Mar 31, 2022
To the Members of Shriram City Union Finance LimitedREPORT ON THE AUDIT OF STANDALONE FINANCIALSTATEMENTSOPINION
1. We have audited the accompanying Standalone Financial Statements of Shriram City Union Finance Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2022 and the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and the Statement of Cash Flows for the year then ended and Notes to the Financial Statements, including a summary of the Significant Accounting Policies and other explanatory information hereinafter referred to as Financial Statements
2. 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 Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, the Profit (Including Other Comprehensive Income), the Statement of changes in Equity, and its cash flows for the year ended on that date.
3. We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs) specified under section 143 (10) of the Act.Our responsibilities under those Standards are further described in the Auditorsâ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. 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. Attention is drawn to Note No 68.8 to the Financial statements which describe the fact that the additional ECL provision on account of COVID-19 is made based on the Companyâs historical experience, collection efficiencies till date, internal assessment on the impacted segments and other emerging forward-looking factors on account of the pandemic. However, the actual impact may vary due to prevailing uncertainty caused by the pandemic. The Companyâs management is continuously monitoring the situation and the economic factors affecting the operations of the Company. Further, the extent to which the COVID-19 pandemic will impact the Companyâs Financial Performance is dependent on future developments, which are highly uncertain
Our opinion is not modified in respect of the above matter.
5. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Statements of the year under report. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to be communicated in our report.
Sr. No. |
Key Audit Matter |
Auditor''s Response |
Impairment and Write-offs The Recognition and Measurement of Impairment and Write-off of Loans and Advances involves estimates, management judgements and appropriate processing of information from the IT systems because of which the same has been identified as a key audit matter. |
Our key audit procedures included: ⢠We test checked the computation of the Probable default (PD) which denotes the statistical pattern of occurrence of defaults in individual accounts over a period of past five years. ⢠We also test checked the computation of the ratio of Loss Given Default (LGD) which denotes the non-recoveries (after considering the collections) till the date of Balance Sheet. ⢠We reviewed the changes made by the management in estimating the PD and the LGD on the background of COVID 19 outbreak and additional ECL provisions made on the basis of above revisions. ⢠We examined the computation of Impairment Losses by application of PD and LGD and ensured that the entire pool of Loans and advances has been considered for the same. ⢠We reviewed the Internal financial controls over data extraction and data validation from the ERP system for computation of PD and LGD with the participation of our internal IT expert. ⢠We performed analytical procedures for ascertaining of reasonableness of Impairment provisions. ⢠We carried out a combination of procedures involving enquiry and observation, re-performance on a test basis and inspection of evidence in respect of computation of provisions including considering the situations where additional impairment was required for individual accounts and review of procedures and practices, justification notes and approvals in case of Bad Debts written off. ⢠Our audit procedures did not reveal any significant inconsistencies with respect to provisions for impairment and write-offs. |
|
ii |
Assessment of Provisions and Contingent liabilities in respect of certain litigations including Direct and Indirect Taxes, various claims led by other parties not acknowledged as debt (Note No. 41 to the financial statements): There is high level of judgement required in estimating the level of provisioning. The companyâs assessment is supported by the facts of matter, their own judgment, past experience, and advice from legal and independent tax consultants wherever considered necessary. Accordingly, unexpected adverse outcomes may significantly impact the Companyâs reported profit and state of affairs presented in the Balance Sheet. |
Our audit approach involved: Obtaining an understanding of internal controls relevant to the audit in order to design our audit procedures that are appropriate in the circumstances; a. Understanding the current status of the litigations/ tax assessments; b. Examining recent orders and/or communication received from various tax authorities/ judicial forums and follow up action thereon; c. Evaluating the merit of the subject matter under consideration with reference to the grounds presented therein and available independent legal / tax advice |
Sr. No. |
Key Audit Matter |
Auditor''s Response |
We determined the above area as a Key Audit Matter in view of associated uncertainty relating to the outcome of these matters which requires application of judgment in interpretation of law. Accordingly, our audit was focused on analysing the facts of subject matter under consideration and judgments/ interpretation of law involved |
d. Review and analysis of evaluation of the contentions of the Company through discussions, collection of details of the subject matter under consideration, the likely outcome and consequent potential outflows on those issues; and verification of disclosures related to significant litigations and taxation matters. |
INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITOR''S REPORT THEREON
6. The Companyâs Board of Directors is responsible for the other information. The other information included in the Companyâs annual report like Management Discussion and Analysis, Directorâs Report and Corporate Governance Report, but does not include the Standalone Financial Statements and our auditorsâ report thereon which we obtained prior to the date of this auditorâs report, and Annual Report, which is expected to be made available to us after that date.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance or conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements, or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE FINANCIAL STATEMENTS
7. The Companyâs Board of Directors is responsible for the matters stated in Section 134 (5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the Financial Position, Financial Performance (including Other Comprehensive Income), Changes in Equity 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 the Companies (Indian Accounting Standards) Rules 2015. This responsibility also includes maintenance 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.
In preparing the Financial Statements, the Board of Directors is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
AUDITORS'' RESPONSIBILITIES FOR THE AUDIT OF THEFINANCIAL STATEMENTS
8. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorsâ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the Company has adequate Internal Financial Controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors'' report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors'' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the Financial Statements, including the
disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation. Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Financial Statements. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings including any significant deficiencies in Internal Control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
9. The comparative financial Statements of the Company for the year ended March 31,2021 included in Standalone Financial Statements, were audited by the then Statutory Auditors "G.D. Apte & Co., Chartered Accountants" for the year ended March 31, 2021 whose reports dated April 30, 2021 expressed an unmodified opinion on those financial statements. Our opinion is not modified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS
10. As required by the Companies (Auditorsâ Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143 (11) of the Companies Act, 2013, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
11. 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 (including Other Comprehensive Income), the Statement of Changes in Equity 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 Ind AS prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;
e) On the basis of the written representations received from the Directors as on March 31,2022 and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31,2022 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".
g) With respect to the other matters to be included in the Auditorsâ Report in accordance with the requirements of Section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.
h) With respect to the other matters to be included in the Auditorsâ 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 has disclosed the impact of pending litigations on its financial position in its financial statements. Refer note 41 to the Financial Statement
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts. The Company does not have derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the company.
iv. (a) The management has represented that,
to the best of the knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities Identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries ; and (c) Based on such audit procedures we have considered reasonable and appropriate in the circumstances, nothing has come to the notice that has caused us to believe that the representations under sub-clause 11(h)(iv)(a) and (b) contain any material misstatement.
v. As stated in Note 24 to the standalone financial statements :
(a) The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with Section 123 of the Act, as applicable.
(b) The interim dividend declared and paid by the Company during the year and until the date of this report is in compliance with Section 123 of the Act.
(c) The Board of Directors of the Company have not proposed any final dividend for the year.
For R. Subramanian and Company LLP For Abarna & Ananthan
Chartered Accountants Chartered Accountants
FRN: 004137S/S200041 FRN- 000003S
CA K. Jayasankar CA (Mrs) Lalitha Rameswaran
Partner Partner
M No 014156 M No 207867
UDIN: 22014156AICEAR6843 UDIN: 22207867AIZNCU9979
Place: Chennai
Date: April 29, 2022
Mar 31, 2019
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
1. Opinion
We have audited the accompanying standalone financial statements of Shriram City Union Finance Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2019, the statement of Profit and Loss, statement of Changes in Equity and statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
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 Companies Act, 2013, as amended (âthe Actâ) 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 March 31, 2019, the profit, changes in equity and its cash flows for the year ended on that date.
2. Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143 (10) of the Act. Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Financial Statementsâ section of our report. We are independent of the Company in accordance with the âCode of Ethicsâ issued by the Institute of Chartered Accountants of India (âthe ICAIâ) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current year. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report:
Sr. No |
Key Audit Matter |
Auditors Response |
1 |
Transition date accounting policies Effective 1 April 2018, the Company has adopted the Indian Accounting Standards (âInd ASâ) notified by the Ministry of Corporate Affairs with the transition date of 1 April 2017. The following are the major impact areas for the Company upon transition: - Business model assessment - Classification and measurement of financial assets and financial liabilities - Measurement of loan losses (expected credit losses) - Accounting for assignment - Accounting for loan fees and costs - Accounting for actuarial gain / loss on post employment benefit Migration to the new accounting framework (Ind AS) is a complicated process involving multiple decision points upon transition. Ind AS 101, First Time Adoption prescribes choices and exemptions for first time application of Ind AS principles at the transition date. We identified transition date accounting as a key audit matter because of significant degree of management judgment and application on the areas noted above. |
Our key audit procedures included: Design / controls - Assessing the design, implementation and operating effectiveness of key internal controls over managementâs evaluation of transition date choices and exemptions availed in line with the principles under Ind AS 101. - We have also confirmed the approval of Audit Committee for the choices and exemptions made by the Company for compliance / acceptability under Ind AS 101. Substantive tests - Evaluated managementâs transition date choices and exemptions for compliance / acceptability under Ind AS 101. - Understood the methodology implemented by management to give impact on the transition and tested the computation. - Assessed areas of significant estimates and management judgment in line with principles under Ind AS. - Evaluated the adequacy of the disclosure required by Ind AS 101 |
2 |
Impairments and Write Offs The Recognition and measurement of Impairment and Write Off of Loans and Advances involves estimates, management judgments and appropriate processing of information from the IT Systems because of which the same has been identified as a key audit matter |
Our key audit procedures included: - We test checked the computation of the ratio of the Probable Default (PD) which denotes the statistical pattern of occurrence defaults in individual accounts over a period five years. - We also test checked the computation of the ratio of the Loss Given Default (LGD) which denotes the non-recoveries (after considering the collections) till the date of Balance Sheet. - We reviewed the Internal financial controls and ERP system controls over data extraction and data validation from the ERP System for computation of PD and LGD with the participation of our internal IT Expert - We examined the computation of the Impairment Losses by application of PD and LGD and ensured that the entire pool of Loans and advances has been considered for the same. - We Performed analytical procedures for ascertaining of reasonableness of Impairment provisions - We carried out a combination of procedures involving enquiry and observation, re-performance on a test basis and inspection of evidence in respect of computation of provisions including considering the situations where additional impairment was required for individual accounts and review of procedures and practices, justification notes and approvals in case of Bad Debts written Off. |
4. Information Other than the Standalone Financial Statements and Auditorâs Report Thereon
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, the Report of the Board of Directors and the Report on the Corporate Governance but does not include the standalone financial statements and our auditorâs report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
5. Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134 (5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance 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 misstatements, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
6. Auditorâs Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
7. Other Matter
The comparative financial information of the Company for the year ended March 31, 2019 and the transition date opening Balance Sheet as at April 01, 2017 included in these Standalone Financial Statements, are based on the previously issued statutory financial statements prepared in accordance with the Accounting Standards Specified under Section 133 of the Act read with relevant rules issued there under and other accounting principles generally accepted in India audited by us in our report for the year ended March 31, 2018 dated April 26, 2018 and predecessor auditor whose report for the year ended March 31, 2017 dated May 2, 2017 respectively expressed an unmodified opinion on those Standalone Financial Statements; as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
Our opinion is not modified in respect of this matter.
8. Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1,â a statement on the matters specified in paragraphs 3 and 4 of the said Order, to the extent applicable.
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, the Statement of Changes in Equity 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 Indian 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 March 31, 2019, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019, 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 âAnnexure 2â to this report.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 (16) of the Act.
(h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 46 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.
(c) According to the information and explanations given by the management and based on our verification we report that the title deeds of immovable properties included in property, plant and equipment are held in the name of the company.
(ii) The Companyâs business does not involve inventories and accordingly, the requirements under paragraph 3 (ii) of the Order are not applicable to the Company.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the Order are not applicable to the Company.
(iv) Based on the audit procedures conducted by us and according to the information and explanations given to us, we are of the opinion that the provisions of section 185 of the Act have been complied with by the Company and the provisions of section 186 of the Act are not applicable to the Company.
(v) In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India and the provisions of section 73 to 76 and other relevant provisions of the Act and the rules framed there under, to the extent applicable, have been complied with. We were informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vi) According to the information and explanations given to us, the Central Government has not specified the maintenance of cost records under section 148 (1) of the Act.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, goods and services tax, duty of customs, value added tax, cess and other material statutory dues applicable to it. According to the information and explanations given to us and from the records of the company, there were no undisputed statutory dues as at the last day of the financial year which were outstanding for a period of more than six months from the date they became payable.
(b) According to the records of the Company, the dues outstanding of income-tax, value added tax and service tax dues disputed by the Company, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs. In lacs) |
Period to which the amount relates |
Forum where dispute is pending |
Kerala Value Added Tax, 2003 |
Value Added Tax |
4.65 |
AY 2007-08 |
Dy. Commissioner (Appeals) Ernakulum, Kerala |
Karnataka Value Added Tax, 2003 |
Value Added Tax |
6.50 |
Assessment Year 201112 to 2012-13 |
Joint Commissioner Commercial Tax (Appeals), Bengaluru, Karnataka |
Finance Act, 1994 |
Service Tax |
3,630.00 |
April 2008 to September 2014 |
Customs, Excise and Service Tax Appellate Tribunal |
Income Tax Act, 1961 |
Income Tax |
864.14 |
AY 2016-17 |
Commissioner of Income Tax (Appeals) |
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank or government or dues to debenture holders.
(ix) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, the Company has not raised any money by way of initial public offer or further public offer. Further, monies raised by the Company by way of debt instruments and term loans were applied for the purpose for which those were raised, though funds which were not required for immediate utilization were invested during intervening period.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given to us, we report that no fraud by the Company or fraud on the Company by the officers and employees of the Company has been noticed or reported during the year except fraud of Rs. 12.40 lacs in the nature of misappropriation of funds by an employee against whom the company has initiated legal course of action.
(xi) According to the information and explanations given to us, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company
(xiii) According to the information and explanations given to us, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of the Act.
(xvi) According to the information and explanations given to us, we report that the Company has registered as required, under section 45-IA of the Reserve Bank of India Act, 1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âThe Actâ)
We have audited the internal financial controls over financial reporting of Shriram City Union Finance Limited (âthe Companyâ) as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
MANAGEMENTâS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Companyâs 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 controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (Guidance Note) issued by the Institute of Chartered Accountants of India (ICAI). 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 the Companyâs 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.
AUDITORâS RESPONSIBILITY
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the ICAI. 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 were 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 their 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 auditorâs judgement, 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 internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A companyâs 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 companyâs 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 companyâs 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 controls 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 has, 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 March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note issued by the ICAI.
For G. D. Apte & Co.
