THE MEMBERS OF
CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LIMITED
Report on the Audit of the Standalone financial statements
1 We have audited the accompanying standalone financial statements of CholamandalamInvestment and Finance Company Limited ("the Company") which comprise theStandalone Balance Sheet as at March 31 2022 and the Standalone Statement of Profit andLoss (including Other Comprehensive Income) the Statement of Changes in Equity and theStandalone Cash Flow Statement for the year then ended and notes to the standalonefinancial statements including a summary of significant accounting policies and otherexplanatory information.
2. 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 accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2022 and total comprehensive income(comprising of profit and other comprehensive income) changes in equity and its cashflows for the year then ended.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the "Auditor's Responsibilities for the Audit of the Standalonefinancial statements" section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
4. 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 a separateopinion on these matters.
|Key audit matters ||How our audit addressed the key audit matter |
|Assessment of impairment loss allowance based on expected credit loss (ECL) on Loans (Refer Note 9 of the standalone financial statements) ||The audit procedures performed by us to assess appropriateness of the impairment allowance based on ECL on loans included the following: |
|The loan balances towards vehicle finance home loans loans against property and other loans aggregating to INR 7647789 lakhs and the associated impairment allowances aggregating to INR 232868 lakhs are significant to the standalone financial statements and involves judgement around the determination of the impairment allowance in line with the requirements of the Ind AS 109 "Financial Instruments". || We understood and evaluated the design and tested the operating effectiveness of the key controls put in place by the management over: |
| ||i. the assumptions used in the calculation of ECL and its various aspects such as determination of Probability of Default Loss Given Default Exposure At Default Staging of Loans etc.; |
|Impairment allowances represent management's estimate of the losses incurred within the loan portfolios at the balance sheet date and are inherently judgmental. Impairment based on ECL model is calculated using main variables viz. 'Staging 'Exposure At Default 'Probability of Default' and 'Loss Given Default' as specified under Ind AS 109. ||ii. the completeness and accuracy of source data used by the Management in the ECL computation; and |
| ||iii. ECL computations for their reasonableness. |
|Quantitative factors like days past due behaviour of the portfolio historical losses incurred on defaults and macro-economic data points identified by the Management's expert and qualitative factors like nature of the underlying loan deterioration in credit quality correlation of macro- economic variables to determine expected losses uncertainty over realisability of security judgement in relation to management overlays and related Reserve Bank of India (RBI) guidelines to the extent applicable etc. have been taken into account in the ECL computation. || We along with the assistance of the auditor's our expert verified the appropriateness of methodology and models used by the Company and reasonableness of the assumptions used within the computation process to estimate the impairment provision. |
| || We test-checked the completeness and accuracy of source data used. |
| || We recomputed the impairment provision for a sample of loans across the loan portfolio to verify the arithmetical accuracy and compliance with the requirements of Ind AS 109. |
| || We evaluated the reasonableness of the judgement involved in management overlays that form part of the impairment provision and the related approvals. |
|Given the inherent judgmental nature and the complexity of model involved we determined this to be a Key Audit Matter. ||We evaluated the adequacy of presentation and disclosures in relation to impairment loss allowance in the Standalone Financial Statements. |
|Assessment of Direct tax and Indirect tax litigations and related disclosure of contingent liabilities (Refer to Note 38 (a) of the Standalone Financial Statements) ||Our audit procedures included the following: |
|As at March 31 2022 the Company has exposure towards litigations relating to various tax matters as set out in the aforesaid Notes. || We understood assessed and tested the design and operating effectiveness of key controls surrounding assessment of litigations relating to direct and indirect tax laws and regulations ; |
|Significant management judgement is required to assess matters relating to direct tax and indirect tax litigations to determine the probability of occurrence of material outflow of economic resources and whether a provision should be recognised or a disclosure should be made. The management judgement is also supported with legal advice in certain cases as considered appropriate. || We inquired with management the recent developments and the status of the material litigations which were reviewed and noted by the Audit Committee; |
| || We performed our assessment on a test check basis on the underlying calculations supporting the contingent liabilities related to litigations disclosed in the Standalone Financial Statements; |
|As the ultimate outcome of the matters are uncertain and the positions taken by the management are based on the application of their best judgement related legal advice including those relating to interpretation of laws/regulations it is considered to be a Key Audit Matter. || We used auditor's expert to gain an understanding and to evaluate the disputed tax matters; |
| || We considered external legal opinions where relevant obtained by management and examined by the auditor's expert; |
| || We obtained the listings from the management and got it reconfirmed from management's consultants; |
| || We evaluated the adequacy of presentation and disclosures in relation to litigations in the Standalone Financial Statements. |
|Audit in an Information Technology (IT) enabled environment - including considerations on exceptions identified in IT Environment ||Our audit procedures with respect to this matter included the following: |
|The IT environment of the entity involves a few independent and inter- dependent IT systems used in the operations of the entity for processing and recording of the business transactions. As a result there is a high degree of reliance and dependency on such IT systems for the financial reporting process of the entity. ||In assessing the controls over the IT systems we have involved our Technology Assurance specialists to obtain an understanding of the IT environment IT infrastructure and IT systems. |
