TO THE MEMBERS OF
TWENTYFIRST CENTURY MANAGEMENT SERVICES LIMITED REPORT ON THE AUDIT OF STANDALONEFINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of TWENTYFIRST CENTURYMANAGEMENT SERVICES LIMITED ("the Company") which comprise the Balance Sheet asat 31st March 2022 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "standalone financial statements").
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 below the aforesaid standalone 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 2022 and its Loss total comprehensive income itscash flows and the changes in equity for the year ended on that date.
Basis for Qualified Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing ("SA"s) specified under section 143(10) of the Act. 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 theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules made thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence obtained by us is Sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.
Non-Provision of Doubtful Long-Term Loans & Advances:
The Company has long term loans as on 31/03/2022 amount to Rs22.13 Lakhs which is givento Group Company. In absences of sufficient and appropriate evidence we are unable tocomment recovery of said loans & advances. If these Loan & advances balances werewritten off in the books the loss for the year would have been Rs 1543.71 lacs (asagainst the reported loss figure of
Rs 1521.58 lacs) and loss after considering accumulated figures of previous years wouldhave been
Rs 1719.71 Lacs (as against reported figure of Loss of Rs 1697.58. Lacs) and thebalance of amount due from group company would have been Rs Nil (as against the reportedfigure of Rs 22.13 lacs).
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Sr. Key Audit Matter |
|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 2(g) 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 over the 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 31St March 2022 to evaluate whether any change was required on these uncertainties. |
|2 Accounting and Valuation of Investments |
|The Company's investments as on 31/03/2022 amount to Rs 3962.94 Lakhs which is primarily invested in equity shares and preference (Including investments in subsidiary company). This comprises 96.54% of total assets of the Company. Considering the high value of this item of asset it has been considered as a key audit matter. |
|Auditor's Response: |
|We obtained an understanding of the internal controls designed by the management for investment accounting and valuation and tested the operating effectiveness these controls. We undertook substantive audit procedures like inspection recalculation and reperformance. We performed procedures to identify encumbrances on these investments and verified sufficiency and appropriateness of disclosures regarding the same. We performed procedures to verify adherence to IND-AS. |
Emphasis of Matter
1. We draw your attention to the financial results which describes the Management'sassessment of the impact of COVID-19 pandemic and the resultant lockdowns on thesignificant uncertainties involved in developing some of the estimates involved inpreparation of the financial statements including but not limited to its assessment ofliquidity and going concern recoverable values of its property plant and equipmentintangible assets and the net realizable values of other assets Based on informationavailable as of this date Management believes that no further adjustments are required tothe financial results However in view of the highly uncertain economic environmentimpacting the industry a definitive assessment of the impact is highly dependent uponcircumstances as they evolve in future and the actual results may differ from thoseestimated as at the date of approval of these financial statements.
Our opinion is not modified in respect of this matter.
2. As fully described in Note 2(h) to the standalone financial statements the Companyhas made provision form contingent liability of Rs75 Lakhs payable to Gujarat IndustrialInvestment Corporation for pending legal case in the High Court of Chennai. The scopeduration or outcome of these matters is uncertain.
Our opinion is not modified in respect of this matter.
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Business Responsibility ReportCorporate Governance
Report and Shareholder Information but does not include the standalone financialstatements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained 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 materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Management's Responsibilities for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone 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 is responsible for overseeingthe Company's financial reporting process.
Auditor's Responsibilities for the 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 or the override of internal control.
Obtain an understanding of internal financial control relevant to the audit in order todesign 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 hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements. We communicate withthose charged with governance regarding among other matters the planned scope and timingof the audit and significant audit findings including any significant deficiencies ininternal 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2020 (the Order')issued by the Central Government of India in terms of sub section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specifiedin paragraphs 3 & 4 of the Order.
