-section (1) of section 274 of the Companies Act,
1956;
f. Except for our comments in paragraph 3 above, in our opinion and to
the best of our information and according to the explanations given to
us, the financial statements read together with the notes thereon, give
the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
1. In the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2012;
2. In the case of the profit and loss account, of the Loss of the
Company for the period ended on that date; and
3. In the case of the cash flow statement, of the cash flows of the
Company for the period ended on that date.
(Referred to in paragraph 4 of our report of even date to the members
of Khandwala Securities Limited on the financial statements for the
period from April 1, 2011 to March 31, 2012)
1. The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
Discrepancies have been identified and adjusted/rectified in the
records relating to fixed assets.
2. According to the information and explanations given to us and
having regard to the size of the Company and the nature of its
business, in our opinion the frequency of physical verification of
fixed assets is reasonable
3. None of the fixed assets have been revalued during the year.
4. No substantial part of the fixed assets was disposed off during the
year.
5. According to the information and explanations given to us, the
management has conducted physical verification of inventory held in
physical form during the period, as also at the balance sheet date. In
respect of inventory held in dematerialized form, the holding as at the
balance sheet date has been confirmed by the depositories. In our
opinion, having regard to the nature of the inventories, the frequency
of physical verification is reasonable.
6. In our opinion, and according to the information and explanations
given to us, the procedures for physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
7. In our opinion, and according to the information and explanations
given to us, the Company has maintained proper records of inventory
during the period. Discrepancies, if any noticed on physical
verification of inventory as compared to book records maintained were
not of a material nature and have been properly dealt with in the books
of account.
8. The company has not granted any loans, secured or unsecured during
the period.
9. The rate of interest and the other terms and conditions are prima
facie not prejudicial to the interest of the company
10. As the company has not taken any loans, secured or unsecured, from
companies covered u/s 301 of the Companies Act 1956, during the period,
the clause no. 4(iii)(b) and 4(iii)(c) of the Companies (Auditor's
Report) Order, 2003 are not applicable to the company.
11. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventories and fixed assets.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal controls.
12. To the best of knowledge and belief, and according to the
information and explanations given to us, we are of the opinion that
transactions that need to be entered into the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
13. No transactions have been entered during the period in the
register maintained in pursuance of section 301 of the Companies Act,
1956 and based on the audit procedures applied by us and according to
the information and explanations given and the representations made to
us, we have not come across any transaction that need to be entered
into the register maintained in pursuance of section 301 of the
Companies Act, 1956. Accordingly, sub-clause (b) is not applicable.
14. In our opinion and according to information and explanations given
to us, the Company has not accepted any deposits from the public to
which the provisions of Section 58A or Section 58AA of the Companies
Act, 1956 apply.
15. According to the information and explanations given to us, the
Company has an internal audit system. In our opinion, the internal
audit system is adequate with regards to the size of the company and
the nature of its business.
16. According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under
Section 209(1) (d) of the Companies Act, 1956 for any of the activities
of the Company.
17. According to the information and explanations given to us, during
the period the Company was generally regular in depositing with
appropriate authorities, undisputed statutory dues.
18. According to the information and explanations given to us, no
personal expenses have been charged to revenue account.
19. As at the balance sheet date, the Company does not have
accumulated losses. The Company has incurred cash losses in the current
year.
20. According to the information and explanations given to us, the
company has not defaulted in the repayment of dues to financial
institutions and banks.
21. To the best of our knowledge, and according to the information and
explanations given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
22. In our opinion, and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi / mutual benefit
fund / society. Therefore the provisions of paragraph 4(xiii) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the
Company.
23. In respect of the Company's dealings or trading in shares,
securities, debentures and other investments, proper records have been
maintained on a timely basis in respect of the transactions and
contracts during the period under report. According to the information
and explanations given to us, shares and other securities held as
investments are in the Company's name, except in cases where the same
are in the process of being transferred in its name.
