THE MEMBERS OF
TWENTYFIRST CENTURY MANAGEMENT SERVICES LIMITED
REPORT ON THE AUDIT OF STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone IND AS financial statements of TWENTYFIRSTCENTURY MANAGEMENT SERVICES LIMITED ("the Company") which comprise theBalance Sheet as at 31st March 2019 and the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "standalone Ind AS financialstatements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 312019 the profit and totalcomprehensive income changes in equity and its cashflows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report:
|Sr. No. ||Key Audit Matters |
|1. ||Evaluation of uncertain tax Positions |
| ||The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes (refer note 25 to the standalone financial statements. |
| ||Auditor's Response: |
| ||We have obtained the details of tax assessments & demands for all the cases disputed from the Management. We involved our internal expertise to challenge the Management's underlying assumptions overthe possible outcome of the disputes. We have also considered other rulings in evaluating the Management's position on these uncertain tax positions. Additionally we considered the effect of new information in respect of uncertain tax positions as at 1st April 2018 to evaluate whether any change was required on these uncertainties. |
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone IND AS financial statements that give a true and fair view of thefinancial position and financial performance Other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (INDAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.
This responsibility also includes maintenance of adequate accounting records inaccordance with the preparation of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies ; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate Internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
Our responsibility is to express an opinion on these standalone IND AS financialstatements based on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone IND AS financial statements.
Auditor's Responsibilities forthe Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations orthe override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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 auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Non Provision of Doubtful Loans & Advances amounting to Rs.2272.77 lacs advanced toits subsidiary company and Group Company.
We further report that had the observation made by us above been considered the lossfor the year would have been Rs.1722.02 lacs (as against the reported profit figure ofRs.550.75 lacs) and loss after considering accumulated figures of previous years wouldhave been Rs.46.62 lacs (as against reported figure of profit of Rs. 2226.15 Lacs) and thebalance of amount due from subsidiary company and group company would have been Rs. Nil(as against the reported figure of Rs.2272.77 lacs).
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion Paragraph above the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 and its profit total comprehensive incomeits cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ('the Order') issued bythe Central Government of India in terms of sub section (11) of section 143 of the Act wegive in the "Annexure A" a statement on the matters specified in paragraphs 3& 4 of the 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 bestof our knowledge and belief were necessary for the purposes of our audit.
(b) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph above in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss Statement of OtherComprehensive Income Statement of Changes in Equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
(d) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph above our opinion the aforesaid standalone IND AS financial statements complywith the Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014
(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.
(f) In our opinion the internal financial controls over financial reporting of theCompany 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 Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has not disclosed the impact of pending litigations on its financialposition in its financial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which required to be transferred to the Investor's Educationand Protection fund
For Lakhani & Lakhani
Firm Registration No. 115728W
Membership No. 117107
Date: 15th May 2019.
"ANNEXURE A" TO INDEPENDENT AUDITOR'S REPORT
1. The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
The fixed assets of the company have been physically verified by the Management duringthe year and no material discrepancies were noticed on such verification. In our opinionthe verification is reasonable having regard to the size of the company and the nature ofits assets.
As per the information and explanations provided to us there are no immovable fixedassets in the name of the Company.
2. The company is primarily engaged in investing activities. Accordingly it does nothold any physical inventories. Thus paragraph 4(ii) of the Order is not applicable to thecompany.
3. The company has granted interest free loans of Rs.2272.77 to the company listed inthe register maintained under section 189 of the Companies Act 2013. But the said Loanadvanced to subsidiary company and Group Company to the extent of Rs.2272.77 doubtful inrecovery.
4. During the year under audit the company has complied with the provisions of section185 and 186 of the Companies Act 2013 in respect of loans investments guarantees andsecurity.
5. During the year under audit the company has not accepted any deposits from thepublic to which the directives issued by Reserve Bank of India or the provisions ofSections 73 to 76 or any other relevant provisions of the Companies Act 2013 and therules framed there under apply.
6. We have been informed that Central Government has not prescribed the maintenance ofcost records under Section 148(1) of the Companies Act 2013 in respect of any activitiescarried on by the company.
7. According to the information and explanations given to us the company has beenregular in depositing Employees Provident Fund dues and has also been regular indepositing undisputed income tax and other applicable statutory dues with appropriateauthorities.
According to the information and explanations given to us and the records of theCompany examined by us the particulars of income tax as at 31st March 2019 which havenot been deposited on account of a dispute pending are as under:
|Name of Statute ||Nature of dispute ||Amount (Rs. in lacs) ||Period for which the amount relates ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income tax ||4.81 ||A.Y 1995-96 ||ACIT |
|Income Tax Act 1961 ||Income tax ||104.96 ||A.Y 1996-97 ||ACIT |
|Income Tax Act 1961 ||Income tax ||1.33 ||A.Y 2006-07 ||ACIT |
|Income Tax Act 1961 ||Income tax ||55.45 ||A.Y 2007-08 ||ITAT |
|Income Tax Act 1961 ||Income tax ||68.69 ||A.Y 2007-08 ||CIT-Appeal |
|Income Tax Act 1961 ||Income tax ||4.57 ||A.Y 2010-11 ||ACIT |
|Income Tax Act 1961 ||Income tax ||259.71 ||A.Y 2014-15 ||ITO |
|Income Tax Act 1961 ||Income tax ||22.74 ||A.Y 2015-16 ||CIT - Appeal |
8. On the basis of records examined by us and the information and explanations given tous the company has not defaulted in repayment of dues to financial institutions banks ordebenture holders.
9. According to the information and explanations given to us the company has notraised any moneys by way of initial public offer or further public offer or any term loansduring the year under review
10. To the best of our knowledge and belief and according to the information andexplanations given to us we have not come across any fraud by the company or any fraud onthe Company by its officers or employees during the course of our audit of the periodunder review.
11. During the year under audit the company has not paid any managerial remuneration.Thus paragraph 3(xi) of the order is not applicable to the company.
12. In our opinion and according to information and explanations given to us thecompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the order is notapplicable.
13. According to the information and explanations given to us and the records examinedby us the transaction with the related parties are in compliance with the provisions ofsection 177 and section 188 of the Companies Act 2013 and details of such transactionshave been disclosed in the financial statements as required by the applicable accountingstandards.
14. According to the information and explanations given to us and the records examinedby us the company has not made any preferential allotment and private placement of sharesduring the year. Accordingly paragraph 3(xiv) of the order is not applicable.
15. According to the information and explanations given to us and the records examinedby us the company has not entered into non-cash transactions with directors or personsconnected with him. Accordingly paragraph 3(xv) of the order is not applicable.
16. The Company is required to be registered under section 45-IA of the Reserve Bank ofIndia Act 1934.
For Lakhani & Lakhani
Firm Registration No: 115728W
Membership No. 117107
Date: 15th May 2019
"ANNEXURE B" TO INDEPENDENT AUDITOR'S REPORT
Report on the Internal Financial Controls under clause (i) of sub-section 3 of section143 of the companies act 2013 ("the act")
We have audited the internal financial controls over financial reporting of TWENTYFIRSTCENTURY MANAGEMENT SERVICES LIMITED ("the Company") as of 31st March2019 in conjunction with our audit of the standalone IND AS financial statements ofthe Company for the year ended on that date.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing prescribed under Section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note.
For Lakhani & Lakhani
Firm Registration No: 115728W
Membership No. 117107
Date: 15th May 2019.