THE MEMBERS OF
NXTDIGITAL LIMITED (formerly known as Hinduja Ventures Limited)
Report on the Audit of the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of NXTDIGITALLIMITED (formerly known as Hinduja Ventures Limited) ("the Company") whichcomprise the Balance Sheet as at March 312021 the Statement of Profit and Loss(including Other Comprehensive Income) the Statement of Changes in Equity and theStatement of Cash Flows for the year then ended and notes to the standalone Ind ASfinancial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as "standalone Ind AS financialstatements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India including the Indian Accounting Standards ("Ind AS") prescribed undersection 133 of the Act of the state of affairs of the Company as at March 312021 itsloss (including other comprehensive income) changes in equity and its cash flows for theyear ended on that date.
Basis for Opinion
We conducted our audit in accordance with Standards on Auditing (SAs) specified undersection 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone Ind ASFinancial 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 ouraudit of the standalone Ind AS financial statements under the provisions of the Act andRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on thestandalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements of the currentyear. These matters were addressed in the context of our audit of the standalone Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matter described below to bethe key audit matter to be communicated in our report.
|Key audit matter ||How our audit addressed the key audit matter |
|1. Revenue recognition on subscription installation charges carriage and channel placement fees ||Our audit procedures included: |
|The Company is in the business of Media and Communication which is primarily into distribution of TV signals both through Cable and Satellite. The various streams of revenue recognition are revenue from subscription installation charges and carriage and channel placement fees. ||a) Design and Implementation of internal financial controls - |
|Revenue recognition is done basis the subscription plans and tariffs agreements entered with the concerned Multi State Operators and Local Cable Operators. Carriage and channel placement fees are recognised based on the agreements entered with the TV broadcasters. ||We have by way of a walkthrough procedure understood and tested the control design and implementation as established by the Management over revenue recognition. |
|The Company has a huge country wide presence and its operations span across many locations hence there are many peculiarities with respect to contractual terms entered with operators and broadcasters. Also significant judgment is involved in assessing the timing and extent of revenue recognition for installation carriage and channel placement fees. Based on the above factors we have identified revenue recognition as a key audit matter. ||b) Validation of Accounting Policy - |
| ||We have assessed the appropriateness of the Company's accounting policy on revenue recognition by comparing with applicable accounting standards. |
| ||c) Control testing - |
| ||Based on the thorough understanding of the process related to each of the revenue stream and the controls in place in respect of each of the activity involved in the processes we have tested the design and operating effectiveness of the key controls adopted by the Company. |
| ||d) Test of details - |
| ||We have verified the revenue invoices raised in respect of each the streams of revenue on a sample basis along with relevant supporting. |
| ||We have verified the revenue recognised with the underlying agreement/ contractual terms entered into with operators and broadcasters on a sample basis. |
| ||We have verified and assessed the revenue recognition working with the requirements of Ind AS 115. |
| ||We have verified the judgment and estimates made by the management in revenue recognition. |
Emphasis of Matter
We draw attention to Note 49 to the standalone Ind AS financial statements whichexplains the uncertainties and the management's evaluation of the financial impact on theCompany due to lockdown and other restrictions imposed by the local governments on accountof COVID-19 pandemic situation for which a definitive assessment of the impact is highlydependent upon circumstances as they evolve in the subsequent period.
Our opinion is not modified in respect of this matter.
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Directors' Report ManagementDiscussion & Analysis Report etc. but does not include the standalone Ind ASfinancial statements consolidated Ind AS financial statements and our auditor's reportthereon. The Directors' Report Management Discussion & Analysis Report etc. isexpected to be made available to us after the date of this auditor's report.
Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether the other information is materially inconsistent withthe standalone Ind AS financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.
When we read the Directors' Report and Management Discussion & Analysis Report ifwe conclude that there is a material misstatement therein we are required to communicatethe matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the Standalone IndAS 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 standalone Ind AS financialstatements that give a true and fair view of the financial position financial performance(including other comprehensive income) changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including Ind ASprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof
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 standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of this standalone Ind AS financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal 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 with reference to financial statements in place andthe operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting 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 standalone Ind AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone Ind AS financialstatements of the current year and are therefore the key audit matters. We describe thesematters in our auditor's report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.