|Appropriate IT general controls and IT application controls are required to ensure that such IT systems can process the data as required completely accurately and consistently for reliable financial reporting. ||With respect to the "In-scope IT systems" identified as relevant to the audit of the financial statements and financial reporting process of the entity we have evaluated and tested relevant IT general controls or relied upon service auditor's report where applicable. |
|We have identified certain key IT applications and the related IT infrastructure (herein after referred to as "In-scope IT systems") which have an impact on the financial reporting process and the ||On such "In-scope IT systems" we have covered the key IT general controls with respect to the following domains: |
|related controls as a key audit matter because of the increased level of automation; a few systems being used by the entity for processing financial transactions; and the complexity of the IT architecture; and its impact on the financial records and financial reporting process of the entity. || Program change management which includes that program changes are moved to the production environment as per defined procedures and relevant segregation of environment is ensured. |
| || User access management which includes user access provisioning de- provisioning access review password management sensitive access rights and segregation of duties to ensure that privileged access to applications operating system and databases in the production environment were granted only to authorized personnel. |
| || Other areas that were assessed under the IT control environment included backup management business continuity and disaster recovery incident management batch processing and monitoring. |
| ||We have also evaluated the design and tested the operating effectiveness of key IT application controls within key business processes which included testing automated calculations automated accounting procedures system interfaces system reconciliation controls and key system generated reports as applicable. |
| ||Where control deficiencies have been identified we have tested compensating controls or performed alternative audit procedures where necessary. |
5. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report (Financial HighlightsBoard's report Management Discussion and Analysis and Report on Corporate Governance)but does not include 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 in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the standalonefinancial statements
6. 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 Accounting Standards specified under Section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
7. 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. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.
Auditor's responsibilities for the audit of the standalone financial statements
8. 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.
9. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal 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 with reference to standalone financial statements inplace and the operating effectiveness 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 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 standalonefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
10. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
11. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
12. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
13. The standalone financial statements of the Company for the year ended March312021 were audited by another firm of chartered accountants under the Companies Act1956/ Act who vide their report dated May 07 2021 expressed an unmodified opinion onthose standalone financial statements.
Our opinion is not modified in respect of above matter.
Report on other legal and regulatory requirements
14. As required by the Companies (Auditor's Report) Order 2020 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the Annexure B a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
15. 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 (including other comprehensiveincome) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312022 from being appointed as a director in terms of Section 164(2) of theAct.
(f) With respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure A".
(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 (as amended) inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 38(a) to the standalonefinancial statements;
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer Note 7 and Note 9 to the standalone financial statements;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year.
iv. (a) The management has represented that to the best of its knowledge and beliefno funds have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the Company to or in any other person(s)or entity(ies) including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries")or provide any guarantee security or the like on behalf of the Ultimate Beneficiaries(Refer Note 50A Part II - Other Disclosures to the standalone financial statements);
(b) The management has represented that to the best of its knowledge and belief nofunds have been received by the Company from any person(s) or entity(ies) includingforeign entities ("Funding Parties") with the understanding whether recordedin writing or otherwise that the Company shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Funding Party ("Ultimate Beneficiaries") or provide any guarantee securityor the like on behalf of the Ultimate Beneficiaries (Refer Note 50A Part II - OtherDisclosures to the standalone financial statements); and
(c) Based on such audit procedures that we considered reasonable and appropriate in thecircumstances nothing has come to our notice that has caused us to believe that therepresentations under sub-clause (a) and (b) contain any material misstatement.
v. The dividend declared and paid during the year by the Company is in compliance withSection 123 of the Act.
16. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.
Annexure A to Independent Auditor's Report
Referred to in paragraph 15(f) of the Independent Auditor's Report of even date to themembers of Cholamandalam Investment and Finance Company Limited on the standalonefinancial statements as at the year ended March 31 2022
Report on the Internal Financial Controls with reference to Financial Statements underclause (i) of sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls with reference to financialstatements of Cholamandalam Investment and Finance Company Limited ("theCompany") as of March 312022 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. 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("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingdeemed to be prescribed under Section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both applicable to an audit of internal financialcontrols and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to standalonefinancial statements was established and maintained and if such controls operatedeffectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of internal financialcontrols with reference to standalone financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the standalone financial statements whether due to fraud or error.
