To the Members of Asian Hotels (North) Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Asian Hotels(North) Limited ("the Company") which comprises of the balance sheet as at 31stMarch 2021 and the statement of Profit and Loss (including other comprehensive income)and the Statement of changes in equity and statement of cash flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.
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 as at 31 March 2021 and its loss total comprehensive income itscash flows and the changes in equity for the year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the standalone financialstatements:
A. Contingent Liabilities
Refer Note 34 which describes the uncertainty related to the outcome of certaindisputes and law-suits filed against the Company. The impact (if any) of thesedisputes/law-suits on the standalone financial statements of the Company could not beascertained.
B. Implications owing to COVID-19 Pandemic
Refer Note 41 with reference to implications of Covid-19 pandemic. The COVID-19outbreak worldwide and subsequent nationwide lockdown coupled with domestic as well asinternational travel restrictions announced by the Central/State Governments haveadversely impacted the business operations of the year ended March 312021 (andcontinuing) in terms of room occupancy as well as food beverages and other income ofHotel "Hyatt Regency Delhi" owned by the Company. The Company has undertakennecessary cost saving measures including rationalization of human resources initiativesto uplift revenue by resorting to home delivery of food and to conserve cash.The Companyhas also assessed the potential impact of COVID-19 on the carrying value of propertyplant & equipment investments trade receivables inventories and other currentassets appearing in the financial statements of the Company. Based on the currentindicators of future economic conditions the Company expects to recover the carryingvalue of these assets. The impact assessment of COVID-19 is a continuous process given theuncertainties associated with its nature and duration and actual results may differmaterially from these estimates.
C. One Time Restructuring
Refer Note 18 to the Financial Statements relating to long term borrowings. As afallout of the COVID-19 in India in April 2020 the RBI had issued Resolution Frameworkfor One Time Restructuring. In accordance to the same the financial institution lenders(5 No.s) entered into a Inter-Creditor Agreement on December 09 2020 invoking theresolution process. As per the Guidelines once the resolution is invoked it needs to beimplemented within 6 months i.e. by June 08 2021. Accordingly we received the signedsanction letters under the said invocation from majority lenders in order to verify theaccounting adjustments arising out of the One Time Restructuring.
D. Revaluation of Building
Refer Note 4 to the Financial Statements relating to Revaluation of Building. TheBuilding in New Delhi in which the Hotel business is operated has been valued at Rs.636.89 crores basis the valuation report dated April 09 2021. This being a materialadjusting subsequent event the adjustment to the value of building by way of upwardrevaluation of Rs. 42289 Lakhs has been recorded on March 312021 in line with therelevant Accounting Standards.
E. Provision for Diminution in Value of Investment
Refer Note 5 to the Financial Statements relating to Provision for Diminution in theValue of Investment. In respect of Ultimate Subsidiary company i.e. Leading HotelsLimited an Order under section 7 of Insolvency & Bankruptcy Code 2016 read with rule4 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules 2016has been passed on June 25 2021 for initiating Corporate Insolvency Resolution Process(CIRP). Due to the uncertainty related to realisation of amount from the insolvencyprocess the value of investment is fully impaired during the year by creation of provisionfor diminution in the value of the investment.
F. Current Status of Business Operations
Refer Note 45 to the Financial Statements relating to the Current Status of BusinessOperations. The Covid-19 outbreak and subsequent nationwide lockdown have adverselyimpacted the business operations of financial year ended March 312021 (and continuing) interms of room occupancy as well as food beverages and other income of Hotel "HyattRegency Delhi" owned by the Company. Further Commercial Real Estate Sales("CRE") activity of the company has also come to halt during this period.
As a result of above there were severe cash flows mismatch which has impacted thefinancial performance and liquidity position of the company. Due to creation of Provisionof Diminution in the Value of Investment in the subsidiary the net worth of the Companyhas taken a hit. However the Management has drawn plans for revival and for improving theprofitability and cash flows of the Company. Further majority lenders have invoked theOne Time Restructuring wherein the Company will get extra leverage for repayment of itsexisting and future principal and interest obligations. These factors and expected futureimprovement in business operations will be critical for the Company to continue as a GoingConcern.
Our opinion is not modified in respect of the above matters.
