Report on the Financial Statement
We have audited the accompanying financial statement of SHARDUL
SECURITIES LTD ('''' the company''''}, which comprise the Balance Sheet as
at 31st March 2013, the Statement of Profit & Loss and the Cash Flow
statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
These financial statements are the responsibility of the Company''s
Management that give a true and fair view of the financial position,
financial performance and the cash flows of the company in accordance
with accounting principles generally accepted in India including
Accounting Standards referred to in Section 211(3C) of the Companies
Act 1956 (the Act). The responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation of the financial statements that give a true and fair 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 Standards on Auditing issued by the Institute of Chartered of
India. Those Standards require that we comply with the ethical
requirement and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatements.
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. 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 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:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2013;
ii) in the case of the Statement of Profit and Loss , of the Profit of
the Company for the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the Cash Flow 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 issued
by Central Government of India, in terms of Section 227(4A) of the Act
, we enclose in the Annexure hereto a statement on the matters
specified in the paragraphs 4 and 5 of the said order, to the extent
applicable to Company.
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 purpose of our
audit;
b) In our opinion, proper books of account, as required by law have
been kept by the Company, so far as appears from our examination of
those books;
c) The Balance Sheet, the 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, the Statement of Profit and Loss
and Cash Flow Statement dealt with by this report are in compliance
with the mandatory 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 at 31st March, 2013 and taken on record by the Board of Directors,
we report that none of the Directors of the Company is disqualified as
on 31st March 2013 from being appointed as a Director in terms of
Section 274(1 )(g) of the Act.
ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT OF SHARDUL SECURITIES LTD.
FOR THE YEAR ENDED 31st MARCH 2013.
(Referred to in paragraph 1 of our report of the even date)
i. In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets based on
available information.
b) As explained to us, the fixed assets have been physically verified
by the management in accordance with a phased programme of
verification, which in our opinion is reasonable, considering the size
and nature of its business. No material discrepancies were noticed on
such verification.
c) As per the information and explanations given to us, during the
year, the Company has not disposed off any substantial part of fixed
assets that would affect the going concern.
ii. In respect of its inventories :
a) As explained to us, the inventories, which are held in
dematerialized & physical forms except stock lying with third parties,
have been verified by the management with the supporting evidence
during the year. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanation
given to us, the procedure of verification of inventories followed by
the management is reasonable and adequate in relation to the size of
the Company and the nature of its business.
c) Based on our examination of inventory records, we are of the opinion
that the company is maintaining proper records of inventory. As
explained to us, no material discrepancies have been noticed on
verification between the dematerialized stocks or physical stocks and
the book records.
iii. In respect of loans:
a) The Company has not taken loans, secured or unsecured from
companies, firms or parties covered in register maintained under
section 301 of the companies Act, 1956.
Hence, clause (iii) (b) to (iii) (d) of paragraph 4 of the Companies
(Auditor''s Report) orders 2003 are not applicable to the company.
b) The Company has given unsecured loan to a party covered in the
register maintained under section 301 of the Companies Act, 1956.
The maximum amount outstanding during the year 375 lacs and the closing
balance at year end is 255 lacs.
c) In our opinion and according the information and explanation given
to us, the rate of interest and other terms and condition of loans
given by the company are not prima facie prejudicial to the interest of
the company.
d) According to the information and explanations given to us, the
payment of principal amount and interest are regularly made as per
terms stipulated.
e) There is no overdue amount outstanding for more than 1 lac at the
end of the year in respect of the above loans.
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 nature of its business
for the purchases of securities and services and fixed assets and sale
of securities and services rendered towards fees based income. Further,
on the basis of our examination of the books and records of the
company, and according to the information and explanations given to us,
we neither have come across nor have been informed of any continuing
failure to correct major weakness in the aforesaid internal controls.
v. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a) According to the information and explanation given to us, we are of
the opinion that transactions that need to be entered into the register
maintained under section 301 of the Companies Act, 1956, have been so
entered.
b) In our opinion and according to the information and explanations
given to us, the transactions of purchase and sale of securities and
services in pursuance of contracts or arrangement required to be
entered in the register maintained under section 301 of the Companies
Act, 1956 and exceeding the value of Rs.5,00,000 in respect of each
party during the year have been made at prices, which appear reasonable
having regard to the prevailing market prices at the relevant time.
vi. According to the information and explanations given to us, the
Company has not accepted any deposits from the public and hence
directives issued by Reserve Bank of India and provision of section 58A
and 58AA of the Companies Act, 1956 and rules framed there under.
Therefore, the provisions of Clause (vi) of paragraph 4 of the order
are not applicable for the year under audit.
vii. The Company has internal audit system commensurate with its size
and nature of its business.
viii. In respect of statutory dues :
a) According to the information and explanations given and records as
produced and examined by us, in our opinion the undisputed statutory
dues in respect of Investor Education and Protection Fund, Sales tax,
Provident fund, Employees State Insurance, Income tax, Service tax,
Wealth tax and other material statutory dues as applicable have been
regularly deposited by the Company during the year with appropriate
authorities. According to the information and explanation given to us,
no undisputed amounts payable in respect of the aforesaid dues were
outstanding as at March 31, 2013 for a period of more than six months
from the date of becoming payable.
b) The Customs duty, Excise duty and Cess are not applicable to the
Company.
c) According to the information and explanations given to us, there are
no such statutory dues, which have not been deposited because of any
dispute except Income tax dispute of Rs. 12.32 lacs for A.Y. 10-11
which are pending with Asst. Commissioner of Income Tax.
ix. The company has positive net worth at the end of the financial
year. The Company has no accumulated losses and has not incurred any
cash losses during the current financial year and has also not incurred
any cash loss in the immediately preceding financial year.
x. Based on our audit procedures and according to the information &
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institution.
xi. In our opinion and according to the explanations given to us and
based on the information available, no loans and advances have been
granted based on security by way of pledge of shares, debentures and
other securities.
xii. The company has maintained proper records of transactions and
contracts in respect of trading in shares, debentures and other
securities and timely entries have been made therein. The investments
are held by the company in its own name except shares held as margin
with third parties.
xiii. According to the information and explanation given by the
management, the company has not given any guarantees for loans taken by
others from banks or financial institutions.
xiv. According to the information and explanations given to us the
company has not obtained any term loans.
xv. On the basis of review of utilization of funds, which is based on
overall examination of the Balance Sheet of the company as at 31st
March, 2013, we are of the opinion that there are no funds raised on
short term basis that have been applied for long term investment.
xvi. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by the management.
In view of the nature of activities carried by the Company, clause no
(viii) and (xiii) of Companies (Auditor''s Report) Order, 2003 are not
applicable to the Company. Further in view of the absence of conditions
prerequisite to the reporting requirement of clauses (xviii), (xix) and
(xx), the said clauses are, at present, not applicable.
For Rajen Damani & Associates
Chartered Accountants
(Registration No. 116762W)
CA Rajen. J. Damani
Place : Mumbai (Partner)
Dated : 28th May, 2013 Membership No: 034375
