To the Members of RegalEntertainmentand Consultants Limited
Report on the Audit of the Financial Statements
1. We have audited the accompanying financial statements of Regal Entertainment andConsultants Limited ("the Company") which comprise the Balance Sheet as at31stMarch 2019 the Statement of Profit and Loss(including Other Comprehensive Income)andnotes to the financial statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "the financialstatements")
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the Basis forQualified Opinion'section of our report the aforesaid financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Accounting Standardsprescribedunder section 133 of the Act read with the relevant rules issues thereunder andother accounting principles generally accepted in India of the state of affairs of theCompany as at 31stMarch 2019 the loss and its cash outflows for the year ended on thatdate.
Basis for Qualified Opinion
2. The Company has prepared its accounts on a going concern basisdespite the fact thatthe Reserve Bank of India has cancelled Certificate of Registration of the Company asNBFC.The Management's explanation for the Company's future viability and ability tocontinue as a going concern as per note no. 2(17) to the Financial Statements has beenrelied upon.
3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act (SAs). Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the FinancialStatements'section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI) togetherwith the ethical requirements that are relevant to our audit of thefinancial statementsunder the provisions of the Act and the Rulesthereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the financial statements.
Key Audit Matters
4. Key Audit Matters (KAM') are those matters that in our professionaljudgement were of most significance in our audit of the financial statements of thecurrent audit period. These matters were addressed in the context of our audit of thefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe Key Audit Matters to be communicated in our report.
|Key Audit Matter ||Auditors' Response |
|Recoverability of Deferred Tax Assets (as described in note 9 of the financial statement) ||Principal Audit Procedures: |
| ||We reviewed the existing process ofthe Company to identify the impact the AS 12. Our audit procedure included the following: |
|At March 31 2019 net deferred tax assets recognized were Rs. 24959. || |
|The deferred tax assets recognized includes deferred tax on account of depreciation of Rs. 24959. The recognition of deferred tax assets involves judgement regarding the likelihood of the realization of these assets in particular whether there will be sufficient taxable profits in future periods that support the recognition of these assets. ||Our procedures included obtaining an understanding of the process and testing the controls over preparation of the taxable profit forecast. |
|Given the degree of judgement involved in considering these deferred tax assets as recoverable or otherwise we considered this to be a key audit matter. ||We performed procedures to test the inputs and assumptions used in the taxable profit forecast against historical performance economic and industry indicators publicly available information and including strategic plans. |
| ||We inspected the disclosures in respect of the deferred tax asset balances including those disclosures related to significant accounting judgements and estimates. |
Information Other than theFinancial Statements and Auditor's Report Thereon
5. The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysisand Director's Report including annexures to Director's Reportbutdoes not include the financial statements and our auditors' report thereon.
Our opinion on thefinancial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
6. In connection with our audit of the financial statements our responsibility is toread the other information and in doing so consider whether the other information ismaterially inconsistent with thefinancial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
7. The Company's management and Board of Directors are responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fairview of the financial position financial performanceand cash flows of the Company in accordance with the Accounting Standards prescribed underSection 133 of the Companies Act 2013 and other accounting principles generally acceptedin India. This responsibility also includes maintenance of adequate accounting records inaccordance 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 judgements 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.
8. In preparing thefinancial 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 the company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
9. 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 thesefinancialstatements.
The description of the auditor's responsibilities for the audit of the financialstatements is given in "Appendix I" to this report.
Report on Other Legal and Regulatory Requirements
10. 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 specifiedin paragraphs 3 and 4 of the Order to the extent applicable.
11. As required by Section 143(3) of the Act based on our auditwe report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit.
b) Except for the effects of the matters described in the Basis for Qualified Opinionparagraph above in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Lossand Statement of Cash Flow dealtwith by this Report are in agreement with the books of account.
d) Except for the effects of the matters described in the Basis for Qualified Opinionparagraph above in our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 133 of the Act;
e) On the basis of the written representations received from the directors as on31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31stMarch 2019 from being appointed as a director in terms of Section164(2) of the Act.
f) With respect to the existence 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 B". Our report expresses anunmodified opinion on the existence and operating effectiveness of the internal financialcontrol over financial reporting of the company.
g) In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the company to its directors during the year iswithin the limit laid down in 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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company does not have any pending litigations which would impact its financialposition.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. The Company is not required to transfer funds to the Investor Education andProtection Fund.