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the financial statements under the provisions of the Act and therules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our audit opinion onthe 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.
|Key Audit Matter Description ||Response to Key Audit Matter |
|A. Assessment of recoverability of Deferred Tax Assets recognized on tax losses ||Principal Audit Procedures |
|(Refer Note 8 to the Financial Statements.) || |
|- The Company has recognised deferred tax assets on unabsorbed depreciation and deductions based on actual payments (together hereinafter referred to as "tax losses") carried forward from the previous years as well as current year losses. || |
|The assets have been recognised on the basis of the Company's assessment of availability of future taxable profit to offset such tax losses based on business projections for the future years. ||Our procedures included amongst others the following: |
|- The recoverability of the deferred tax assets depends upon factors such as the projected taxable profitability of business and the period considered for such projections the rate at which those profits will be taxed and the period over which tax losses will be available for recovery. ||(i) Evaluation of the design and testing pertaining to effective ness of Company's controls relating to taxation and the assessment of carrying amount of deferred tax assets relating to unabsorbed tax losses; |
|This was considered as a key audit matter as the amount is material to the financial statements and significant judgement in key assumptions was required by the Company's Management in the preparation of forecasts of future taxable profits based on the underlying business plans. ||(ii) Assessing the reasonableness of the period of projections used in the deferred tax asset recoverability assessment considering that the Company operates in a highly competitive industry which is subject to disruptions through changing macro scenario; |
| ||(iii) Comparing the Company's performance for the year with the approved budget to assess the reasonableness of the assumptions; |
| ||(iv) Comparing the Company's projections of future taxable profit to the approved business plans; |
| ||(v) Testing whether projections prepared were consistent with our understanding and knowledge of current business and the general economic environment in which the Company operates and whether the tax losses can be utilized within the forecast recoupment period |
| ||; (vi) Testing the assumptions used by analyzing the impact on taxable profit using different growth rates and profit margins; |
| ||(vii) Reviewing the adequacy of disclosures made in the financial statements with regard to deferred taxes. |
| ||Based on the above procedures performed our testing did not identify any material exceptions with respect to the reasonability of the assumptions and estimates used by the management in assessing the recoverability of Deferred Tax Asset recognised in respect of tax Losses. |
|B. Assessment of ability to continue as Going Concern ||Our procedures included amongst others the following: |
|- The Company has incurred operational losses during FY 2020-21 on account of COVID-19 situation. ||(i) Evaluation of the design and testing pertaining to effectiveness of Company's controls relating to evaluation of Going Concern Assumption; |
|- As described in Emphasis of Matter para the creation of provision for diminution in the value of investment in the Subsidiary Company the Net Worth of the Company has taken a hit. || |
|- The Company has also approached the lenders for One Time Restructuring and that majority lenders have invoked the One Time Restructuring plan in line with RBI Resolution Framework. ||(ii) Assessing the reasonableness of the period of projections used in One Time Restructuring Proposals submitted to the lenders under RBI Resolution Framework for resolution of stressed assets on account of COVID-19 situation; |
|- The Management has drawn business plans drawn by the Management by way of revival of Hotel Operations and Commercial Real Estate Sales which had been impacted during FY 2020-21. ||(iii) Comparing the Company's performance for the year with the Financial forecasts submitted to the lenders under the said One Time Restructuring to assess the reasonableness of the assumptions; |
|- The ability of the Company to continue to achieve the above and revive its operations will be critical in its continuation as a Going Concern. This was considered as a key audit matter as the ability to continue as a going concern is material to the preparation of financial statements. ||(iv) Comparing the Company's projections of future taxable profit to the approved business plans; |
| ||(v) Evaluation of Financial Results of Companies operating in Comparable segments / industries and impact of COVID- 19 thereon |
| ||(vi) Reviewing the adequacy of disclosures made in the financial statements with regard to Status of Business Operations. Based on the above procedures performed our testing did not identify any material exceptions with respect to the reasonability of the usage of Going Concern assumption as at March 31 2021. However the same will be subject to on-going review and assessment during FY 2021-22 as the ability of the Company to continue as a Going Concern will be greatly dependent on the realization of business plan prepared by the Management. |
The Company has total MSME dues as at March 312021 amounting to INR 148.45 Lakhs whichare outstanding for a period beyond 45 days as stipulated in the Micro Small and MediumEnterprises Act 2006. As per Section 16 of the said Act the Company is required to payinterest on such delayed payments amounting to INR 16.39 Lakhs. As per the Company thedelay in payments is on account of temporary financial difficulties which have increasedon account of COVID-19 situation affecting the Hospitality Industry in particular and thatit will clear all MSME dues at the earliest.
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements 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.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) specifiedunder Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these 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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the 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 theAct 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 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 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 financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
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 our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.