Chartered Accountants
Firm Registration Number: 100 515W
Umesh S Abhyankar
Partner
Membership Number: 113 053
Place: Chennai
Date: April 24, 2019
Mar 31, 2018
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Shriram City Union Finance Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, 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.
MANAGEMENTâS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation 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 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 and the Companies (Accounting Standards) Amendment Rules, 2016. This responsibility also includes maintenance 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 the design, implementation and maintenance of adequate internal financial control 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.
AUDITORâS 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, issued by the Institute of Chartered Accountants of India, as 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 disclosures in the financial statements. The procedures selected depend on the auditorâs 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 Companyâs 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 accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 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 March 31, 2018, 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 (Auditorâs report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â a statement on the matters specified in paragraphs 3 and 4 of the said 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 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 it appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss, and 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 and the Companies (Accounting Standards) Amendment Rules, 2016;
(e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, 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 âAnnexure 2â to this report;
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note No. 27 to the standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
ANNEXURE1
Referred to in paragraph 1 under the heading âReport on Other Legal and Regulatory Requirementsâ of our report of even date to the members of the Company for the year ended March 31, 2018.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment/ fixed assets are held in the name of the company.
(ii) The Companyâs business does not involve inventories and, accordingly, the requirements under paragraph 3(ii) of the Order are not applicable to the Company and hence not commented upon.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) Based on the audit procedures conducted by us and according to the information and explanations given to us, we are of the opinion that the provisions of section 185 of the Act have been complied with by the Company and the provisions of section 186 of the Act are not applicable to the Company.
(v) In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India and the provisions of section 73 to 76 and other relevant provisions of the Act and the rules framed there under, to the extent applicable, have been complied with. We were informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vi) According to the information and explanations given to us, the Central Government has not specified the maintenance of cost records under section 148(1) of the Act.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, service tax, goods and services tax, duty of customs, value added tax, cess and other material statutory dues applicable to it. According to the information and explanations given to us and from the records of the Company, there were no undisputed statutory dues as at the last day of the financial year which were outstanding for a period of more than six months from the date they became payable.
(b) According to the records of the Company, the dues outstanding of income-tax, value added tax and service tax dues disputed by the Company, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs. In lacs) |
Period to which the amount relates |
Forum where dispute is pending |
Kerala Value Added Tax, 2003 |
Value Added Tax |
4.65 |
AY 2007-08 |
Dy. Commissioner (Appeals) Ernakulum, Kerala |
Kerala Value Added Tax, 2003 |
Value Added Tax |
0.72 |
AY 2011-12 |
Dy. Commissioner (Appeals) Ernakulum, Kerala |
Finance Act, 1994 |
Service Tax |
3,630.00 |
April 2008 to September 2014 |
Customs, Excise and Service Tax Appellate Tribunal |
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank or government or dues to debenture holders.
(ix) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, the Company has not raised any money by way of initial public offer or further public offer. Further, monies raised by the Company by way of debt instruments and term loans were applied for the purpose for which those were raised, though funds which were not required for immediate utilization were invested during intervening period.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given to us, we report that no fraud by the Company or fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given to us, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company.
(xiii) According to the information and explanations given to us, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of the Act.
(xvi) According to the information and explanations given to us, we report that the Company has registered as required, under section 45-IA of the Reserve Bank of India Act, 1934.
For G D Apte & Co
Chartered Accountants
Firm Registration No. 100515W
U.S.Abhyankar
Partner
Membership No. : 113053
Place: Chennai
Date: April 26, 2018
Mar 31, 2017
INDEPENDENT AUDITORâS REPORT
To the Members of SHRIRAM CITY UNION FINANCE LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Shriram City Union Finance Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation 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.
Auditorâs 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 there under.
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 auditorâs 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 Companyâs 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 Companyâs 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 31st March, 2017, and its profit/loss and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2017 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure âAâ, a statement on the matters specified in paragraphs 3 and 4 of the said 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 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,
2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st 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 âAnnexure Bâ.
g) With respect to the other matters to be included in the Auditorâs 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 has disclosed the impact of pending litigations which would impact its financial position in its financial statements
- Refer Note No 27 to the financial statements;
ii. The Company did not have any long-term 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
iv. The Company has provided disclosures in Note 53 in the standalone financial statements in respect of holding of Specified Bank Notes (SBNs) on November 8, 2016 and on December 30, 2016 as well as dealings in the said SBNs during the period from November 9, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including those in SBNs, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced before us. As per information and explanations given to us and as stated in the said note 53, borrowers of the Company have further directly deposited cash in the Companyâs bank accounts and that denomination wise details of such deposits are not available with the Company.
Report under The Companies (Auditorâs Report) Order, 2016
As required by the Companies (Auditorâs Report) Order, 2016 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in this Annexure, a statement on the matters specified in paragraphs 3 and 4 of the said Order.
i. (a) According to the information and explanations given to us and records produced before us, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) According to the information and explanations given to us and records produced before us, the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such physical verification.
(c) According to the information and explanations given to us and records produced before us, the title deeds of all the immovable properties are held in the name of the company.
ii. The Company is engaged in financing activities which does not involve maintenance of any inventory.
iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to Companies, Firms, Limited Liability partnerships or other parties covered in the register maintained under Section 189 of the Act.
iv. According to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Companies Act, 20l3 in respect of loans, investments, guarantees, and security.
v. In respect of deposit and according to the information and explanations given to us, the Company complied with the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under, where applicable. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal in this regard in respect of the company.
vi. According to the information and explanations given to us the Central Government has not prescribed maintenance of cost records under Section 148(1) of the Act.
vii. (a) According to the information and explanations
provided to us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities and there are no dues payable as at the year end with such authorities.
(b) According to the information and explanations given to us and the relevant documents produced before us, the following dues outstanding in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Value Added Tax and Cess have not been deposited on account of dispute -
viii. Based upon the audit procedures and according to the information and explanations provided to us, the company has not defaulted in repayment of loans or borrowing to financial institution, bank, government or dues to debenture holders.
Statute |
Nature of Dues |
Amount '' lacs |
Years to which the amount relates |
Forum where dispute is pending |
Income Tax, 1961 |
Income Tax demands |
40.78 |
Assessment Year 2011-12 |
ITAT, Chennai, Tamilnadu |
Kerala Value Added Tax, 2003 |
Value Added Tax |
4.65 |
Assessment Year 2007-08 |
Dy. Commissioner (Appeals) Ernakulum, Kerala |
Kerala Value Added Tax, 2003 |
Value Added Tax |
0.72 |
Assessment Year 2011-12 |
Asst. Commissioner (Appeals) Ernakulum, Kerala |
ix. In our opinion and to the best of our knowledge and belief and according to the information and explanations given to us, the company has not raised money by way of initial public offer or further public offer (including debt instruments). The Company has obtained term loans from the Banks and the same were applied for the purposes for which those were raised.
x. We have been informed that during the period under audit certain borrowers/employees have defrauded the company by pledging stolen/spurious gold against gold loans and producing fake documents against other loans total amounting to Rs, 222.98 lacs. The Company has taken necessary action against the said borrowers. Refer Note 29 of the financial statements.
xi. Based on our audit procedures and as per information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.
xii. In our opinion the Company is not a Nidhi Company.
xiii. According to the information and explanations given to us, the Company has complied with section 177 and 188 of Companies Act, 2013 where applicable in respect of all transactions with the related parties and the details have been disclosed in the Financial Statements etc. as required by the applicable accounting standards
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
xv. According to the information and explanations given to us the company has not entered into any non-cash transactions with directors or persons connected with him
xvi. According to the information and explanations given to us the company is registered under section 45 IA of the Reserve Bank of lndia Act, 1934
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
Annexure referred to in paragraph 2 (f) under the heading âReport on other legal and regulatory requirementsâ in the independent auditor''s report of even date.
