To The Members of
GANESH HOLDING LIMITED
Report on the Audit of the Financial Statements Qualified
We have audited the accompanying financial statements of Ganesh Holding Limited("the Company") which comprise the Balance Sheet as at March 31 2021 and theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information. In our opinion and tothe best of our information and according to the explanations given to us the aforesaidfinancial statements give the information required by the Companies Act 2013 ("theAct") in the manner so required and give a true and fair view in conformity with theIndian Accounting Standards prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended ("Ind AS") andother accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2021 and its profit total comprehensive income its cash flowsand the changes in equity for the year ended on that date.
Basis for Qualified Opinion
1) As stated on note no 4 bought and sold commodities through broker Anand RathiCommodities Limited who is registered with NSEL. Due to NSEL scam all stock as on thedate was not delivered and business had stopped. In August 2013 the committee of NSEL hasdecided to Pay money to investor in small amount. Hence the company has decided to convertthe stock into recoverable under other current assets. Since long nothing is recoveredagainst this advance management as per their resolution dated 12-02-2018 decided to w/off7.50% of the advances as Bad Debts every year till it becomes nil subject to availabilityof profit. The management has decided to make provision on yearly instead of quarterlybasis but management did not make provision of the same and Rs 6706657 appearing asreceivable from Anand Rathi in the financial statement as on 31st March 2021 the companyneed to following provisioning requirement in line of master circular no RBI/2014-15/299DNBR (PD) CC No 002/03 10 001/2014-15 further in absence security and development of caseit is highly doubtful and we are unable to comment on recoverability of carrying amount ason 31st March 2021
2) RBI has cancelled the license of NBFC due to non-compliance of notification givenbelow:
NBFCs are required to obtain a certificate of registration (COR) to commence/carry onbusiness of NBFI in terms of section 45-IA of the RBI act 1934. the said section alsoprescribes the minimum Net Owned Fund (NOF) requirement. In terms of notification no.DNBS.132CGM(VSNM)-99 dated April 21 1999 the minimum NOF requirement for new companiesapplying for grant of COR to commence a business of NBFC is stipulated at Rs 200 lakh. theminimum NOF for companies that were already in existence before April 21 1999 wasretained at Rs. 25 Lakh. given the need for strengthening the financial sector andtechnology adoption and in view of increasing the complexities of services offered byNBFCs it shall be mandatory for all the NBFCs to attain a minimum NOF of Rs. 200 Lakh bythe end of March 2017 as per the milestone given below Rs. 100 Lakh by the end of March2016 Rs. 200 Lakh by the end of March 2017 However management has filed an appeal againstthe same with ministry of finance Delhi on 26/10/2018 which was heard on 05/09/2019 and anorder dated 27/04/2020 received from Ministry of Finance stating that RBI may review itsorder cancelling COR of the company. Now awaiting RBI action for the same.
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibility for the Audit of theFinancial 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 (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our qualified opinion on the financialstatements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current periodMarch 31St 2021. These matters were addressed in the context of our audit ofthe financial statements as a whole and in forming our opinion thereon and we do notprovide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.
|Key audit matter ||How our audit addressed the key audit matter |
|Impairment of Loans & advance || |
|The impairment review of loan & advance of Rs. 6706657 is equal to 29% of total asset is considered to be a risk area due to the size of the balances as well as judgmental nature of key assumption which may be subject to management override. ||1) Benchmarking assumption: comparing the company assumptions to externally derived data in relation to key input such as long-term growth rate and discount rate. |
|The carrying value of such loan and advances is at risk of recoverability. ||2) Our experience: assessing the appropriateness of the forecasted cash flow within the budgeted period based on our understanding of the business and sector experience. |
|The estimated recoverable amount is subjective due to the inherent uncertainty involved in forecasting and discounting future cash flow. ||3) Sensitivity analysis: performing sensitivity analysis in relation to the key assumptions. |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Director's report Managementdiscussion & Analysis and Business responsibility report but does not include thefinancial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon. In connection with our audit of thefinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated. If based on the work we have performed we conclude thatthere is a material misstatement of this other information; we are required to report thatfact. We have nothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe IND AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror. 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. The Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibility 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 weexercise professional judgment and maintain professional skepticism throughout the audit.We also: Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.Obtain an understanding of internal financial control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls. Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements. We communicate with those chargedwith governance regarding among other matters the planned scope and timing of the auditand significant audit findings including any significant deficiencies in internal controlthat we identify during our audit. We also provide those charged with governance with astatement that we have complied with relevant ethical requirements regarding independenceand to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence and where applicable related safeguards. From thematters communicated with those charged with governance we determine those matters thatwere of most significance in the audit of the financial statements of the current periodand are therefore the key audit matters. We describe these matters in our auditor's reportunless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh 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 inparagraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act based on our audit 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 Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses Qualified opinionon the adequacy and operating effectiveness of the Company's internal financial controlsover financial reporting. With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Act asAmended in our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.