The audit of standalone Ind AS financial statements for the year ended March 31 2020was carried out and reported by Deloitte Haskins & Sells LLP Chartered Accountantsvide their unmodified audit report dated September 06 2020 whose report has beenfurnished to us by the management and which has been relied upon by us for the purpose ofour audit of the standalone Ind AS financial statements.
Our opinion is not modified in respect of this matter.
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 section 143(11) of the Act we givein "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 ofthe 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 (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis report are in agreement with the books of account;
d. In our opinion the aforesaid standalone Ind AS financial statements comply with theInd AS prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended;
e. On the basis of the written representations received from the directors as on March31 2021 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2021 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate report in "Annexure 2";
g. With respect to the other matter to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid/ provided by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act;
h. 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 standalone Ind AS financial statements - Refer Note 45 on ContingentLiabilities to the standalone Ind AS financial statements;
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses; and
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
Annexure 1 To The Independent Auditor's Report
[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section in the Independent Auditor's Report of even date to the members of NXTDIGITALLIMITED (formerly known as Hinduja Ventures Limited) ("the Company") on thestandalone Ind AS financial statements for the year ended March 31 2021]
Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone Ind AS financial statements of the Company and taking intoconsideration the information and explanations given to us and the books of account andother records examined by us in the normal course of audit we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets except in case of distributionequipment like Cable and Optical fibre network and Set top boxes installed at varioussubscriber's locations. As informed by the management it is impracticable to maintaindetailed records of such assets given the nature of such assets and the Company'sbusiness.
(b) The Company has a program of physical verification of fixed assets to cover all theitems except set top boxes installed at subscriber's location in a phased manner over aperiod of three years which in our opinion is reasonable having regard to the size ofthe Company and the nature of its assets. Pursuant to the program certain fixed assetsexcept for leasehold improvements set top boxes cables and all intangible asset werephysically verified by the management during the year and no material discrepancies werenoticed on such verification.
With respect to set top boxes installed at various subscriber's location due to thenature and location of such assets it is not possible for the management to physicallyverify the set top boxes.
(c) The Company does not have any immovable properties recorded as fixed assets in thebooks of account and hence reporting under clause (i) (c) of the order is not applicable.
(ii) The inventory lying in the books of account consist of Land (Real Estateinventory) media inventory and stock of network cable and equipment. In respect of Landphysical verification of title deeds and regular site visits were done by the Managementand no material discrepancies were noticed on such verification. In respect of mediainventory it cannot be subject to physical verification as it is in the nature of freecommercial time. In respect of stock of network cable and equipment physical verificationwas conducted by the Management at regular intervals and no material discrepancies werenoticed on such verification.
(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Act. Accordingly clause 3(iii) of the Order is not applicable to theCompany.
(iv) The Company has complied with the provisions of sections 185 and 186 of the Act inrespect of grant of loans making investments and providing guarantees and securities asapplicable.
(v) In our opinion the Company has not accepted any deposits from the public withinthe provisions of sections 73 to 76 of the Act and the rules framed there under.Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) The maintenance of cost records has been specified by the Central Government undersub-section (1) of section 148 of the Act and rules thereunder. We have broadly reviewedsuch records and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have not however made a detailed examination of therecords with a view to determine whether they are accurate or complete.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income tax goods andservices tax (GST) customs duty cess and any other material statutory dues applicable toit except that there have been slight delay in few cases.
No undisputed amounts payable in respect of provident fund employees' state insuranceincome tax GST customs duty cess and any other material statutory dues applicable toit were outstanding at the year end for a period of more than six months from the datethey became payable.