5. 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 systemwith reference to standalone financial statements.
Meaning of Internal Financial Controls with reference to financial statements
6. A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles.
A company's internal financial controls with reference to standalone financialstatements includes those policies and 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 standalone financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls with reference to financialstatements
7. Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control controls with reference to standalonefinancial statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at March 312022 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note issued by ICAI.
Annexure B to Independent Auditor's Report
Referred to in paragraph 14 of the Independent Auditor's Report of even date to themembers of Cholamandalam Investment and Finance Company Limited on the standalonefinancial statements as of and for the year ended March 31 2022
i. (a) (A) The Company is maintaining proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment.
(B) The Company is maintaining proper records showing full particulars of IntangibleAssets.
(b) The Property Plant and Equipment of the Company have been physically verified bythe Management during the year and no material discrepancies have been noticed on suchverification. In our opinion the frequency of verification is reasonable.
(c) The title deeds of all the immovable properties (other than properties where theCompany is the lessee and the lease agreements are duly executed in favour of the lessee)as disclosed in Notes 13 and 14 to the standalone financial statements are held in thename of the Company.
(d) The Company has chosen cost model for its Property Plant and Equipment (includingRight of Use assets) and intangible assets. Consequently the question of our commentingon whether the revaluation is based on the valuation by a Registered Valuer or specifyingthe amount of change if the change is 10% or more in the aggregate of the net carryingvalue of each class of Property Plant and Equipment (including Right of Use assets) orintangible assets does not arise.
(e) Based on the information and explanations furnished to us no proceedings have beeninitiated on or are pending against the Company for holding benami property under theProhibition of Benami Property Transactions Act 1988 (as amended in 2016) (formerly theBenami Transactions (Prohibition) Act 1988 (45 of 1988)) and Rules made thereunder andtherefore the question of our commenting on whether the Company has appropriatelydisclosed the details in its financial statements does not arise (Refer Note 50A to thestandalone financial statements).
ii. (a) The Company is in the business of rendering services and consequently doesnot hold any inventory. Therefore the provisions of clause 3(ii)(a) of the Order are notapplicable to the Company.
(b) During the year the Company has been sanctioned working capital limits in excessof Rs 5 crores in aggregate from banks on the basis of security of current assets. TheCompany has filed quarterly returns or statements with such banks which are in agreementwith the unaudited books of account. (Also refer Note 18.1 (vi) to the financialstatements)
iii. (a) The Company is registered with Reserve Bank of India (RBI) under section 45-IAas a non- banking financial company and its principal business is to give loans.Accordingly the provisions of clause 3(iii)(a) of the Order are not applicable to theCompany
(b) Based on our examination and the information and explanations given to us inrespect of investments/ guarantees/ securities/ loans/ advances in nature of loan in ouropinion the terms and conditions under which such loans were granted/ investments weremade/ guarantees provided/ security provided are not prejudicial to the Company'sinterest.
(c) In respect of the loans/ advances in nature of loan the schedule of repayment ofprincipal and payment of interest has been stipulated by the Company. Considering that theCompany is a non-banking financial company engaged in the business of granting loansmajorly to retail customers for vehicle finance affordable housing etc. the entity-wisedetails of the amount due date for payment and extent of delay (that has been suggestedin the Guidance Note on CARO 2020 issued by the Institute of Chartered Accountants ofIndia for reporting under this clause) have not been reported because it is notpracticable to furnish such details owing to the voluminous nature of data generated inthe normal course of the Company's business. Further except for the instances where thereare delays or defaults in repayment of principal and/ or interest the parties arerepaying the principal amounts as stipulated and are also regular in payment ofinterest as applicable. The Company has recognised provisions against the above loans inaccordance with the principles of Indian Accounting Standards (Ind AS) and the guidelinesissued by the Reserve Bank of India ("RBI") for Income Recognition and AssetClassification (refere Note 9 and 53 to the financial statements).
(d) In respect of the loans/ advances in nature of loans the total amount overdue formore than ninety days as at March 312022 is Rs 348118 lakhs. In such instances in ouropinion based on information and explanations provided to us reasonable steps have beentaken by the Company for the recovery of the principal amounts and the interest thereon.Refer Note 9.2 in the standalone financial statements for details of number of cases andthe amount of principal and interest overdue as at March 312022.