24. According to the information and explanations given to us, the
company has not given guarantees for loans taken by others from banks
which are prima facie prejudicial to the interest of the company.
25. According to the information and explanations given to us, the
Company had applied term loans availed for the purpose for which they
were obtained.
26. In our opinion and according to the information and explanations
given to us, and on an overall examination of the balance sheet of the
Company, prima facie, no funds raised on short-term basis have been
applied for long-term investments and vice versa.
27. According to the information and explanations given to us, during
the period under report, the Company has not made preferential
allotments of equity shares to persons listed in the register
maintained under Section 301 of the Companies Act, 1956.
28. As the company did not have any debentures outstanding during the
year, the clause no. 4(xix) of Companies (Auditor's Report) Order,
2003 is not applicable to the company.
29. The Company has not made any public issue of shares or debentures
during the period; accordingly, the question of disclosure of end use
of proceeds of public issues does not arise.
30. The company is not a sick industrial company within the meaning of
clause (o) of sub-section (1) of Section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985 (1 of 1986).
31. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
period, nor have we been informed of such case by the management.
For Udyen Jain & Associates
Chartered Accountants
Aniket Kulkarni
Partner
M.No:- A 127246
Firm Registration No. 116336W
Date: 09th August, 2012
Place: Mumbai
Mar 31, 2011
1. We have audited the attached Balance Sheet of Khandwala Securities
Limited as at March 31, 2011 and also the Profit and Loss Account and
the Cash Flow Statement for the period from April 1, 2010 to March 31,
2011 annexed thereto (all together referred to as 'financial
statements'). These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements.- An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. (i) The Company had advanced application money
towards purchase of shares of Rs. 216.69 lacs, which is outstanding for
a period more than 108 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. The company has already initiated
legal proceeding against the investee for the recovery of the share
application money. Please refer note 3 of Schedule Q to the financial
statements.
(ii) Short-term deposits availed from companies, together with interest
accrued thereon-aggregating Rs 197.90 lacs as of the balance sheet
date, and are subject to confirmation and consequential adjustments, if
any. Please refer note 4 of Schedule Q to the financial statements.
(iii) Loans/Deposits placed with companies, aggregating Rs. 530 lacs,
and certain interest accrued aggregating Rs. 135.80 lacs as at the
balance sheet dated 31st March 2011, are subject to confirmation and
consequential adjustments, if any. No provision for interest receivable
has been made from the deposits for the year. Please refer note 5 of
Schedule Q to the financial statements.
We are unable to assess the extent to which the amounts indicated in
paragraphs (iii) are recoverable and the amount in paragraph (ii) is
payable, and accordingly, the effect thereof on the financial
statements cannot be ascertained.
4. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
5. Further to our comments in the Annexure referred to above, we
report that:
a. Except for the matters stated in paragraph 3 above, we have
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 appears from our examination of
those books;
c. The balance sheet, profit and loss account and the cash flow
statement dealt with by this report are in agreement with the books of
account;
d. In our opinion, the balance sheet, profit and loss account and the
cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
e. On the basis of written representations received by the Company
from its directors, we report that as on March 31, 2011 none of the
directors is disqualified from being appointed as a director in terms
of clause (g) of sub-section (1) of section 274 of the Companies Act,
1956;
f. Except for our comments in paragraph 3 above, in our opinion and to
the best of our information and according to the explanations given to
us, the financial statements read together with the notes thereon, give
the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
1. In the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2011;
2. In the case of the profit and loss account, of the Loss of the
Company for the period ended on that date; and
3. In the case of the cash flow statement, of the cash flows of the
Company for the period ended on that date.
ANNEXURE TO THE AUDITOR'S REPORT
(Referred to in paragraph 4 of our report of even date to the members
of Khandwala Securities Limited on the financial statements for the
period from April 1, 2010 to March 31, 2011)
1. The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
Discrepancies have been identified and adjusted/rectified in the
records relating to fixed assets.