(b) There are no dues with respect to GST and excise duty which have not been depositedon account of any dispute. Details of dues outstanding with respect to income tax salestax service tax value added tax customs duty and other material statutory dues onaccount of any dispute are as follows:
|Name of the statute ||Nature of dues ||Amount 'Rs.in lakhs ||Period to which the amount relates ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income Tax ||14.18 ||AY 1999-2000 ||High Court |
|Income Tax Act 1961 ||Income Tax ||101.65 ||AY 2000-2001 ||High Court |
|Income Tax Act 1961 ||Income Tax ||0.35 ||AY 2001-2002 ||High Court |
|Income Tax Act 1961 ||Income Tax ||184.42 ||AY 2002-2003 ||Assessing Officer |
|Income Tax Act 1961 ||Income Tax ||9.34 ||AY 2011-2012 ||Assessing Officer |
|Income Tax Act 1961 ||Income Tax ||2365.89 ||AY 2014-2015 ||Assessing Officer / Commissioner of Income Tax (Appeals)/ |
|Income Tax Act 1961 ||Income Tax ||312.20 ||AY 2015-2016 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act 1961 ||Income Tax ||1152.56 ||AY 2016-2017 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act 1961 ||Income Tax ||151.02 ||AY 2017-2018 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act 1961 ||Income Tax ||222.15 ||AY 2018-2019 ||Commissioner of Income Tax (Appeals) |
|The Maharashtra Entertainment Duty Act 1923 ||Entertainment Tax ||56.00 ||May 2008 to July 2010 ||Office of Tahsildar / Tahsildar Borivali |
|The Maharashtra Entertainment Duty Act 1923 ||Entertainment Tax ||507.09 ||April 2013 to June 2013 ||Office of Tahsildar Borivali Andheri Kurla & Office of Collector Mumbai City |
|The Maharashtra Entertainment Duty Act 1923 ||Entertainm ent Tax ||1261.06 ||April 2013 to October 2014 ||Office of Collector Nagpur / Bombay High Court |
|The Maharashtra Entertainment Duty Act 1923 ||Entertainment Tax ||41.35 ||April 2013 to July 2013 ||Office of Collector Nashik |
|The Maharashtra Entertainment Duty Act 1923 ||Entertainment Tax ||19.77 ||April 2009 to June 2015 ||Office of Collector Mumbai Suburban District |
|The AP Entertainment Duty Act 1939 ||Entertainment Tax ||193.00 ||April2010 to March 2014 ||Commercial Tax Officer Hyderabad |
|The UP Entertainment & Betting tax Act 1979 ||Entertainment Tax ||107.69 ||April 2013 to June 2017 ||District Magistrate Noida |
|Service Tax ||Service Tax - Delhi ||41.45 ||October 2006 to March 2007 ||CESTAT |
|Service Tax ||Service Tax - Delhi ||45.63 ||April2003 to December 2007 ||CESTAT |
|Service Tax ||Service Tax - Delhi ||2.00 ||January 2008 to September 2008 ||CESTAT |
|Service Tax ||Service Tax - Delhi ||3.24 ||October 2008 to June 2009 ||CESTAT |
|Service Tax ||Service Tax - Delhi ||3.38 ||July 2009 to December 2009 ||CESTAT |
|Service Tax ||Service Tax - Delhi ||3.51 ||January 2010 to December2010 ||CESTAT |
|Service Tax ||Service Tax - Mumbai ||9196.49 ||April 2010 to December 2014 ||Commissioner of Service Tax - V Mumbai |
|Service Tax ||Service Tax - Mumbai ||2981.56 ||January 2015 to June 2017 ||Commissioner of Service Tax - V Mumbai |
|Customs Act 1962 ||Customs Duty ||599.00 ||December 2015 to December 2016 ||CESTAT Mumbai |
|Customs Act 1962 ||Customs Duty ||410.91 ||December 2015 to December 2019 ||CESTAT Mumbai |
|Department of Telecommunicati ons ||License Fees ||51559.24 ||FY 2010-11 to FY 2014-15 ||TDSAT |
|West Bengal Value Added Tax Act ||Value Added tax - West Bengal ||44.00 ||April 2012 to March 2013 ||Deputy commissioner |
|Karnataka Value Added Tax Act ||Value Added Tax ||43.25 ||FY 2011-2012 ||Karnataka High Court |
|Karnataka Value Added Tax Act ||Value Added Tax ||62.82 ||FY 2012-2013 ||Karnataka High Court |
|Karnataka Value Added Tax Act ||Value Added Tax ||21.14 ||FY 2015-2016 ||CTO Belgavi |
|Karnataka Value Added Tax Act ||Value Added Tax ||76.74 ||FY 2013-2014 ||CTO Belgavi |
|Karnataka Value Added Tax Act ||Value Added Tax ||66.39 ||FY 2016-2017 ||CTO Belgavi |
|UP Value Added Tax Act 2008 ||Value Added Tax ||23.65 ||FY 2016-2017 ||CTO Noida |
|Gujarat Value Added Tax Act 2003 ||Value Added Tax ||6.01 ||FY 2015-2016 ||VAT Authorities Gujarat |
