To The Members of
Northern Projects Limited
Report on the Standalone Financial Statements
We have audited the accompanying Standalone financial statements of Northern ProjectsLimited ("the Company") which comprise the Balance Sheet as at 31st March2017 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary of the significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone 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 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 Act read with Rule 7 of the Companies (Accounts)Rules 2014.This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand 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.
Our responsibility is to express an opinion on these Standalone financial statementsbased 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 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 andthe 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. An audit also includes valuating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof 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 Standalone financial statements.
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 31st March 2017 and its Loss and its cash flows for the year ended on that date.
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(ll) of section 143 ofthe Companies Act2013 we give in the Annexure 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 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 and the Cash Flow Statementdealt with by this 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 read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (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".
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 the impact of pending litigations on its financialposition in its financial statements - Refer Clause (a)of Notel9to the financialstatements;
ii) The Company did not have any long term contracts including derivative contract asat 31st March 2017.
iii) There were no amount which were required to be transferred to the InvestorsEducation and Protection Fund by the company as at 31st March 2017.
iv) The Company has provided requisite disclosures in the financial statement as to theholdings as well as dealings in specified Bank Notes during the period from 8th November2016 to 30th December 2016 - (Refer Clause (h) of Note 19 to the financial statements.
For Salarpuria & Partners
Firm ICAI Reg. No.302113E
ANNEXURE 'A' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to Paragraph 1 of Report on Other Legal and Regulatory Requirements of ourReport of even date)
On the basis of such checks as we considered appropriate and in terms of theinformation and explanations given to us we state that:
i. Since there is no fixed asset as on balance sheet date comment on paragraph (1) isnot applicable.
ii. Since there is no inventory comment on paragraph (2) is not required.
iii. According to the information and explanations given to us the Company has grantedunsecured loan to the companies covered in the register maintained under section 189 ofthe Companies Act 2013.
a) In our opinion the rate of interest and other terms and conditions on which theloans & advances had been granted to the Companies listed in the register maintainedunder Section 189 of the Act were not prima facie prejudicial to the interest of theCompany.
b) In the case of the loans& advances granted to the companies listed in theregister maintained under section 189 of the Act the borrowers have been regular in thepayment of the principal and interest as stipulated and as per mutual consent.
c) There are no overdue amounts in respect of the loans & advances granted toCompanies listed in the register maintained under section 189 of the Act.
iv. According to the information and explanations given to us the Company in respect ofloans investments guarantees and security provision of Section 185 and 186 of theCompanies Act 2013 have been complied with as the Company is a Non Banking FinanceCompany.
v. According to the information and explanations given to us there is no suchdeposits taken by the Company for which directives issued by the Reserve Bank of Indiaand the provisions of sections 73 to 76 or any other relevant provisions of the CompaniesAct2013 and the rules framed there under are required.
vi. As explained to us by the management maintenance of cost records under sub section148(i) of the Companies Act 2013 is not required.
vii. a) According to the records of the Company and as per the information andexplanations given to us it has been regular in depositing undisputed statutory dues likeProvident Fund Employees' State Insurance Income Tax Sales Tax Service Tax CustomsDuty Excise Duty Cess and Other Statutory Dues with the appropriate authorities andthere is no outstanding statutory dues as at 31.03.2017 for the period of more than 6months from the date they became payable.
b) There is no disputed statutory dues which have not been deposited with theappropriate authorities save and except disputed statutory dues in respect of Income Taxamounting to ? 2.45.27 lacs which is pending before ITAT for Assessment years 2002-20032005-2006 and 2006-2007. [Refer Note 19(a)].
viii. On the basis of records examined by us and the information and explanations givento us the Company has not defaulted in repayment of dues to Financial InstitutionsBanks Government or dues to debenture holders.
ix. The Company has not raised any money by way of initial public offer or furtherpublic offer or term loan during the year hence the comment on the said paragraph oforder is not applicable.
x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted audit practices in India andaccording to the information and explanation given to us we have neither come acrossinstance of fraud on or by the Company noticed or reported during the year nor have webeen informed of such case by the management.
xi. Managerial remuneration has been paid by the company in accordance with theprovision of Section 197 read with Schedule V to the Companies Act.
xii. Paragraph 12 regarding the Nidhi Company is not applicable to the Company.
xiii. As explained to us transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 whereas applicable and the details have beendisclosed in notes to accounts as applicable by accounting standard.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year hence comment on the saidparagraph of order is not applicable.
xv. To the best of our knowledge and belief and as per the information and explanationsgiven to us the Company has not entered into any non-cash transaction with directors orpersons connected with him.
xvi. The Company has obtained Registration Under Section 45-IA of Reserve Bank of IndiaAct 1934.
For Salarpuria & Partners
Firm ICAI Reg. No. 302113E
ANNEXURE 'B' TO THE INDEPENDENT AUDITOR'S REPORT
Report on the Internal Financial Controls under Clause (f) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act").
We have audited the internal financial controls over financial reporting of NorthernProjects Limited ("the Company") as of 31st March 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
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'). 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material 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 2017 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.
For Salarpuria & Partners
Firm ICAI Reg. No. 302113E