We have audited the internal financial controls over financial reporting of Shriram City Union Finance Limited (âthe Companyâ) as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on âthe 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 Indiaâ. 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 companyâs 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) 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 their 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 auditorâs 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs 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 companyâs internal financial control over financial reporting includes those policies and procedures that
- pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
- 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 authorizations of management and directors of the company; and
- provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs 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 has, 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 March 31, 2017, based on âthe 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 Indiaâ.
For Pijush Gupta & Co.
Chartered Accountants
Firm Registration Number: 309015E
Pijush Kumar Gupta
Place: Chennai Partner
Date: May 02,2017. Membership No. 015139
Mar 31, 2015
We have audited the accompanying standalone financial statements of
SHRIRAM CITY UNION FINANCE LIMITED (the Company), which comprise the
Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss
and the Cash Flow Statement for the year then ended and a summary of
the 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 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.
3) Auditor''s 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
there under.
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
financial 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 standalone 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.
4) Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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 31st March, 2015, its profit and its 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 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 paragraphs 3 and 4 of the said 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 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.
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 has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 27 to the
financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
I. (a) According to the information and explanations given to us and
records produced before us, the Company has maintained proper records
showing full particulars including quantitative details and situation
of fixed assets.
(b) According to the information and explanations given to us and
records produced before us, the fixed assets have been physically
verified by the management at reasonable intervals and no material
discrepancies were noticed on such physical verification.
II. The Company is engaged in financing activities which does not
involve maintenance of any inventory.
III. As per the information and explanations given to us the Company
has granted loans, secured or unsecured, to companies, firms or other
parties listed in the register maintained under section 189 of the
Companies Act, 2013 (the Act). In respect of the same,
(a) The receipts of principal is regular, and
(b) There is no overdue amount as at the end of the year.
IV In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business for
purchase of fixed assets. During the course of our audit, we have not
observed any major weakness or continuing failure to correct any major
weakness in the internal control system of the Company in respect of
these areas. There is no sale of goods or service or purchase of
inventory.
V In respect of deposits accepted, in our opinion and according to the
information and explanations given to us, the directives issued by the
Reserve Bank of India and the provisions of sections 73 to 76 or any
other relevant provisions of the Act and the rules framed thereunder,
to the extent applicable, have been complied with. According to the
information and explanation given to us, no order has been passed by
the Company Law Board, the National Company Law Tribunal or the Reserve
Bank of India or any Court or any other Tribunal in this regard in
respect of the Company.
VI. To best of our knowledge and according to the information and
explanations given to us the Central Government has not prescribed
maintenance of cost records under Section 148(1) of the Act for the
Company.
VII. (a) According to the information and explanations provided to us,
the Company is regular in depositing with appropriate authorities
undisputed statutory dues including Provident Fund, Wealth Tax, Service
Tax, Income Tax, Excise Duty, Custom Duty, Sales Tax, Cess, Value Added
Tax, Employees'' State Insurance and other material statutory dues
applicable to it. There are no undisputed amounts that were outstanding
for a period of more than six months from the date they became payable.
(b) On the basis of information and explanations given to us and the
relevant documents produced before us, the following dues outstanding
in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Value
Added Tax and Cess have not been deposited on account of dispute -
Name of the statute Nature of dues Amount
(Rs. in lacs)
Income Tax Act 1961 Income Tax demands 2,337.47
Income Tax Act 1961 Income Tax demands 1,530.54
Income Tax Act 1961 Income Tax demands 963.23
Kerala VAT Value Added Tax 4.65
Name of the Statute Years to which the Pending with
amount relates
Income Tax Act 1961 Assessment year
2012-13 CIT (Appeal)
Income TAx Act 1961 Assessment year ITAT
2011-12
Income Tax Act 1961 Assessment year ITAT
2010-11 IIAI
Kerala VAT Assessment Year Dy. C.I.T.(Appeal)
2007-08
(c) According to the information and explanations given to us the
amount required to be transferred to the Investor Education and
Protection Fund in accordance with the relevant provisions of the
Companies Act 1956 (1 of 1956) and rules made there under has been
transferred in time.
VIII. The Company has no accumulated losses at the end of financial
year and has not incurred cash losses in the current and immediately
preceding financial year.
IX. Based on our audit procedures and as per information and
explanations given by the management, it appears that the Company has
not defaulted in the repayment of dues to banks, financial institutions
or debenture holders.
X. In our opinion and 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. In our opinion and to the best of our knowledge and belief and
according to the information and explanations given to us, term loans
availed by the Company were, prima facie, utilised during the year for
the purposes for which the loans were obtained other than funds
temporarily parked pending utilization of the funds for the intended
use.
XII. We have been informed that during the audit period certain
borrowers/employee have defrauded the Company by pledging low purity
and stolen Gold against Jewel Loan amounting to Rs. 704.06 lakhs. The
Company has taken necessary action against the said borrowers/employee.
Refer Note 30 to the financial statements.
For Pijush Gupta & Co.
Firm Registration
No. 309015E
Chartered Accountants
Ramendra Nath Das
Place: Chennai Partner
Date: 28th April 2015 Membership No. 014125
Mar 31, 2014
We have audited the accompanying financial statements of SHRIRAM CITY
UNION FINANCE LIMITED ("the Company"), which comprise the Balance Sheet
as at March 31, 2014 and the Statement of Profit and Loss and the Cash
Flow Statement respectively for the year then ended and a summary of
significant accounting policies and other explanatory information
incorporated in the Schedules and Notes to Accounts.
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 and cash flows 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 of the financial statements that give a true view and
are free from material misstatement, whether due to fraud or error.
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.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Profit and Loss Account, of the Profit/loss for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditor''s Report) Order, 2003, as
amended by the Companies (Auditor''s Report) (Amendment) Order, 2005
("the Order") 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 said
Order.
2. 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 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Act;
e. On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section274 of the Act.
Re: SHRIRAM CITY UNION FINANCE LIMITED ("the company")
Financial Year Ended March 31, 2014
I. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) According to the information and explanations given to us, the fixed
assets have been physically verified by the management at reasonable
intervals and no material discrepancies were noticed on such physical
verification.
(c) There was no disposal of substantial part of its fixed assets during
the year.
II. The Company is engaged in financing activities which does not
involve maintenance of any inventory.
III. As per the information and explanations given to us the Company
has not granted/taken any loans, secured or unsecured, to/from
companies, firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956 (the Act).
I V. 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 for purchase of fixed assets. During the course of our audit,
we have not observed any major weakness or continuing failure to
correct any major weakness in the internal control system of the
Company in respect of these areas. There is no sale of goods or service
or purchase of inventory.
V. According to the information and explanations provided by the
management there are no contracts or arrangements referred to in
Section 301 of the Act, the particulars of which need to be entered
into the register maintained under the said Section.
VI. In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, the directives issued by
the Reserve Bank of India and the provisions of sections 58A, 58AA or
any other relevant provisions of the Act and the rules framed there
under, to the extent applicable, have been complied with. According to
the information and explanation given to us, no order has been passed
by the Company Law Board, the National Company Law Tribunal or the
Reserve Bank of India or any Court or any other Tribunal in this regard
in respect of the Company.
