INDEPENDENT AUDITOR'S REPORT
To The Shareholders of High Ground Enterprise Ltd.
Report on the Financial Statements
(1) We have audited the accompanying Standalone financial statements of High GroundEnterprise Ltd. which comprise the Balance Sheet as at March 31 2017 the Statement ofProfit and Loss Cash Flow Statement for the year then ended and a summary of significantaccounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
(2) The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 with respect to the preparation and presentation ofthese Standalone 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 Companies Act2013(The Act") read with Rule7 of the Companies (Accounts) Rules 2014. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate 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 statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
(3) Our responsibility is to express an opinion on these Standalone financialstatements based on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection143 (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.
(4) An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.
(5) 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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 and its Profit and its Cash Flow for the year ended on that date.
Report on Other Legal and Regulatory Requirements
(6) As required by the Companies (Auditor's Report) Order 2016 ("theOrder") as amended issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order.
(7) 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 purpose 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 financial statements comply with the AccountingStandards specified under section 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 March 312017 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct.
f. 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 2017 based oninternal 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.
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 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed all its pending litigations in the notes to accounts;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
"Annexure A" to the Independent Auditors' Report
Referred to in paragraph 1 under the heading Report on Other Legal & RegulatoryRequirement' of our report of even date to the financial statements of the Company for theyear ended March 31 2017:
1) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
(b) The Fixed Assets have been physically verified by the management at reasonableintervals and such verification has revealed no material discrepancies. In ouropinion having regard to the size of the company and nature of its business thefrequency of physical verification of the fixed assets is reasonable.
(c) The title deeds of immovable property owned by the company are duly held in thename of the company.
2) (a) The inventory (Comprising of project materials of finished goods work inprogress & raw material and film related rights) have been physically verifiedby the management at reasonable intervals during the year. In our opinion thefrequency of such verification is reasonable
The procedure of physical verification of inventory followed by the management isreasonable and adequate in relation to the size of the Company and the nature ofits business.
In our opinion the Company has maintained proper records of inventory. As explained tous no material discrepancies were noticed on physical verification as compared tothe book records.
3) According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has granted one loan unsecured to acompany covered in the Register maintained under section 189 of the Act:
(a) The terms and conditions of the grant of such loan is not prejudicial to thecompany's interest.
(b) The schedule of repayment of principal and payment of interest has been stipulatedand the repayments and receipts are regular.
(c) The total amount which is overdue for more than ninety days is Rs.140.26 lakhs andwe have been informed by the company that the same is being repaid and the loan will becleared in the due course.
4) Mr. Sandeep R. Arora has been appointed as Director of Picture Thoughts ProductionPrivate Limited w.e.f 10/10/2016 and the loan given to the company as reflected in theFinancial Statements was granted to it before his appointment as director of the companyand thus in our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013in respect of loans investments guarantees and security.
5) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the rules framed there under does not apply.
6) As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the company.
7) In respect of applicable statutory dues according to information and explanationsgiven to us:
(a) Undisputed applicable statutory dues including Provident Fund Investor Education& Protection Fund Employees' State Insurance Income Tax Wealth Tax Sales TaxService Tax Customs Duty Excise Duty Cess and any other statutory dues as applicablehave generally been regularly deposited with the appropriate authorities. Undisputedstatutory dues remaining unpaid as at 31.03.2017 for more than six months from the datethey become payable are reported as under:
|Particulars ||Amount |
| ||(Rs.in Lakhs) |
|Service Tax ||44.95 |
|TDS ||45.65 |
|Works Contract Tax / Profession Tax Payable ||90.24 |
|Total ||180.84 |
(b) There were no dues of Income tax Sales tax Service tax Cess and Customs DutyExcise Duty and Value Added Tax which have not been deposited as on 31st March2017 onaccount of any dispute except the following:
|Particulars ||Year ||Amount |
| || ||(Rs. In Lakhs) |
|Income Tax ||A.Y. 2014-15 ||1628.38 |
|TDS ||F.Y. 2013-14 ||0.33 |
|TDS ||F.Y. 2014-15 ||4.18 |
|TDS ||F.Y. 2015-16 ||1.79 |
|TDS ||F.Y. 2016-17 ||64.57 |
|Total || ||1699.25 |
8) In our opinion and according to the information and explanations given to usthe Company has not made any default in the repayment of dues to from facility taken fromBank/Financial Institutions/debenture holders.
9) Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
10) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
11) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;
12) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3 (xii) of the Order are not applicable to the Company.
13) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
14) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview.
15) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
16) In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.
For and on behalf of
Jain Chowdhary & Co.
Dated: 30th May 2017