2. According to the information and explanations given to us and
having regard to the size of the Company and the nature of its
business, in our opinion the frequency of physical verification of
fixed assets is reasonable
3. None of the fixed assets have been revalued during the year.
4. No substantial part of the fixed assets was disposed off during the
year.
5. According to the information and explanations given to us, the
management has conducted physical verification of inventory held in
physical form during the period, as also at the balance sheet date. In
respect of inventory held in dematerialized form, the holding as at the
balance sheet date has been confirmed by the depositories. In our
opinion, having regard to the nature of the inventories, trie frequency
of physical verification is reasonable.
6. In our opinion, and according to the information and explanations
given to us, the procedures for physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
7. In our opinion, and according to the information and explanations
given to us, the Company has maintained proper records of inventory
during the period. Discrepancies, if any noticed on physical
verification of inventory as compared to book records maintained were
not of a material nature and have been properly dealt with in the books
of account.
8. The company has not granted any loans, secured or unsecured during
the period.
9. The rate of interest and the other terms and conditions are prima
facie not prejudicial to the interest of the company
10. As the company has not taken any loans, secured or unsecured, from
companies covered u/s 301 of the Companies Act 1956, during the period,
the clause no. 4(iii)(b) and 4(iii)(c) of the Companies (Auditor's
Report) Order, 2003 are not applicable to the company.
11. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventories and fixed assets.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal controls.
12. To the best of knowledge and belief, and according to the
information and explanations given to us, we are of the opinion that
transactions that need to be entered into the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
13. No transactions have been entered during the period in the
register maintained in pursuance of section 301 of the Companies Act,
1956 and based on the audit procedures applied by us and according to
the information and explanations given and the representations made to
us, we have not come across any transaction that need to be entered
into the register maintained in pursuance of section 301 of the
Companies Act, 1956. Accordingly, sub-clause (b) is not applicable.
14. In our opinion and according to information and explanations given
to us, the Company has not accepted any deposits from the public to
which the provisions of Section 58A or Section 58AA of the Companies
Act, 1956 apply.
15. According to the information and explanations given to us, the
Company has an internal audit system. In our opinion, the internal
audit system is adequate with regards to the size of the company and
the nature of its business.
16. According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under
Section 209(1) (d) of the Companies Act, 1956 for any of the activities
of the Company.
17. According to the information and explanations given to us, during
the period the Company was generally regular in depositing with
appropriate authorities, undisputed statutory dues.
18. According to the information and explanations given to us, no
personal expenses have been charged to revenue account.
19. As at the balance sheet date, the Company does not have
accumulated losses. The Company has incurred cash losses in the current
year.
20. According to the information and explanations given to us, the
company has not defaulted in the repayment of dues to financial
institutions and banks.
21. To the best of our knowledge, and according to the information and
explanations given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
22. In our opinion, and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi / mutual benefit
fund / society. Therefore the provisions of paragraph 4(xiii) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the
Company.
23. In respect of the Company's dealings or trading in shares,
securities, debentures and other investments, proper records have been
maintained on a timely basis in respect of the transactions and
contracts during the period under report. Acccrding to the information
and explanations given to us, shares and other securities held as
investments are in the Company's name, except in cases where the same
are in the process of being transferred in its name.
24. According to the information and explanations given to us, the
company has not given guarantees for loans taken by others from banks
which are prima facie prejudicial to the interest of the company.
25. According to the information and explanations given to us, the
Company had applied term loans availed for the purpose for which they
were obtained.
26. In our opinion and according to the information and explanations
given to us, and on an overall examination of the balance sheet of the
Company, prima facie, no funds raised on short-term basis have been
applied for long-term investments and vice versa.
27. According to the information and explanations given to us, during
the period under report, the Company has not made preferential
allotments of equity shares to persons listed in the register
maintained under Section 301 of the Companies Act, 1956.