VII. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
VIII. According to the information and explanations given to us the
Central Government has not prescribed maintenance of cost records for
the Company under Section 209(1)(d) of the Act.
IX. (a) According to the information and explanations provided to us,
the Company is regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, service tax, income
tax, and other material statutory dues applicable to it and there are
no dues payable in respect of Employees'' State Insurance, Investor
Education and Protection Fund, Excise duty, Custom Duty and Sales Tax,
Cess and any other statutory dues with appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of statutory dues were
outstanding at the year-end for a period of more than six months from
the date they became payable.
Name of the
statute Nature of dues Amount Years
to which the Pending
with
(Rs. in
lacs) amount
relates
Income Tax
Act
1) Income tax on
demands against
disallowance 3,742.88 Assessment Year
2011-12 C.I.T.
(Appeal)
of certain expenses,
including ESOP,
Provision for
Bad Debts, Royalty,
Transfer to Reserve
Funds etc.
2) Income tax on
demands against
disallowance 1,625.08 Assessment Year
2010-11 C.I.T.
(Appeal)
of certain
expenses, including
ESOP, Provision for
Bad Debts, Royalty,
Transfer to Reserve
Funds etc.
3) Penalty against
amount transferred
to Re- 1,106.48
Assessment Year
2008-09 C.I.T.
(Appeal)
serve Funds.
4) Income tax on
demands against
income from 3,918.88 Assessment Year
2007-08 C.I.T.
(Appeal)
Securitizations and
disallowance u/s 40
(a) (ia);
earlier assessment
order reopened.
Kerala
Value
Added
Tax
1) Demand on account of
sale of Seized vehicle 4.65 Assessment Year
2007-08 Dy
C.I.T
(Appeal)
(c) On the basis of information and explanations given to us and the
relevant documents produced before us, the following dues have not been
deposited on account of dispute Â
X. The Company has no accumulated losses at the end of financial year
and has not incurred cash losses in the current and immediately
preceding financial year.
XI. Based on our audit procedures and as per information and
explanations given by the management, it appears that the Company has
not defaulted in the repayment of dues to banks, financial institutions
or debenture holders.
XII. From our examination of books and records and according to the
information and explanations given to us, it appears that adequate
documents and records are maintained in cases where Company has granted
loans and advances on the basis of security by way of pledge of shares
and other securities.
XIII. In our opinion the company is not a chit fund or a nidhi/mutual
benefit fund/society.
XIV. In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities and debentures and other investments.
X V. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks and financial institutions.
XVI. In our opinion and to the best of our knowledge and belief and
according to the information and explanations given to us, term loans
availed by the company were, prima facie, applied by the company during
the year for the purposes for which the loans were obtained other than
funds temporarily parked pending utilization of the funds for the
intended use.
XVII. According to the information and explanations given to us, and
on overall examination of the books and records of the company and
considering the nature of the business and activity being carried on,
we report that no funds raised on short term basis have been used for
long term investment.
XVIII. The company, during the year has not made any preferential
allotment of equity shares and convertible warrants to parties and
companies covered in the registrar maintained under section 301 the
Act.
XIX. According to the information and explanations given to us, during
the period, the Company has created charge in respect of secured
debentures issued.
XX. The company has disclosed the end use of money raised by public
issues in the Notes to accounts and the same has been verified by us
XXI. Based upon the audit procedures performed for the purpose of
reporting true and fair view of the financial statements and as per the
information and explanations given by the management, we report that no
material fraud on or by the company has been noticed or reported during
the course of our audit.
For Pijush Gupta & Co.
Firm Registration No: 309015E
Chartered Accountants
Ramendra Nath Das
Place: Chennai Partner
Date: April 30, 2014 Membership No: 014125
Mar 31, 2013
We have audited the accompanying financial statements of SHRIRAM CITY
UNION FINANCE LIMITED ("the Company"), which comprise the Balance
Sheet as at March 31,2013 and the Statement of Profit and Loss and the
Cash Flow Statement respectively for the year then ended and a summary
of significant accounting policies and other explanatory information
incorporated in the Schedules and Notes to Accounts.
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 and cash flows 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 of the financial statements that give a true view and
are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in ac- cordance
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 state- ments. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material mis- statement 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. An audit also includes evaluating the
appropriateness of account- ing 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. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2013;
(b) in the case of the Profit and Loss Account, of the profit/loss for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditor''s Report) Order, 2003, as
amended by the Companies (Auditor''s Report) (Amendment) Order, 2005
("the Order") 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 said
Order.
2. 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 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of section 211 of the Act;
e. On the basis of written representations received from the directors
as on March 31,2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31,2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section274 of the Act.
Re: SHRIRAM CITY UNION FINANCE LIMITED ("the company") Financial
Year Ended March 31,2013
I. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) According to the information and explanations given to us, the
fixed assets have been physically verified by the management at
reasonable intervals and no material discrepancies were noticed on such
physical verification.
(c) There was no disposal of substantial part of its fixed assets
during the year.
II. The Company is engaged in financing activities which does not
involve maintenance of any inventory.
III. As per the information and explanations given to us the Company
has not granted/taken any loans, se cured or unsecured, to/from
companies, firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956 (the Act).
IV. 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 for purchase of fixed assets. During the course of our audit,
we have not observed any major weakness or continuing failure to
correct any major weakness in the internal control system of the
Company in respect of these areas. There is no sale of goods or service
or purchase of inventory.
V. According to the information and explanations provided by the
management there are no contracts or arrangements referred to in
Section 301 of the Act, the particulars of which need to be entered
into the register maintained under the said Section.
VI. In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, the directives issued by
the Reserve Bank of India and the provisions of sections 58A, 58AA or
any other relevant provisions of the Act and the rules framed there
under, to the extent applicable, have been complied with. According to
the information and explanation given to us, no order has been passed
by the Company Law Board, the National Company Law Tribunal or the
Reserve Bank of India or any Court or any other Tribunal in this regard
in respect of the Company.
VII. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
VIII. According to the information and explanations given to us the
Central Government has not prescribed maintenance of cost records for
the Company under Section 209(1 )(d) of the Act.
IX. (a) According to the information and explanations provided to us,
the Company is regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, service tax, income
tax, and other material statutory dues applicable to it and there are
no dues payable in respect of Employees'' State Insurance, Investor
Education and Protection Fund, Excise duty, Custom Duty and Sales Tax,
Cess and any other statutory dues with appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of statutory dues were
outstanding at the year-end for a period of more than six months from
the date they became payable.
(c) On the basis of information and explanations given to us and the
relevant documents produced before us, the following dues have not been
deposited on account of dispute -
Name of the statute Nature of dues Amount (Rs. in
lakhs)
Income Tax Act 1) Income tax on de- 5718.28
mands against dis- allowance of
certain expenses, including
ESOP, Provision for Bad Debts,
Royalty, Transfer to Reserve
Funds etc.
2) Penalty against 1106.48
amount transferred to Reserve
Funds.
3) Income tax on 3918.88
demands against income from Se-
curitisations and disallowance
u/s 40(a) (ia); earlier assessment
order reopened.
Name of the Statute Years to which the Pending with
amount relates
Income Tax Act Assessment Year C.I.T. (Appeal)
2010-11
Assessment Year C.I.T. (Appeal)
2008-09
Assessment Year C.I.T. (Appeal)
2007-08
X. The Company has no accumulated losses at the end of financial year
and has not incurred cash losses in the current and immediately
preceding financial year.
