The Members of
Encash Entertainment Limited
We have audited the accompanying financial statements of Encash EntertainmentLimited (the company') which comprises the Balance Sheet as at 31st March2018the Statement of Profit and Loss and the Cash Flow Statement for year then ended anda summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements :
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the Act') with respect to the preparation andpresentation of these financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes the maintenance of adequate accountingrecords in accordance with the provision 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 financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Auditor's Responsibility :
Our responsibility is to express an opinion on these financial statements based on ouraudit. While conducting the audit we have taken into account the provisions of the Actthe accounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances but not for the purpose of expressing an opinion onwhether the Company has in place an adequate internal financial controls system overfinancial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by Company's Directors as well as evaluating the overallpresentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
Basis for Qualified Opinion :
The Company had defaulted in filing of the applicable GST Returns for the F.Y. 2017-18.However necessary provisions towards the GST liability have been provided.
Qualified Opinion :
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the Basis of QualifiedOpinion paragraph the financial statements read together with the Notes thereon andattached thereto give the information required by the Act in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at 31st March 2018 its profit andits cash flows for the year ended on that date.
Report on other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 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 statement on the matters specified in paragraphs 3 and4 of the Order to the extent applicable.
As required by section 143(3) of the Act we report that :
a) We have sought and obtained all the information and explanations which to the 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 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) Except for the effect of the matter referred in basis of qualification theaforesaid financial statements comply with the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014;
e) On the basis of written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in terms ofSection 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"; and
g) With respect to the other matters included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us :
i) The Company has no pending litigations on its financial position in its financialstatements which will be effecting it going concern status and company's operation infuture;
ii) The Company did not have any long-term contracts including derivatives contracts asat 31st March 2018;
iii) There were no amounts which required to be transferred to the Investor Educationand Protection Fund by the Company.
Annexure to Independent Auditors' Report
(Referred to in Paragraph 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date to the Members of EncashEntertainment Limited for the year ended March 31 2018.)
1. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b The fixed assets of the Company have been physically verified by the managementduring the year and no material discrepancies were noticed on such verification.
2. (a) Inventories have been physically verified by the management during the year atreasonable intervals.
(b) The procedures of physical verification of inventories followed by the managementare reasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
(c) The Company is maintaining proper records of its inventories and no materialdiscrepancies noticed on physical verification of inventories.
3. The Company has not granted loans secured or unsecured to companies firms orparties covered in the Register maintained under section 189 of the Companies Act 2013.Therefore the provisions of clause 3(iii) (iii)(a) and (iii)(b) of the said Order are notapplicable to the Company.
4. In our opinion and according to the information and explanations given to us thereare adequate internal control procedures commensurate with the size of the company and thenature of its business with regard to purchase of inventories and fixed assets and forsale of goods. During the course of our audit no major weakness has been noticed in theinternal controls. During the course of our audit we have not observed any continuingfailure to correct major weakness in internal control system of the Company.
5. The company has not accepted any deposits from the public within the meaning ofsection 73 74 75 and 76 of the Companies Act 2013 and the Rules framed thereunder tothe extent notified.
6. The Central Government of India has not specified the maintenance of cost recordsunder sub-section (1) of section 148 of the Companies Act 2013 for any of the products ofthe Company.
7. (a) According to the information and explanations given to us and on the basis ofthe examination of the records of the Company we are of the opinion that the Company hasbeen generally regular in depositing undisputed statutory dues including provident fundemployees state insurance income tax sales tax wealth tax service tax and othermaterial statutory dues as applicable with the appropriate authorities except GST.
(b) There were no amounts which required to be transferred to the investor educationand protection fund by the Company.
8. The accumulated losses of the Company at the end of the financial year are less thenfifty percentage of its networth. The Company has not incurred cash losses during thecurrent year.
9. The company did not raise any money by way of initial public offer or further publicoffer including debt instruments during the year
10. According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.
11. According to the information and explanations given 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.
12. The Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order isnot applicable.
13. 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 applicableaccounting standards.
14. According to the information and explanations given 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 year. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.
15. 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 in terms of section 192 of the Act with directors or persons connected withhim. Accordingly paragraph 3(xv) of the Order is not applicable.
16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
ANNEXURE - B TO THE INDEPENDENT AUDITOR'S REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of EncashEntertainment Limited ("the Company") as of 31st March 2018 in conjunction withour audit of the financial statements of the Company for the year ended on that date.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial 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 financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that :
(1) pertain to the maintenance 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 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.