| We have audited the accompanying standalone financial statements of
Vertex Securities Limited ("the Company") which comprise the Balance
Sheet as at 31 March 2015, the Statement of Profit and 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 Standalone 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 and 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 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.
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
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's
judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal
financial control relevant to the Company's preparation of the
financial statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on whether the Company has in
place an adequate internal 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 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.
Basis for Qualified Opinion
a) Attention is invited to Note 32 forming part of the Financial
Statements, regarding evaluation of long term investment by the
management. We have relied upon the confirmation by the management in
the absence of independent external evaluation.
b) As stated in Note 27 forming part of the Financial Statements,
sundry debtors under the head current assets include old outstanding
dues. The sundry debtors outstanding for more than six months amount to
Rs. 16,439,009. Further out of the total sundry debtors, for a sum of
Rs. 9,695,589, the Company has initiated legal and recovery actions,
the proceedings of which are in different stages.
In view of the above, the quantum of realisability of old outstanding
sundry debtors/ legally initiated debts is not ascertainable at this
stage.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph above, 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 2015, its loss
and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of Section 143 of the Companies Act, 2013, we give in
the Annexure a statement on the matters specified in paragraphs 3 and 4
of the 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 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.
(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) The company has adequate internal financial controls and in our
opinion the same are operating effectively.
(g) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us :
i. The Company does not have any pending litigations which would
impact its financial position/ The Company has disclosed the impact of
pending litigations on its financial position in its financial
statements - Refer Note 22 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.
(Annexure referred to in paragraph 1 under the heading of 'Report on
Other Legal and Regulatory Requirements' of our report of even date.)
(i) (a) In our opinion, the Company has maintained proper records
showing full particulars including quantitative details and situation
of fixed assets.
(b) As explained to us, some of the fixed assets have been physically
verified by the management according to a programme of verification
which in our opinion is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies with
respect to book records were noticed on such verification.
(ii) The Company had no inventory during the year. Since the Company
has no inventory, clauses 3 (ii) of the Order is not applicable.
(iii) In our opinion and according to the information and explanations
given to us, the Company has granted unsecured any loans, to a company
covered in the register maintained under Section 189 of the Companies
Act, 2013.
(a) The company is recovering princiapl and interest on a regular
basis.
(b) The balance at 31 March 2015 is Rs. 1,507,635. There is no overdue
amount.
(iv) In our opinion and according to the information and explanation
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchases of fixed assets and for the sale of services. During the
course of our audit, we have not observed any continuing failure to
correct major weaknesses in internal control systems.
(v) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposit within the
meaning of Section 73 to 76 of the Companies Act, 2013, and the rules
framed thereunder.
(vi) In our opinion and according to the information and explanation
given to us, pursuant to the Rules made by the Central Government, the
maintenance of cost records as prescribed under Section 148 (1) of the
Companies Act, 2013, is not applicable to the Company for the year
under report.
(vii) (a) According to the records of the Company and the information
and explanations given to us, the Company has been regularly depositing
with the appropriate authorities undisputed statutory dues including
Provident Fund, Employees' State Insurance, Income tax, Sales Tax,
Wealth tax, Service tax, Customs Duty, Excise Duty, Value added Tax,
Cess and any other statutory dues applicable to it.
There are no undisputed statutory dues as referred to above as at 31st
March, 2015 outstanding for a period of more than six months from the
date they become payable.
(b) The disputed statutory dues aggregating to Rs. 622,000 that have
not been deposited on account of matters pending before the appropriate
authority are as under:
Sr. Name Nature Forum Period Amount (`)
No. of the of where to which
statute dues dispute the
is amount
pending relates
1 Finance Tax/ The Customs, 2006-07 to 622,000
Act Penalty Excise and 2009-10
Service
tax
Appellate
Tribunal.
(c) 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 thereunder has been
transferred to such fund within time.
(viii) According to the records of the Company, the Company has
accumulated losses at the end of the financial year. The Company has
incurred a cash loss during the financial year and in the immediately
preceding financial year.
(ix) Based on our audit procedures and according to the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to banks or financial
institutions.
(x) Based on our examination of the records, the Company has not given
any guarantee for loans taken by others from banks or financial
institutions.
(xi) The Company has not taken any term loans during the year.
(xii) To the best of our knowledge, and according to the information
and explanations to us, no material fraud on or by the Company has been
noticed or reported during the year.
For RAHUL GAUTAM DIVAN & ASSOCIATES
Chartered Accountants
(Firm's Registration Number: 120294W)
GAUTAM DIVAN
Place : Mumbai Partner
Date : 12 May, 2015 Membership Number: 006457
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