28. As the company did not have any debentures outstanding during the
year, the clause no. 4(xix) of Companies (Auditor's Report) Order, 2003
is not applicable to the company.
29. The Company has not made any public issue of shares or debentures
during the period; accordingly, the question of disclosure of end use
of proceeds of public issues does not arise.
30. The company is not a sick industrial company within the meaning of
clause (o) of sub-section (1) of Section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985(1 of 1986).
31. During the course of our examination of the books and . records
of the Company, carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
period, nor have we been informed of such case by the management.
For Udyen Jain & Associates
Chartered Accountants
Aniket Kulkarni
Partner
M.No:-A 127246
Firm Registration No. 116336W
Date : 27th May 2011
Place: Mumbai
Mar 31, 2010
1. We have audited the attached Balance Sheet of Khandwala Securities
Limited as at March 31, 2010 and also the profit and Loss Account and
the Cash Flow Statement for the period from April 1, 2009 to March 31,
2010 annexed thereto (all together referred to as financial
statements). These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and signifcant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. (i) The Company had advanced application money towards purchase of
shares of Rs. 216.69 lacs, which is outstanding for a period more than
96 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. The company has already initiated legal proceeding against
the investee for the recovery of the share application money. Please
refer note 3 of Schedule Q to the financial statements.
(ii) Short-term deposits availed from companies, together with interest
accrued thereon-aggregating Rs 250.45 lacs as of the balance sheet
date, and are subject to confrmation and consequential adjustments, if
any. Please refer note 4 of Schedule Q to the financial statements.
(iii) Loans/Deposits placed with companies, aggregating Rs. 530 lacs,
and certain interest accrued aggregating Rs. 135.80 lacs as at the
balance sheet dated 31st March 2010, are subject to confrmation and
consequential adjustments, if any. No provision for interest receivable
has been made from the deposits for the year. Please refer note 5 of
Schedule Q to the financial statements.
We are unable to assess the extent to which the amounts indicated in
paragraphs (iii) are recoverable and the amount in paragraph (ii) is
payable, and accordingly, the effect thereof on the financial statements
cannot be ascertained.
4. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specifed in paragraphs 4 and 5 of the said
Order.
5. Further to our comments in the Annexure referred to above, we
report that:
a. Except for the matters stated in paragraph 3 above, we have
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 appears from our examination of
those books;
c. The balance sheet, profit and loss account and the cash flow
statement dealt with by this report are in agreement with the books of
account;
d. In our opinion, the balance sheet, profit and loss account and the
cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
e. On the basis of written representations received by the Company
from its directors, we report that as on March 31, 2010 none of the
directors is disqualifed from being appointed as a director in terms of
clause (g) of sub-section (1) of section 274 of the Companies Act,
1956;
f. Except for our comments in paragraph 3 above, in our opinion and to
the best of our information and according to the explanations given to
us, the financial statements read together with the notes thereon, give
the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
1. In the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2010;
2. In the case of the profit and loss account, of the Loss of the
Company for the period ended on that date; and
3. In the case of the cash fow statement, of the cash fows of the
Company for the period ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 4 of our report of even date to the members
of Khandwala Securities Limited on the financial statements for the
period from April 1, 2009 to March 31, 2010)
1. The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
Discrepancies have been identifed and adjusted/rectifed in the records
relating to fixed assets.
2. According to the information and explanations given to us and
having regard to the size of the Company and the nature of its
business, in our opinion the frequency of physical verifcation of fixed
assets is reasonable
3. None of the fixed assets have been revalued during the year.
4. No substantial part of the fixed assets was disposed off during the
year.
5. According to the information and explanations given to us, the
management has conducted physical verifcation of inventory held in
physical form during the period, as also at the balance sheet date. In
respect of inventory held in dematerialized form, the holding as at the
balance sheet date has been confrmed by the depositories. In our
opinion, having regard to the nature of the inventories, the frequency
of physical verifcation is reasonable.