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:
1) As per information and explanation given to us Company does not have any pendinglitigations which would impact its financial position.
2) The Company has made provision as required under the applicable law or IND AS formaterial foreseeable losses if any on long-term contracts including derivativecontracts;
3) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
"Annexure A" to the Independent Auditor's Report of even date on theFinancial Statement of Ganesh Holding Limited
Referred to in paragraph 1 under the heading Report on Other Legal &Regulatory Requirement' of our report of even date to the financial statements of theCompany for the year ended March 31st 2021:
1) The company is not having any fixed asset and therefore this clause is notapplicable to the company.
2) The company is not having any inventory and therefore this clause is not applicableto the company.
3) The company has not granted any loan secured or unsecured to any companies firmsor other parties covered in register maintained under Section 189 of the Companies Act2013. Hence clause (iii) (a) clause (iii) (b) and clause (iii) (c) of paragraph 3 of theorder are not applicable;
4) In our opinion and according to the information and explanations given to us thecompany has not given any loan guarantee or made investment nor provided any securityunder the provision of Section 185 and 186 of the Companies Act 2013.
5) In our opinion and according to the information and explanations given to us thecompany has not accepted deposits from the public. Therefore the provisions of section 73to 76 or any other relevant provisions of the Companies Act 2013 and the rules framedthere under and the directives issued by the Reserve Bank of India are not applicable;
6) We have been informed that the maintenance of cost records has not been prescribedby the Central Government under Section 148(1) of the Companies Act 2013;
7) According to the information and explanations given to us in respect of statutoryand other dues:
a) Undisputed statutory dues including Provident Fund Income Tax Sales Tax Cess andother material statutory dues as applicable have generally been regularly deposited by thecompany during the year with the appropriate authorities;
b) According to the information & explanation given to us no undisputed amountspayable in respect of such statutory dues were outstanding as at 31st March2021 for a period of more than six months from the date they became payable;
8) 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 borrowingsto any financial institution or bank or Government or dues to debenture holders as at theBalance Sheet date.
9) According to the information and explanation given to us the company has not raisedmoney by way of Initial Public offer or Further Public offer (including Debt Instrument)and by way of Term Loan. Accordingly paragraph 3(ix) of the Order is not applicable; 10)During the course of our examination of the books and records of the company carried inaccordance with the Ind As generally accepted in India we have neither come across anyinstance of fraud on or by the Company noticed or reported during the course of our auditnor have we been informed of any such instance by the Management;
11) According to the information and explanation given to us the Company has not paidor provided any Managerial Remuneration. Therefore this clause of the said order is notapplicable;
12) In our opinion and according to the information and explanation given to us; TheCompany is not a Nidhi company as prescribed under Section 406 of the Act. Accordinglyparagraph 3(xii) of the Order is not applicable;
13) During the course of our examination of the books and records of the company alltransactions with related parties are in compliance with Sections 177 and 188 of CompaniesAct 2013 and the details have been disclosed in the Ind AS Financial Statements etc. asrequired by Applicable Accounting Standards.
14) According to the information and explanation given to us the company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3(xiv) of the Order is not applicable;
15) According to the information and explanation given to us the company has notentered into any non-cash transactions with directors or persons connected with him.Accordingly paragraph 3(xv) of the Order is not applicable.
16) In our opinion the company was registered under section 45-IA of the Reserve Bankof India Act 1934 and Accordingly but RBI has cancelled the license of NBFC due to non-compliance of notification No. DNBS.132/CGM(VSNM)-99 Please refer note no 2 of basis ofqualification para.
"Annexure B" to the Independent Auditor's Report of even date on theFinancial Statements of Ganesh Holding Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
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 March 31 2021 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.
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". These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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.