2. As required by Section 143(3) of the Act based on our audit we report that: a.We have sought and except for the possible effect of the matter described in paragraph ofthe paragraph of the basis for qualified opinion above obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposesof our audit.
b. In our opinion except for the effect of the matters described in the basis forqualified opinion paragraph above proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books. c. TheBalance Sheet the Statement of Profit and Loss Statement of Other Comprehensive IncomeStatement of Changes in Equity and the Cash Flow Statement dealt with by this Report arein agreement with the books of account. d. In our opinion except for the effect of thematters described in the basis for qualified opinion paragraph above the aforesaidstandalone financial statements comply with the Ind AS specified under Section 133 of theAct. e. On the basis of the written representations received from the directors as on 31stMarch 2022 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2022 from being appointed as a director in terms of Section164 (2) of the Act. f. With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting. g. With respect to the other matters to be included inthe Auditor's 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 tothe explanations given to us: i. The Company has disclosed the impact of pendinglitigations on its financial position in its financial statements. ii. The Company did nothave any long-term contracts including derivative contracts for which there were anymaterial foreseeable losses. iii. There has been no delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Companyand its subsidiary companies incorporated in India. h. With respect to the matter to beincluded in the Auditors' Report under section 197(16) of the Act: In our opinion andaccording to the information and explanations given to us the remuneration paid by theCompany to its directors during the current year is in accordance with the provisions ofsection 197 of the Act. The remuneration paid to any director is not in excess of thelimits laid down under section 197 of the Act. The Ministry of Corporate Affairs has notprescribed other details under section 197(16) of the Act which are required to becommented upon by us.
|For Shankar & Kishor |
|Chartered Accountants |
|Firm Registration No. 112451W |
|Shankar Shetty |
|Membership No. 038139 |
|UDIN : 22038139AKTJDM8121 |
|Place: Mumbai |
|Date: 26-05-2022 |
"ANNEXURE A" TO INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' section of our report of even date) With reference to the Annexure Areferred to in the Independent Auditors' Report to the members of the Company on thestandalone financial statements for the year ended 31 March 2022 we report the following:
1. In respect of the Company's fixed assets: a. The Company has maintained properrecords showing full particulars including quantitative details and situation ofproperty plant and equipment. b. The Company has a program of verification to cover allthe items of fixed assets in a phased manner which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain fixed assets were physically verified by the management during the year. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch verification. c. The company has no immovable property. In respect of immovableproperties of land and building that have been taken on lease the lease agreements are inthe name of the Company. d. According to the information and explanations given to us andon the basis of our examination of the records of the Company the Company has notrevalued its property plant and equipment (including right of use assets) or intangibleassets or both during the year. e. According to the information and explanations given tous and on the basis of our examination of the records of the Company there are noproceedings initiated or pending against the Company for holding any benami property underthe Prohibition of Benami Property Transactions Act 1988 and rules made thereunder.
2. (a) The company is primarily engaged in investing activities. Accordingly it doesnot hold any physical inventories. Thus paragraph 4(ii) of the Order is not applicable tothe company.
(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not been sanctioned workingcapital limits in excess of five crore rupees in aggregate from banks or financialinstitutions on the basis of the security of current assets at any point of time duringthe year. Accordingly clause 3(ii)(b) of the Order is not applicable to the Company.
3. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not made any investments in orprovided security to companies firms limited liability partnerships or any other partiesduring the year. The Company has granted loans and advances in the nature of loans to 1 ofthe company details of which are stated below. However the Company has not provided anyguarantees in the nature of loans during the year to companies firms or limited liabilitypartnerships or any other parties during the year.
(a) Based on the audit procedures carried out by us and as per the information andexplanations given to us the Company has granted advances in the nature of loans to otherparties as below:
|Particulars ||Advance in the Nature of Loan Other than Employee Advances (Rs lacs) |
|Aggregate amount during the year ||Nil |
|(Twenty First Century Reality Limited) || |
|Balance outstanding as at the Balance ||Rs22.13 |
|Sheet date || |
|(Twenty First Century Reality Limited) || |
(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company in our opinion in the case of loans andadvances in the nature of loans given the repayment of principal and payment of interesthas been stipulated and the repayments or receipts have been not regular.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there is an outstanding amount for more thanninety days in respect of loans and advances in the nature of loans given.
(d) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there is no loan or advance in the nature ofloans granted falling due during the year which has been renewed or extended or freshloans granted to settle the overdues of existing loans or advances in the nature of loansgiven to same parties.
(e) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not granted any loans oradvances in the nature of loans either repayable on demand or without specifying any termsor period of repayment.