For C K S P AND CO LLP
Membership No: 135047
Date : 30th May 2019
APPENDIX I: THE FURTHER DESCRIPTION OF THE AUDITOR'S RESPONSIBILITIES FOR THEAUDIT OF THE FINANCIAL STATEMENTS
As part of an audit in accordance with SAs we exercise professional judgment andmaintain 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness 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 exists we are required to draw attention inour auditors' report to the related disclosures in the financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves 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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 8(I) under the heading of Report on Other Legal andRegulatory Requirements' of our report of even date)
i. In respect of its fixed assets:
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 as per the programof verification followed by the Company. In our opinion the frequency of verification ofthe fixed assets by the management is reasonable having regard to the size of the Companyand the nature of its assets. According to the information and explanations given to usno material discrepancies were noticed on such verification.
(c) The Company does not hold any immovable properties in its name. Hence clause3(i)(c) of the Order is not applicable to the Company.
ii. As the Company does not have inventories the clause 3 (ii) of the Order is notapplicable.
iii. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to Companies Firms Limited LiabilityPartnerships or other parties covered in the register maintained under Section 189 of theCompanies Act 2013 ("the Act"). Accordingly clause 3(iii) (a) to (c) are notapplicable to the Company.
iv. According to the information and explanations given to us there are no loansinvestments guarantees and security covered by the provisions of Section 185 and 186 ofthe Act.
v. The Company has not accepted any public deposits within the meaning of Section 73 to76 of the Act and rules framed there-under. We are informed that no order has been passedby the Company Law Board or Reserve Bank of India or any Court or any other Tribunal.Accordingly paragraph 3(v) of the Order is not applicable to the Company.
vi. According to the information and explanations given to us the Company has notundertaken manufacturing activity during the current year. Hence the clause 3(vi) of theOrder regarding maintenance of cost records under Section 148(1) of the Act is notapplicable to the Company.
vii. (a) In our opinion and according to the information and explanations given to usthe Company has generally been regular in depositing applicable undisputed statutory duesincluding provident fund employees' state insurance income tax sales tax wealth taxservice tax custom duty duty of excise value added tax cess goods and service tax andany other statutory dues to the appropriate authorities during the year.
(b) According to the records of the Company and representation made available to us bythe Company there are no dues of income tax or sales tax or wealth tax or service tax orduty of customs or duty of excise or value added tax or goods service tax which have notbeen depositedon account of any dispute.
viii. In our opinion and according to the information and explanations given to usthe Company has not borrowed any money from financial institutions banks or debentureholders. Accordingly the provisions of clause 3(viii) of the Order is not applicable tothe Company.
ix. The Company has not raised any fund by way of public issue or from term loan.
x. During the course of our examination of the books of accounts carried out inaccordance with the generally accepted auditing standards in India and according to theinformation and explanation given to us we have not come across any instance of fraud bythe Company or any fraud on the Company by its officers or employees either noticed orreported during the year on or by the Company.
xi. As per the information and explanation given to us no managerial remuneration paidhence the clause (xi) of the Order regarding managerial remuneration is not applicable.
xii. The Company is not the nature of Nidhi Company as defined under Section 406 of theAct. Accordingly paragraph 3(xii) of the Order is not applicable to the Company.
xiii. All transactions with the related parties are in compliance with Sections 177 and188 of the Act where applicable and the details have been disclosed in the FinancialStatements as required by the applicable accounting standards.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review and hence reportingunder paragraph 3 (xiv) of the Order is not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with directors orpersons connected with him and hence clause 3(xv) of the Order is not applicable to theCompany.
xvi. The Company is registered under Section 45-IA of the Reserve Bank of India Act1934 and the registration certificate has been obtained. However based on the auditedfinancial statements for the year ended 31.03.2017 the Net Owned Funds of the Company isless than the level prescribed by the RBI. Consequently RBI has cancelled the Certificateof Registration (CoR) of the Company as NBFC.
For C K S P AND CO LLP
Membership No: 135047
Date : 30th May 2019
ANNEXURE - B TO INDEPENDENT AUDITORS' REPORTT
(Referred to in paragraph 10(f) under Report on Other Legal and RegulatoryRequirements' section of our report to the members of Regal Entertainment and ConsultantsLimitedof even date.)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act')
We have audited the internal financial controls over financial reporting of RegalEntertainment and Consultants Limited (the Company') as of 31stMarch 2019inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility For Internal Financial Controls
The Company's management and Board of Directorsare responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the Guidance Note') issued by the Institute of CharteredAccountants of India (the ICAI'). These responsibilities include the designimplementation and maintenance of internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies 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 issued by ICAI and the Standards on Auditing prescribedundersection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the existenceof the 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-
i. pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
ii. 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
iii. 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.
In our opinionto the best of our information and according to the explanations givento us the Company has in all material respects an existence ofinternal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31stMarch 2019 based on the internalcontrol over financial reporting criteria established by the Company considering theessential componentsof internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the ICAI
For C K S P AND CO LLP
Membership No: 135047
Date : 30th May 2019