XI. Based on our audit procedures and as per information and
explanations given by the management, it appears that the Company has
not defaulted in the repayment of dues to banks, financial institutions
or debenture holders.
XII. From our examination of books and records and according to the
information and explanations given to us, it appears that adequate
documents and records are maintained in cases where Company has granted
loans and advances on the basis of security by way of pledge of shares
and other securities.
XIII. In our opinion the company is not a chit fund or a nidhi/mutual
benefit fund/society.
XIV. In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities and debentures and other investments.
XV. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks and financial institutions.
XVI. In our opinion and to the best of our knowledge and belief and
according to the information and explanations given to us, term loans
availed by the company were, prima facie, applied by the company during
the year for the purposes for which the loans were obtained other than
funds temporarily parked pending utilization of the funds for the
intended use.
XVII. According to the information and explanations given to us, and
on overall examination of the books and records of the company and
considering the nature of the business and activity being carried on,
we report that no funds raised on short term basis have been used for
long term investment.
XVIII. The company, during the year has not made any preferential
allotment of equity shares and convertible warrants to parties and
companies covered in the registrar maintained under section 301 the
Act.
XIX. According to the information and explanations given to us, during
the period, the Company has created charge in respect of secured
debentures issued.
XX. The company has disclosed the end use of money raised by public
issues in the Notes to accounts and the same has been verified by us
XXI. Based upon the audit procedures performed for the purpose of
reporting true and fair view of the financial statements and as per the
information and explanations given by the management, we report that no
material fraud on or by the company has been noticed or reported during
the course of our audit.
For Pijush Gupta & Co.
Firm Registration No: 309015E
Chartered Accountants
Pijush Kumar Gupta
Place: Hyderabad Partner
Date: May 20,2013 Membership No: 015139
Mar 31, 2012
1. We have audited the attached Balance Sheet of SHRIRAM CITY UNION
FINANCE LIMITED, (the "Company") as at March 31,2012, and the
related Statement of Profit and Loss and the Cash Flow Statement for the
year ended on that date annexed thereto which we have signed under
reference to this report. 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 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 the Management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003,
("the Order") issued by the Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, and on the
basis of such checks as we considered appropriate and according to the
information and explanations given to us during the course of audit a
statement on matters specified in the said order has been given in the
annexure hereof.
4. Further to our comments in the Annexure referred to in paragraph 3
above, 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 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, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) in our opinion and according to the information and explanations
given to us, the Balance Sheet, Statement of Profit and Loss and 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 from the directors
and taken on record by the company, none of the directors are
disqualified as on March 31,2012, from being appointed as a director in
terms of clause (g) of sub-section (1) of Section 274, of the Companies
Act, 1956;
f) in our opinion and to the best of our information and according to
the explanations given to us, the said financial statements 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:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2012;
(ii) in the case of the Statement of Profit and Loss, of the profit of
the Company forth year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
I. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) According to the information and explanations given to us, the
fixed assets have been physically verified by the management at
reasonable intervals and no material discrepancies were noticed on such
physical verification.
(c) There was no disposal of substantial part of its fixed assets
during the year.
II. The Company is engaged in financing activities which does not
involve maintenance of any inventory.
III. As per the information and explanations given to us the Company
has not granted/taken any loans, secured or unsecured, to/from
companies, firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956 (the Act).
IV. 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 for purchase of fixed assets. During the course of our audit,
we have not observed any major weakness or continuing failure to
correct any major weakness the internal control system of the company
in respect of these areas. There is no sale of goods or service or
purchase of inventory.
V. According to the information and explanations provided by the
management there are no contracts or arrangements referred to in
Section 301 of the Act, the particulars of which need to be entered
into the register maintained under the said Section.
VI. In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, the directives issued by
the Reserve Bank of India and the provisions of sections 58A, 58AA or
any other relevant provisions of the Act and the rules framed there
under, to the extent applicable, have been complied with. According to
the information and explanation given to us, no order has been passed
by the Company Law Board, the National Company Law Tribunal or the
Reserve Bank of India or any Court or any other Tribunal in this regard
in respect of the Company.
VII. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
VIII. 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 Act.
IX. (a) According to the information and explanations provided to us,
the Company is regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, service tax, income
tax, and other material statutory dues applicable to it and there are
no dues payable in respect of Employees' State Insurance, Investor
Education and Protection Fund, Excise duty, Custom Duty and Sales Tax,
cess and any other statutory dues with appropriate authorities.
(b) On the basis of information and explanations given to us and the
relevant documents produced before us, the following dues have not been
deposited on account of dispute:
Name of the
statute Nature of dues Amount (Rs. in lacs) Years to which the
amount relates
In come Tax
Act income tax on
demands/ESOP, 1678.61 Assessment
disallowance year 2009-10
Name of the Pending with
Statute
Income Tax CIT (Appeals)
Act
X. Based on our audit procedures and as per information and
explanations given by the management, it appears that the Company has
not defaulted in the repayment of dues to banks, financial institutions
or debenture holders.
XI. From our examination of books and records and according to the
information and explanations given to us, it appears that adequate
documents and records are maintained in cases where Company has granted
loans and advances on the basis of security by way of pledge of shares
and other securities.
XII. In our opinion the company is not a chit fund or a nidhi/mutual
benefit fund/society.
XIII. In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities and debentures and other investments.
XIV. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks and financial institutions.
XV. In our opinion and to the best of our knowledge and belief and
according to the information and explanations given to us, term loans
availed by the company were, prima facie, applied by the company during
the year for the purposes for which the loans were obtained other than
funds temporarily parked pending utilization of the funds for the
intended use.
XVI. According to the information and explanations given to us, and on
overall examination of the books and records of the company and
considering the nature of the business and activity being carried on,
we report that no funds raised on short term basis have been used for
long term investment.
XVII. The company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section
301 of the Act.
XVIII. According to the information and explanations given to us,
during the period, the Company has created charge in respect of secured
debentures issued.
XIX. The company has disclosed the end use of money raised by public
issues in the Notes to accounts and the same has been verified by us.
XX. Based upon the audit procedures performed for the purpose of
reporting true and fair view of the financial statements and as per the
information and explanations given by the management, we report that no
material fraud on or by the company has been noticed or reported during
the course of our audit.
For Pijush Gupta & Co.
Firm Registration No :309015E
Chartered Accountants
Place: Chennai
Ramendra Nath Das
Date: May 18,2012
Partner
Membership No. 014125
Mar 31, 2011
We have audited the attached Balance Sheet of Shriram City Union
Finance Limited as at 31st March, 2011 and the related Profit and Loss
Account and Cash Flow Statement for the year ended on that date annexed
thereto which we have signed under reference to this report. The
financial statements relating to the Corporate Region have been audited
by us and Other Regions audited by Branch Auditors whose reports were
forwarded to and considered by us. 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.
We conducted our audit in accordance with 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
providesareasonablebasisforouropinion.
1. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Government Of India in terms of section 227(4A) of the Companies
Act, 1956 and on the basis of such checks as we considered appropriate
and according to the information and explanations given to us during
the course of audit, a statement on matters specified in the said order
has been given in the Annexure hereof.
