To The Members of
Nalwa Sons Investments Limited
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Nalwa Sons Investments Limited (the Company) which comprise the Balance Sheet as at March 31 2019 the Statement of Profit and Loss and Statement of Cash Flows for the year then ended and notes to the financial statements including a summary of the significant accounting policies and other explanatory information. (herein after referred to as the standalone financial statements).
In our opinion and to the best of our information and according to the explanations given to us the aforesaid standalone financial statements give the information required by the Companies Act 2013 (the Act) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31 2019 its profit and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the `Code of Ethics' issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements.
Emphasis of Matters
We draw attention to the following matter in Note No. 22 to the standalone financial statements: -
The Company has made long term investments in subsidiary and associate companies of 9161.73 Lakhs and in certain other companies of 1844.83 Lakhs where there is diminution in value of investments. The amount of diminution is not readily ascertainable because of layer effect of accretion/diminution of investments held by those Companies. Such diminution in the opinion of the management being long term strategic investment and future cash flows is temporary in nature and as such no provision is considered necessary. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of most significance in our audit of the financial statements for the financial year ended March 31 2019. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters.
|Key audit matters||How our audit addressed the key audit matter|
|Disputed Income Tax Demands (as described in note no. 21 to the standalone financial statements)|
|The Company has received income tax demand orders and notices relating to disallowances of certain deductions expenses which are under litigation. The Company is contesting these demands.||Our audit procedures included the following:|
| Assessed the progress of all significant litigations tax demands and contingencies.|
|The unexpected adverse outcomes of such litigations and tax demands could materially impact the Company as the outcome of such legal actions is uncertain and the positions taken by the management are based on the legal opinions obtained by the Company.|| Evaluated management's assessment of the likely outcome and considered the requirements for any provision.|
|The amounts involved may be significant and estimates of the amounts of provisions or contingent liabilities are subject to significant management judgement.|| Inquired with both legal and finance personnel in respect of ongoing litigations or tax demands proceedings inspected relevant correspondence.|
|Also obtained legal confirmation letters on sample basis from external legal experts. |
|Accordingly this matter has been determined to be a key matter in our audit of the financial statements.|| Assessed the related disclosure of litigations tax demands and other contingencies as described in the financial statements.|
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Company's Annual Report but does not include the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If based on the work we have performed we conclude that there is a material misstatement of this other information 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 Financial Statements
The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position financial performance and cash flows of the Company in accordance with the Accounting Standards specified under section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement whether due to fraud or error.
In preparing the financial statements Board of Directors is responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit in order to design 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 has adequate internal financial controls system in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the 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's report. However future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financial statements including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 (the Order) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. 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 best of 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 the Company so far as it appears from our examination of those books;
c. The Balance Sheet the Statement of Profit and Loss and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account;
d. In our opinion the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 as amended;
e. On the basis of the written representations received from the directors as on March 31 2019 taken on record by the Board of Directors none of the directors is disqualified as on March 31 2019 from being appointed as a director in terms of Section 164(2) of the Act;
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure B. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting;
g. In our opinion the managerial remuneration for the year ended March 31 2019 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
h. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 21 to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company;
For Doogar & Associates
Firm Registration No. 000561N
Membership No. 517347
Date: May 30 2019
ANNEXURE `A' TO THE INDEPENDENT AUDITOR'S REPORT
(Annexure A referred to in paragraph 1 under `Report on other legal and Regulatory Requirements' of our report to the Members of Nalwa Sons Investments Limited of even date)
Report on the matters specifiedin paragraph 3 of the Companies (Auditor's Report) Order 2016 (the Order') issued by the Central Government of India in terms of section 143(11) of the Companies Act 2013 (the Act)
1. In respect of Company's fixed assets
a) The Company has maintained proper records showing full particulars including quantitative details and situation of property plant & equipment.
b) We have been informed that property plant & equipment have been physically verified by the management during the year which in our opinion is reasonable and no discrepancies were noted on such verification.
c) The Company does not own any immovable property in the name of the Company. Therefore reporting under Paragraph 3(i)(c) of the Order is not applicable to the Company.
2. The Company does not have any inventory and hence reporting under clause (ii) of the CARO 2016 is not applicable.
3. The Company has given interest bearing unsecured demand loans to Companies covered in the register maintained under Section 189 of the Companies Act 2013. However the Company has not given any loan to firms limited liability partnership or other parties covered in the register maintained under Section 189 of the Companies Act 2013.
a) In our opinion the terms and conditions on which the loans had been granted to the bodies corporate listed in the register maintained under Section 189 of the Act were not prima facie prejudicial to the interest of the Company.
b) In respect of aforesaid loan the amount principal as well as interest accrued thereon is repayable on demand and hence the question of repayment schedule and irregularity on payment of principal and interest does not arise.
c) The aforesaid loan is repayable on demand and therefore the question of overdue amount does not arise.
4. According to the information and explanations given to us and on the basis of our examination of the records of the Company there are no loans investments guarantees and securities granted in respect of which provisions of section 185 and Section 186 are applicable to the Company except 186(1) and hence not commented upon. The Company has not made any investments through more than two layers of investment companies as required in Section 186(1) of the Act.
5. According to the information given to us the Company has not accepted any deposits under the provision of Section 73 to 76 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 as amended from time to time wherever applicable. Therefore the provisions of clause 3(ix) of the order are not applicable to the Company.
6. According to the explanation and information given to us and to the best of our knowledge the Central Government has not specified the maintenance of cost records under section 148(1) of the Act for the services of the Company.
7. According to the information and explanations given to us in respect of statutory dues:
a) The Company is generally regular in depositing undisputed statutory dues including provident fund employees' state insurance income-tax sales tax service tax customs duty excise duty value added tax goods and service tax cess and other material statutory dues applicable to it with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they become payable as at March 31 2019.
b) According to the information and explanations given to us the dues outstanding of income tax which have not been deposited on account of any dispute are as follows: -
|Name of the Statute||Period to which the amount relates (FY)||Forum where matter is pending||Amount ( in Lacs)|
|Income Tax Act 1961||2005-06||High Court New Delhi||662.96|
|Income Tax Act 1961||2012-13||Income Tax Appellate Tribunal New||46.47|
|Income Tax Act 1961||2013-14||Delhi||46.23|
|Income Tax Act 1961||2014-15||39.21|
8. According to the information and explanations given to us the Company has not taken any loan from financial institutions banks government and debenture holders. Therefore the provisions of Paragraph 3 (viii) of the Order are not applicable.
9. The Company has not raised any money by way of initial public offer further public offer (including debt instruments) or term loans. Accordingly the provisions of clause 3(ix) of the order are not applicable to the Company.
10. According to the information and explanations given by the Management and to the best of our knowledge we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
11. The Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act 2013.
12. The Company is not a Nidhi company. Accordingly the provisions of clause 3(xii) of the order are not applicable to the Company and has not commented upon.
13. According to the information and explanations given by the Management transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and the details have been disclosed in the notes to the standalone financial statements as required by the applicable Accounting Standards.
14. According to the information and explanations given to us and based on our examination of the records of the Company the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly the provision of clause 3(xiv) are not applicable to the company.
15. According to the information and explanations given to us and based on our examination of the records of the Company the Company has not entered into any non-cash transactions with directors or persons connected with him as covered under Section192 of the Companies Act 2013.
16. According to the information and explanations given to us we report that the Company has registered as required under section 45-IA of the Reserve Bank of India Act 1934.
For Doogar & Associates
Firm's Registration No. 000561N
Membership No. 517347
Place: - Hisar
Date: - May 30 2019