(e) This Company is registered with the Reserve Bank of India (RBI) under section 45-IAas a non- banking financial company and its principal business is to give loans.Accordingly the provisions of clause 3(iii)(e) of the Order are not applicable to theCompany.
(f) The loans/advances in nature of loans granted during the year including topromoters/related parties had stipulated the scheduled repayment of principal and paymentof interest and the same were not repayable on demand.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and sub-section (1) of Section 186of the Act in respect of the loans and investments made and guarantees and securityprovided by it. The provisions of sub-sections (2) to (11) of Section 186 are notapplicable to the Company as it is a non-banking financial company registered with the RBIengaged in the business of giving loans.
v. The Company has not accepted any deposits or amounts which are deemed to be depositswithin the meaning of Sections 73 74 75 and 76 of the Act and the Rules framed thereunder to the extent notified. Further the provisions of sub-sections (1) of Section 73are not applicable to the company as it is a non-banking financial company registered withthe RBI engaged in the business of giving loans.
vi. The Central Government of India has not specified the maintenance of cost recordsunder sub- section (1) of Section 148 of the Act for any of the products of the Company.
vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is regular in depositing theundisputed statutory dues including goods and services tax provident fund employees'state insurance income tax sales tax service tax value added tax cess and othermaterial statutory dues as applicable with the appropriate authorities.
(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of statutory dues referred to in sub-clause (a) asat March 312022 which have not been deposited on account of a dispute are as follows:
|Name of the statute ||Nature of dues ||Amount (in ' lakhs) ||Period to which the amounts relates ||Forum where the dispute is pending ||Remarks if any |
|Income Tax Act 1961 ||Tax and interest ||20.52 ||2005-06 ||Assessing Officer || |
|Income Tax Act 1961 ||Tax and interest ||0.11 ||2008-09 ||High Court || |
|Income Tax Act 1961 ||Tax and interest ||641.49 ||1990-911991-92 2009-1 0 ||Income Tax Appellate Tribunal || |
|Income Tax Act 1961 ||Tax and interest ||58.32 ||2015-16 ||Assessing Officer (International Taxation || |
|Income Tax Act 1961 ||Tax and interest ||9951.31 ||2013-14 2015-16 2016-17 2017-18 ||CIT (Appeals) || |
|Bihar Finance Act 1981 ||Sales tax ||2.19 ||1992-93 1993-94 ||Sales Tax Appellate Tribunal Jamshedpur || |
|Delhi Sales Tax Act 1975 ||Sales tax ||7.58 ||1991-92 ||Deputy Commissioner of Sales Tax Appeals || |
|Gujarat Sales Tax Act 1969 ||Sales tax ||2.03 ||1997-98 ||Sales Tax Appellate Tribunal Baroda || |
|Odisha Value Added Tax Act 2004 ||Sales tax ||302.56 ||2007-08 to 2013-14 ||Odisha Sales Tax Appellate Tribunal || |
|Rajasthan Sales Tax Act ||Sales tax ||101.63 ||2006-07 to 2014-15 ||Supreme Court || |
|Rajasthan Sales Tax Act ||Sales tax ||14.73 ||2012-13 2016-17 201 7-1 8 ||Assessing Officer || |
|Tamilnadu General Sales Tax Act 1959 ||TNGST and CST ||998.80 ||1995-96 ||High Court || |
|Tamilnadu Value Added Tax Act 2006 ||Sales tax ||392.58 ||2006-07 to 2013-14 ||High Court || |
|Finance Act 1994 ||Service tax ||19689.95 ||2005-06 to 2017-18 ||CESTAT || |
|Goods and Services Tax Act 2018 ||Goods and Services Tax ||10.96 ||2017-18 ||Commissioner of GST (Appeals) || |
viii. According to the information and explanations given to us and the records of theCompany examined by us there are no transactions in the books of account that has beensurrendered or disclosed as income during the year in the tax assessments under the IncomeTax Act 1961 that has not been recorded in the books of account.
ix. (a) According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or otherborrowings or in the payment of interest to any lender during the year.
(b) According to the information and explanations given to us and on the basis of ouraudit procedures we report that the Company has not been declared Wilful Defaulter by anybank or financial institution or government or any government authority.
(c) In our opinion and according to the information and explanations given to us theterm loans have been applied for the purposes for which they were obtained. (Also referNote 18.1 (v) to the financial statements)
(d) According to the information and explanations given to us and the proceduresperformed by us and on an overall examination of the financial statements of the Companywe report that no funds raised on short-term basis have been used for long-term purposesby the Company.
(e) According to the information and explanations given to us and on an overallexamination of the financial statements of the Company we report that the Company has nottaken any funds from any entity or person on account of or to meet the obligations of itssubsidiaries associates or joint ventures.