2. Further toour comments in the annexure referred to in paragraph 1
above, we reportthat:
a) 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
accou nt.
d) In our opinion and according to the information and explanations
given to us, 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 the written representations received from the
directors and taken on record by the company, none of the directors are
disqualified as on 31st, March 2011 from being appointed as a director
in terms of clause (g) of subsection (1) of section 274 of the
Companies Act, 1956.
f) In our Opinion and to the best of our information and according to
the explanations given to us, the said accounts 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,
(i) inthecaseof balance sheet, of the state of affairs of the company
as at 31 st March 2011;
(ii) inthecaseof profit and loss account, of the profit for the year
ended on that date; and
(iii) in the case of cash flow statement, of the cash flows
fortheyearended on that date.
Annexure to Auditors' Report
(Referred to in Paragraph 1 of the Auditors- Report of even date)
Re: Shriram City Union Finance Limited ('the Company')
I. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. All fixed assets have not been physically verified bythe management
during the year but there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. As informed, no material discrepancies
were noticed on such verification.
c. There was no substantial disposal of fixed assets during theyear.
II. The Company is primarily engaged in financing activities which
does not involve maintenance of any inventory.
III. As informed, the Company has not granted or taken any loans,
secured or unsecured to companies, firms or other parties covered in
the register maintainedundersection301oftheAct.
IV. In our opinion and according to the information and explanation
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of fixed assets. During the course of our audit, no major
weakness has been noticed in the internal control system in respect of
these areas. There is no sale of services.
V. According to the information and explanation provided by the
management, we are of the opinion that there are no transactions with
reference to contracts or arrangements referred to in section 301 of
the Act that need to be entered into the register maintained under
section 301.
VI. In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, directives issued bythe
Reserve Bankof India and the provisions of sections 58A, 58AA or any
other relevant provisions of the Act and the rules framed there under,
to the extent applicable, have been complied with. We are informed by
the management that no order has been passed by the Company Law Board,
National Company Law Tribunal or Reserve Bank of India or any Court or
any otherTribunal.
VII. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
VIII. As per the information and explanations given to us, the Central
Government has not prescribed maintenance of cost records under section
209(1) (d) of the Act.
IX. A) On the basis of our examination of theCompany's books and
records and on the basis of information and explanations given to us
the Company is generally regular in depositing undisputed statutory
dues including provident fund, investor education and protection fund,
employees' state insurance, income tax, wealth tax, sales tax, customs
duty, excise duty, cess and any other statutory dues with appropriate
authorities.
B.) On the basis of information and explanations given to us and the
relevant documents produced before us, the following dues have not been
deposited on account of dispute
Amount Years to which
the Forum where
dispute
Name of the
statute Nature of dues (Rs in
lacs) amount relates is pending
Wealth Tax
Act, 1957 Wealth tax
demands 0.75 A.Y.2001-02 CIT(Appeals)
Wealth Tax
Act, 1957 Wealth tax
demands 0.57 A.Y.2002-03 CIT(Appeals)
Wealth Tax
Act, 1957 Wealth tax
demands 0.43 A.Y.2003-04 CIT(Appeals)
Finance Act,
1994 Service tax on
hire purchase 1553.08 2001-02 to
2007-08 Before Madras
(Service Tax) and lease
transactions High Court
X. The company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
XI. Based on our audit procedures and as per the information and
explanations given by the management, it appears that Company has not
defaulted in repayment of dues to a financial institution,
bankordebenture holders.
XII. Based on our examination of documents and records, we are of the
opinion that the Company has maintained adequate records where the
Company has granted loans and advances on the basis of security by way
of pledge of shares, debentures and othersecurities.
XIII. In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund /society.
XIV. In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments.
XV. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
XVI. To the best of our knowledge and belief and according to the
information and explanations given to us, in our opinion, term loans
availed by the Company were, prima facie, applied by the Company during
the year for the purposes for which the loans were obtained other than
funds temporarily invested pending utilization of the funds forthe
intended use.
XVII. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company and
considering the nature of the business and activity being carried on,
we report that no funds raised on short- term basis have been used for
long-term investment.
XVIM.The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section
301 of the Act.
XIX. According to the information and explanations given to us, the
Company has created security or charge in respect of debentures issued.
XX. The Company has not raised any money by public issue during the
year.
XXI. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no material fraud on or by the Company has been noticed or
reported during the course of our audit.
For Pijush Gupta & Co.
Firm Registration No: 309015E
Chartered Accountants
Ramendra Nath Das
Place: Chennai Partner
Date: 26,hMay, 2011 Membership No. 014125
Mar 31, 2010
We have audited the attached Balance Sheet of Shriram City Union
Finance Limited as at 31st March, 2010 and the related Profit and Loss
Account and Cash Flow Statement for the year ended on that date annexed
thereto which we have signed under reference to this report. The
financial statements relating to the Corporate Region have been audited
by us and Other Regions audited by Branch Auditors whose reports were
forwarded to and considered by us. 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.
We conducted our audit in accordance with 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
providesareasonablebasisforouropinion.
1. As required by the Companies (Auditors Report) Order, 2003 issued
by the Government Of India in terms of section 227(4A) of the Companies
Act, 1956 and on the basis of such checks as we considered appropriate
and according to the information and explanations given to us during
the course of audit, a statement on matters specified in the said order
has been given in the Annexure hereof.
2.Furthertoour comments in the annexure referred to in paragraph 1
above, we report that:
(a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary forthe 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 and according to the information and explanations
given to us, 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 the written representations received from the
directors and taken on record by the company, none of the directors are
disqualified as on 31st March 2010 from being appointed as a director
in terms of clause (g) of subsection (1) of section 274 of the
Companies Act, 1956.
(f) In our Opinion and to the best of our information and according to
the explanations given to us, the said accounts 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,
(i) in the case of balance sheet, of the state of affairs of the
company as at 31st March 2010;
(ii) in the case of profit and loss account, of the profit for the year
ended on that date; and
(iii) in the case of cash flow statement, of the cash flows for the
year ended on that date.
Annexure to Auditors Report
(Referred to in Paragraph 1 of the Auditors- Report of even date)
Re: Shriram City Union Finance Limited (the Company)
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) These Fixed Assets have been physically verified by the Management
at reasonable intervals. We have been informed that no material
discrepancies were noticed on such verification.
(c) During the year, the Company has disposed off a substantial part of
the plant and machinery. Based on the information and explanation given
by the management and on the basis of audit procedures performed by us,
we are of the opinion that the sale of the said part of plant and
machinery has not affected the going concern status of the Company.
(ii) The Company is a Non-Banking Financial Company (NBFC) engaged in
the business of giving loans and does not maintain any inventory.
Therefore Clause 4(H) of the Order is not applicable to the Company.
(iii) As informed, the Company has not granted ortaken any loans,
secured or unsecured to companies, firms or other parties covered in
the register maintained under section 301 of the Act. Therefore Clause
4 (iii) of the Order is not appl icable to the Company.
(iv) In our opinion and according to the information and explanation
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for
purchase of fixed assets and rendering of services. As informed, the
Company has not made any purchase of Inventories and / or sold goods
during the year. During the course of our audit, no major weakness has
been noticed in the internal control system in respect of these
areas and accordingly the question of commenting on whether there is
continuous failure to correct major weakness in the Internal Control
System of the Company does notarise.
(v) According to the information and explanation provided by the
management, we are of the opinion that there are no transactions with
reference to contracts or arrangements referred to in section 301 of
the Act that need to be entered into the register maintained under
section 301. Therefore Clause (v) of the Order is not applicable tothe
Company.