6. In our opinion, and according to the information and explanations
given to us, the procedures for physical verifcation of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
7. In our opinion, and according to the information and explanations
given to us, the Company has maintained proper records of inventory
during the period. Discrepancies, if any noticed on physical
verifcation of inventory as compared to book records maintained were
not of a material nature and have been properly dealt with in the books
of account.
8. The company has not granted any loans, secured or unsecured during
the period.
9. The rate of interest and the other terms and conditions are prima
facie not prejudicial to the interest of the company
10. As the company has not taken any loans, secured or unsecured, from
companies covered u/s 301 of the Companies Act 1956, during the period,
the clause no. 4(iii)(b) and 4(iii)(c) of the Companies (Auditors
Report) Order, 2003 are not applicable to the company.
11. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventories and fixed assets. During
the course of our audit, we have not observed any continuing failure to
correct major weakness in internal controls.
12. To the best of knowledge and belief, and according to the
information and explanations given to us, we are of the opinion that
transactions that need to be entered into the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
13. No transactions have been entered during the period in the
register maintained in pursuance of section 301 of the Companies Act,
1956 and based on the audit procedures applied by us and according to
the information and explanations given and the representations made to
us, we have not come across any transaction that need to be entered
into the register maintained in pursuance of section 301 of the
Companies Act, 1956. Accordingly, sub-clause (b) is not applicable.
14. In our opinion and according to information and explanations given
to us, the Company has not accepted any deposits from the public to
which the provisions of Section 58A or Section 58AA of the Companies
Act, 1956 apply.
15. According to the information and explanations given to us, the
Company has an internal audit system. In our opinion, the internal
audit system is adequate with regards to the size of the company and
the nature of its business.
16. According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under
Section 209(1) (d) of the Companies Act, 1956 for any of the activities
of the Company.
17. According to the information and explanations given to us, during
the period the Company was generally regular in depositing with
appropriate authorities, undisputed statutory dues.
18. According to the information and explanations given to us, no
personal expenses have been charged to revenue account.
19. As at the balance sheet date, the Company does not have
accumulated losses. The Company has incurred cash losses in the current
year.
20. According to the information and explanations given to us, the
company has not defaulted in the repayment of dues to financial
institutions and banks.
21. To the best of our knowledge, and according to the information and
explanations given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
22. In our opinion, and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi / mutual benefit
fund / society. Therefore the provisions of paragraph 4(xiii) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
23. In respect of the Companys dealings or trading in shares,
securities, debentures and other investments, proper records have been
maintained on a timely basis in respect of the transactions and
contracts during the period under report. According to the information
and explanations given to us, shares and other securities held as
investments are in the Companys name, except in cases where the same
are in the process of being transferred in its name.
24. According to the information and explanations given to us, the
company has not given guarantees for loans taken by others from banks
which are prima facie prejudicial to the interest of the company.
25. According to the information and explanations given to us, the
Company had applied term loans availed for the purpose for which they
were obtained.
26. In our opinion and according to the information and explanations
given to us, and on an overall examination of the balance sheet of the
Company, prima facie, no funds raised on short-term basis have been
applied for long-term investments and vice versa.
27. According to the information and explanations given to us, during
the period under report, the Company has not made preferential
allotments of equity shares to persons listed in the register
maintained under Section 301 of the Companies Act, 1956.
28. As the company did not have any debentures outstanding during the
year, the clause no. 4(xix) of Companies (Auditors Report) Order, 2003
is not applicable to the company.
29. The Company has not made any public issue of shares or debentures
during the period; accordingly, the question of disclosure of end use
of proceeds of public issues does not arise.
30. The company is not a sick industrial company within the meaning of
clause (o) of sub-section (1) of Section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985 (1 of 1986).
31. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
period, nor have we been informed of such case by the management.
For Udyen Jain & Associates
Chartered Accountants
Aniket Kulkarni
Partner
M.No:- A 127246
Date: 09th August 2010
Place: Mumbai