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. The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2022 and therefore the provisions of the clause 3(v)of the Order are not applicable to the Company.
6. The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Companies Act 2013 for the business activities carried out bythe Company. Thus reporting under clause 3(vi) of the order is not applicable to theCompany.
7. According to the information and explanations given to us in respect of statutorydues: a. The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax and other materialstatutory dues applicable to it with the appropriate authorities. b. There were noundisputed amounts payable in respect of Provident Fund Employees' State Insuranceexcept Income Tax and other material statutory dues in arrears as at March 31 2022 for aperiod of more than six months from the date they became payable. c. Details of dues ofIncome Tax which have not been deposited as at March 31 2022 on account of dispute aregiven below:
|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 ||104.96 ||A.Y 1996-97 ||ACIT Assessing officer |
|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(A) 18 Chennai |
|Income Tax Act 1961 ||Income tax ||13.71 ||A.Y 2010-11 ||ACIT Corporate Circle-3(1) Chennai |
|Income Tax Act 1961 ||Income tax ||259.71 ||A.Y 2014-15 ||ITO Corporate ward 3(4) Chennai |
|Income Tax Act 1961 ||Income tax ||22.74 ||A.Y 2015-16 ||ACIT Assessing officer |
|Income Tax Act 1961 ||Income tax ||140.75 ||A.Y 2018-19 ||ACIT Assessing officer |
|Income Tax Act 1961 ||Income tax ||66.46 ||A.Y 2018-19 ||Rectification Pending with CPC |
8. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not surrendered or disclosedany transactions previously unrecorded as income in the books of account in the taxassessments under the Income Tax Act 1961 as income during the year.
9. The Company has not taken any loans or borrowings from financial institutions banksand government. Hence reporting under clause 3(ix) of the Order is not applicable to theCompany.
10. (a) The Company has not raised money by way of initial public offer or furtherpublic offer (including debt instruments) and hence reporting under clause 3(x)(a) of theOrder is not applicable to the Company.
(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly clause 3(x)(b) of the Order is not applicable.
11. (a) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no material fraud on the Company by its officersor employees has been noticed or reported during the year.
(b) According to the information and explanations given to us no report undersub-section (12) of Section 143 of the Act has been filed by the auditors in Form ADT-4 asprescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014 with the CentralGovernment. (c) We have taken into consideration the whistle blower complaints received bythe Company during the year while determining the nature timing and extent of our auditprocedures.
12. The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable to the Company.
13. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.
14. (a) Based on information and explanations provided to us and our audit proceduresin our opinion the Company has an internal audit system commensurate with the size andnature of its business.
(b) We have considered the internal audit reports of the Company issued till date forthe period under audit 15. In our opinion and according to the information andexplanations given to us during the year the Company has not entered into any non-cashtransactions with its Directors or persons connected to its directors and hence provisionsof section 192 of the Companies Act 2013 are not applicable to the Company.
16. (a) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
(b) The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India. Accordingly clause 3(xvi)(c) of the Order is notapplicable.
(c) According to the information and explanations provided to us during the course ofaudit the Group does not have any CICs 17. The Company has incurred cash losses ofRs1515.63 lakhs in the current year and Rs358.16 lakhs in the immediately precedingfinancial year.
18. There has been no resignation of the statutory auditors during the year.Accordingly clause 3(xviii) of the Order is not applicable.
19. According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realisation of financial assets and paymentof financial liabilities other information accompanying the financial statements ourknowledge of the Board of Directors and management plans and based on our examination ofthe evidence supporting the assumptions nothing has come to our attention which causesus to believe that any material uncertainty exists as on the date of the audit report thatthe Company is not capable of meeting its liabilities existing at the date of balancesheet as and when they fall due within a period of one year from the balance sheet date.We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.
20. In our opinion and according to the information and explanations given to us thereis no unspent amount under sub-section (5) of section 135 of the Act pursuant to anyproject. Accordingly clauses 3(xx)(a) and 3(xx)(b) of the Order are not applicable.
|For Shankar & Kishor |
|Chartered Accountants |
|Firm Registration No. 112451W |
|Shankar Shetty |
|Membership No. 038139 |
|UDIN: 22038139AKTJDM8121 |
|Place: Mumbai |
|Date: 26-05-2022 |