(f) According to the information and explanations given to us and procedures performedby us we report that the Company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries joint ventures or associate companies
x (a) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Accordingly the reportingunder clause 3(x)(a) of the Order is not applicable to the Company.
(b) The Company has not made any preferential allotment or private placement of sharesor fully or partially or optionally convertible debentures during the year. Accordinglythe reporting under clause 3(x)(b) of the Order is not applicable to the Company.
xi (a) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company noticed or reported duringthe year nor have we been informed of any such case by the Management.
(b) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us a report under Section 143(12)of the Act in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors)Rules 2014 was not required to be filed with the Central Government. Accordingly thereporting under clause 3(xi)(b) of the Order is not applicable to the Company.
(c) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us the Company has receivedwhistle-blower complaints during the year which have been considered by us for anybearing on our audit and reporting.
xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the reporting under clause 3(xii) of the Order is not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act.
The details of such related party transactions have been disclosed in the financialstatements as required under Indian Accounting Standard 24 "Related Party Disclosuresspecified under Section 133 of the Act.
xiv (a) In our opinion and according to the information and explanation given to usthe Company has an internal audit system commensurate with the size and nature of itsbusiness.
xiv (b) The reports of the Internal Auditor for the period under audit have beenconsidered by us.
xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Accordingly the reporting on compliance with the provisionsof Section 192 of the Act under clause 3(xv) of the Order is not applicable to theCompany.
xvi. (a) The Company is required to and has been registered under Section 45-IA of theReserve Bank of India Act 1934 as an Non Deposit Taking Systemically Important Investmentand Credit Company.
(b) The Company has conducted non-banking financial activities during the year and theCompany holds a valid Certificate of Registration from the Reserve Bank of India as perthe Reserve Bank of India Act 1934.
(c) The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India. Accordingly the reporting under clause 3(xvi)(c) ofthe Order is not applicable to the Company.
(d) Based on the information and explanations provided by the management of theCompany the Group has two CICs as part of the Group has to CICs as part of the Group. Wehave not however separately evaluated whether the information provided by the managementis accurate and complete.
xvii. The Company has not incurred any cash losses in the financial year or in theimmediately preceding financial year.
xviii. There has been resignation of the statutory auditors of the Company during theyear. As stated in the resignation letter dated July 30 2021 of the outgoing statutoryauditors the resignation was pursuant to the "Guidelines for Appointment ofStatutory Central Auditors (SCAs)/ Statutory Auditors (SAs) of Commercial Banks (excludingRRBs) UCBs and NBFCs (including HFCs)" issued by RBI on April 27 2021. We noted noissues objections or concerns raised by the outgoing statutory auditors in theiraforesaid letter.
xix. According to the information and explanations given to us and on the basis of thefinancial ratios (Also refer Note X to the financial statements) ageing and expecteddates of realisation of financial assets and payment of financial liabilities otherinformation accompanying the financial statements our knowledge of the Board of Directorsand management plans and based on our examination of the evidence supporting theassumptions nothing has come to our attention which causes us to believe that anymaterial uncertainty exists as on the date of the audit report that Company is not capableof meeting its liabilities existing at the date of balance sheet as and when they fall duewithin a period of one year from the balance sheet date. We however state that this isnot an assurance as to the future viability of the Company. We further state that ourreporting is based on the facts up to the date of the audit report and we neither give anyguarantee nor any assurance that all liabilities falling due within a period of one yearfrom the balance sheet date will get discharged by the Company as and when they fall due.
xx. (a) In respect of other than ongoing projects as at balance sheet date theCompany does not have any amount remaining unspent under Section 135(5) of the Act.
(b) In respect of ongoing projects as at balance sheet date the Company does not haveany amount remaining unspent under Section 135(5) of the Act. Accordingly reporting underthis clause is not applicable.
xxi. The reporting under clause 3(xxi) of the Order is not applicable in respect ofaudit of Standalone Financial Statements. Accordingly no comment in respect of the saidclause has been included in this report.
|For Sundaram and Srinivasan ||For Price Waterhouse LLP |
|Chartered Accountants ||Chartered Accountants |
|Firm Registration No. : 004207S ||Firm Registration No. : 301112E /E300264 |
|S. Usha ||A. J. Shaikh |
|Partner ||Partner |
|Membership No. : 211785 ||Membership No. : 203637 |
|UDIN : 22211785AIKTFO9980 ||UDIN : 22203637AIKXQO1770 |
|Place : Chennai ||Place : Chennai |
|Date : May 5 2022 ||Date : May 5 2022 |