(vi) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, directives issued by the
Reserve Bank of India and the provisions of sections 58A, 58AA or any
other relevant provisions of the Act and the rules framed there under,
to the extent applicable, have been complied with. We are informed by
the management that no order has been passed by the Company Law Board,
National Company Law Tribunal or Reserve Bank of India or any
Courtorany otherTribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
(viii) As per the information and explanations given to us, the Central
Government has not prescribed maintenance of cost records under section
209(1 )(d) of the Act. Therefore Clause (viii) of the Order is not
applicable to the Company.
(ix) (a) On the basis of our examination of the Companys books and
records and on the basis of information and explanations given to us,
we are of the opinion that the Company is regular in depositing
undisputed statutory dues including provident fund, investor education
and protection fund, employees state insurance, income tax, wealth
tax, sales tax, service tax, customs duty, excise duty, cess and any
otherstatutory dues with appropriate authorities.
(b) on the basis of information and explanations given to us and the
relevant documents produced before us, the following dues have not been
deposited on accountofdispute.
Amount Years to which the
Name of the statute Nature of dues (Rs in lacs) amount relates
Finance Act, 1994 Service tax on
hire purchase 1553.08 2001-02 to
(Service Tax) and lease
transactions 2007-08
Forum where dispute
Name of the statute is pending
Finance Act, 1994 Before Supreme
(Service Tax) Court of India
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bankordebenture holders.
(xii) Based on our examination of documents and records, we are of the
opinion that the Company has maintained adequate records where the
Company has granted loans and advances on the basis of security by way
of pledge of shares, debentures and other securities.
(xiii) Inouropinion.theCompanyisnotachitfundora nidhi / mutual benefit
fund / society. Therefore, the Clause 4(xiii) of the Order is not
applicable to the Company.
(xiv) In our opinion, the company is not dealing or trading in shares,
securities, debenture and other investments.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, in our opinion, term loans
availed by the Company were, prima facie, applied by the Company during
the yearforthe purposes for which the loans were obtained other than
funds temporarily invested pending utilization ofthefundsfortheintended
use.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company and
considering the nature of the business and activity being carried on,
we report that no funds raised on short-term basis have been used for
long-term investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained undersection
301 ofthe Act.
(xix) According to the information and explanations given to us, the
Company has created security or charge in respectof debentures issued.
(xx) The Company has not raised any money by public issueduringtheyear.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, no fraud on
or by the Company has been noticed or reported during the course of our
audit except for one instance of cash embezzlement aggregating Rs.
11.47 lakhs reported during the year. The Company has initiated legal
action and the amount involved as aforesaid has been fully written off.
Pijush Kumar Gupta
Partner
Membership No: 015139
For & on behalf of Pijush Gupta & Co.
Chartered Accountants
Firm registration number: 309015E
Place: Chennai
Date: 21.05.2010
Mar 31, 2000
We have audited the attached Balance Sheet of Shriram City Union
Finance Limited as at 31st March, 2000 and the Profit and Loss Account
for the period ended on that date annexed thereto, in which are
incorporated the audited statements of Eastern Region audited by us and
Northern Region, Western Region, Southern Region and its sub regions,
as audited by branch auditors of the said regions/ sub regions, and
report that:
1. As required by the Manufacturing and Other Companies (Auditors
Report) Order, 1988, and on the basis of such checks as we considered
appropriate and according to the information and expla- nations given
to us during the course of our audit, we enclose in annexure a
statement on the matters specified in the said order.
2. Further to our comments in the annexure referred to in paragraph 1
above, 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 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 and Profit and Loss Account dealt with by this
report are in agreement with the books of account.
(d) In our opinion and according to the information and explanations
given to us the Profit and Loss Account and the Balance Sheet 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) Reports including report on compliance of Prudential Norms
prescribed by the Reserve Bank of India and compliance of provisions of
Non-Banking Financial Companies Acceptance of Public Deposits (Reserve
Bank) Directions, 1998 of the branch auditors forwarded to us have been
considered and relied upon by us in preparing our Report.
(f) In our opinion and to the best of our information and according to
the explanations given to us, the Balance Sheet and Profit and Loss
Account together with Notes on Accounts and Significant Accounting
Policies, give the information required by the Companies Act, 1956, in
the manner so required, and
(i) the Balance Sheet gives a true and fair view of the state of
affairs of the Company as at 31st March, 2000.
(ii) the Profit and Loss Account gives a true and fair view of the
Profit for the period ended on that date.
ANNEXURE
(i) The Company is maintaining proper records showing full particulars
including quantitative details and situation of fixed assets. As
informed to us, the fixed assets have been physically verified by the
management at reasonable intervals and no material discrepancies were
noticed on such verifica- tion.
(ii) None of the fixed assets have been revalued during the year.
(iii) In respect of deposits and loans taken from companies and other
parties which are required to be listed in the register maintained
under Section 301 of the Companies Act, 1956 the rate of interest and
other terms and conditions of such deposits and loans are not prima
facie prejudicial to the interest of the Company.
(iv) According to information and explanations given to us, in respect
of loans granted to companies, firms or other parties which are
required to be listed in the register maintained under Section 301 of
the Companies Act, 1956, the rate of interest wherever applicable and
other terms and conditions of such loans are not prima facie
prejudicial to the interest of the Company.
(v) In respect of loans or advances in the nature of loans given by the
Company wherever there are specific stipulations as to the repayment of
principal, the parties are generally repaying the same as stipulated
and are also regular in payment of interest wherever applicable.
(vi) There is adequate internal control procedure commensurate with the
size of the Company and the nature of its business for the purchase of
plant and machinery, equipment and other assets and for the sale of
goods.
(vii) The transactions of purchase of goods and materials and sale of
services, made in pursuance of contracts or arrangements which are
required to be entered in the Register specified under Section 301 of
the Companies Act, 1956 and aggregating during the year to Rs.50,000 or
more in respect of each party, have been made at prices which in our
opinion and on the basis of explanations given to us are reasonable
having regard to the prevailing market prices for such goods and
services or the prices at which transactions for similar goods or
services have been made with other parties.
(viii) The Company has complied with the directions issued by the
Reserve Bank of India and the provisions of Section 58-A of the
Companies Act, 1956 and the Rules framed thereunder with regard to
deposits accepted from the public.
(ix) In our opinion, the Company has an adequate system of internal
audit which is commensurate with the size and nature of its business.
(x) The Company is regular in depositing the Provident Fund dues and
Employees State Insurance with the appropriate authorities.
(xi) According to information and explanations given to us, no
undisputed amounts payable in respect of Income-tax, Wealth tax and
Sales tax, Customs Duty and Excise Duty were outstanding as at 31st
March 2000 for a period of more than six months from the date on which
they became payable.
(xii) As per the information furnished by the Management and during the
course of our examination of the books of account carried out, we have
not come across any personal expenses which have been charged to profit
and loss account other than those payable under contractual obligations
or in accordance with generally accepted business practice.
(xiii) The provisions of Clause O of Sub Section (1) of Section 3 of
the Sick Industrial Companies (Special Provisions) Act, 1985, are not
applicable to the Company.
(xiv) The Company has granted loans or advances on the basis of
security by way of pledge of debentures, shares and other securities
and adequate documents and records were maintained in this regard.
(xv) The Clause A (iii), (iv), (v), (vi), (xii), (xiv), and (xvi) and
Clause D (iii) and (iv) of paragraph 4 of the Manufacturing and Other
Companies (Auditors Report) Order, 1988 are not applicable.
For PIJUSH GUPTA & CO.
Chartered Accountants
PIJUSH KUMAR GUPTA
Partner
Calcutta
15th September, 2000