|Chhattisgarh Value Added Tax Act 2005 ||Value Added Tax ||54.57 ||FY 2015-2016 and FY 2016 - 2017 ||Deputy Commissioner Appeal Raipur |
|Telangana State Value Added Tax Act 2005 ||Value Added Tax ||358.19 ||November 2015 to June 2017 ||Deputy Commissioner - Appeals |
|Telangana State Value Added Tax Act 2005 ||Value Added Tax ||104.47 ||November 2015 to June 2017 ||Deputy Commissioner - Appeals |
|Andhra Pradesh State Value Added Tax Act 2005 ||Value Added Tax ||297.58 ||November 2015 to June 2017 ||Deputy Commissioner - Appeals |
|Andhra Pradesh State Value Added Tax Act 2005 ||Value Added Tax- Vijaywada Penalty ||74.40 ||November 2015 to June 2017 ||Deputy Commissioner - Appeals |
(viii) During the year the Company has not defaulted in repayment of loans orborrowings to financial institutions and banks. The Company has not taken any loans orborrowings from Government nor has it issued any debentures.
(ix) The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) or term loans during the year. Accordinglyclause 3(ix) of the Order is not applicable to the Company.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by themanagement.
(xi) Managerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion the Company is not a Nidhi Company. Therefore clause 3(xii) ofthe Order is not applicable to the Company.
(xiii) All transactions entered into by the Company with the related parties are incompliance with sections 177 and 188 of Act where applicable and the details have beendisclosed in the standalone Ind AS financial statements as required by the applicableaccounting standards.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. Therefore clause 3(xiv)of the Order is not applicable to the Company. The Company has pursuant to the scheme ofarrangement approved by the Honourable National Company Law tribunal received on August21 2020 issued 3495566 equity shares amounting to Rs.349.56 lakhs during the year.
(xv) The Company has not entered into any non-cash transactions with directors orpersons connected with them during the year and hence provisions of section 192 of the Actare not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Annexure 2 To The Independent Auditor's Report
[Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' section in our Independent Auditor's Report of even date to the members of NXTDIGITALLIMITED (formerly known as Hinduja Ventures Limited) on the standalone Ind ASfinancial statements for the year ended March 312021]
Report on the Internal Financial Controls with reference to Financial Statements underclause (i) of sub- section 3 of section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls with reference to financial statementsof NXTDIGITAL LIMITED (formerly known as Hinduja Ventures Limited) ("theCompany") as of March 312021 in conjunction with our audit of the standalone Ind ASfinancial 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 with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India ("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness.
Our audit of internal financial controls with reference to financial statementsincluded obtaining an understanding of internal financial controls with reference tofinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal controls based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto 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 withreference to financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
A company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statements 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 authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to FinancialStatements
Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at March 312021 based onthe internal control with reference to financial statements criteria established by theCompany considering the essential components of internal controls stated in the GuidanceNote issued by the ICAI.
|For Haribhakti & Co. LLP Chartered Accountants |
|ICAI Firm Registration No.103523W / W100048 |
|Snehal Shah Partner |
|Membership No. 048539 UDIN: 21048539AAAABJ2178 |
|Place: Mumbai |
|Date: May 13 2021 |