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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("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 specified in the paragraph3 and 4 of the order to the extent applicable.
(A) 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. In our opinion proper books of account as required by law have been kept by theCompany 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 statementdealt with by this Report are in agreement with the books of account;
d. In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;
e. On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in termsof Section 164 (2) of the Act;
f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B";
(B) 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 disclosed the impact wherever necessary of pending litigations onits financial position in its financial statements - Refer Note 33 to the financialstatements;
ii. the Company has made provision as required under the applicable law or IndianAccounting Standards for material foreseeable losses if any on long-term contractsincluding derivative contracts;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
(C) With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act:
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.
For V V KALE & CO.
| ||Chartered Accountants |
| ||Firm Registration No. 000897N |
|Place: New Delhi ||Vijay V. Kale |
|Dated : 05/07/2021 ||Partner |
| ||Membership Number: 080821 |
| ||UDIN : 21080821AAABEE9446 |
Annexure - A to the Auditors' Report
The Annexure referred to in Independent Auditors' Report to the members of Asian Hotels(North) Limited ("the Company") on the standalone financial statements for theyear ended 31st March 2021 we report that:
(i) a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. The Company has not carried out regular program of physical verification of itsfixed assets during the year.
c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) As explained to us the inventories have been physically verified during the yearby the management. In our opinion the frequency of verification is reasonable.Discrepancies noticed on physical verification of inventory as compared to book recordswere not material.
(iii) As informed to us the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013 (the Act') except certainadvance for expenses/trade receivables recoverable in the normal course of business andtherefore the provisions of clauses (iii)(a) (iii)(b) & (iii)(c) of the Order arenot applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits covered by the provisions of Sections 73 to 76 orany other relevant provisions of the Companies Act 2013 and the rules framed there under.
(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.
(vii) (a) The Company has been generally irregular in depositing undisputed statutorydues including provident fund employees' state insurance income tax sales tax servicetax duty of customs duty of excise value added tax cess Goods and Service Tax and anyother statutory dues with the appropriate authorities except stray cases of deposition ofGST TDS PF and VAT.
According to the information and explanations given to us in our opinion no undisputedamount spayablein respect of statutory dues including Provident Fund Employees' StateInsurance Income Tax Value Added Tax Central Sales Tax Wealth Tax Service TaxCustomDuty Excise Duty CessGoods and Service Tax and other statutory dues applicable to itwere in arrears as at the balance sheet date for a period of more than six months from thedate they became payable.
(b) According to the information and explanations given to us and records of thecompany examined by us the following dues of income tax and duty of excise as at March 31st2021 which have not been deposited by the Company on account of any disputes.
|Nature of Statute ||Year to which it relates ||Amount unpaid (excluding interest) (Rs. in Lakhs) ||Forum where disputes is pending |
|Finance Act 1994 (Service Tax) ||2002-2007 ||214.62 Lakhs ||Hon'ble Supreme Court of India |
(viii) Based on our audit procedures and the information and explanations given by themanagement considering the effect of One Time Restructuring carried out by the Banks inline with RBI Resolution Framework for resolution of distressed loans arising out ofCOVID- 19 situation in India we are of the opinion that the company has not defaulted inrepayment of loans or borrowings to any financial institution banks and government. Thereare no debenture holders of the company.
(ix) The Company didn't raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and in our opinion and according to theinformation and explanation given to us the term loans were applied for the purposes forwhich loans were raised.
(x) Based upon the audit procedures performed and according to the information andexplanations given by the management we report that no fraud on or by the Company hasbeen noticed or reported during the course of our audit.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableInd AS.
(xiv) According to the information and explanations give to us and based on 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 years.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For V V KALE & CO. |
| ||Chartered Accountants |
|Place: New Delhi ||Firm Registration No. 000897N |
|Dated : 05/07/2021 ||Vijay V. Kale |
| ||Partner |
| ||Membership Number: 080821 |
| ||UDIN : 21080821AAABEE9446 |
Annexure - B to the Auditors 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 AsianHotels (North) Limited ("the Company") as of 31st March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 Reportingissued by the Institute of Chartered Accountants of India (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation 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 on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 financial statements whether due to fraud orerror.
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 financial reporting includes those policiesand procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2021based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
For V V KALE & CO.
| ||Chartered Accountants Firm Registration No. 000897N |
| ||Vijay V. Kale |
|Place: New Delhi ||Partner |
|Dated : 05/07/2021 ||Membership Number: 080821 |
| ||UDIN : 21080821AAABEE9446 |