TO THE MEMBERS OF
SAI BABA INVESTMENT & COMMERCIAL ENTERPRISES LIMITED.
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of SAI BABAINVESTMENT & COMMERCIAL ENTERPRISES LIMITED (the company') whichcomprise the Balance Sheet as at March 31 2018 the Statement of Profit and Lossincluding the statement of other comprehensive income the Cash flow statement and theStatement of change in Equity for the year ended and a summary of significant accountingpolicies and other explanatory information.
Management's Responsibility for the 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) Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 andthe Companies (Indian Accounting Standards) Rules 2015 as amendedby the Companies(Indian Accounting Standards) Rules 2017 under Section 133 of the Companies Act 2013.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial 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 Ind AS financial statements basedon our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
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 theInd ASfinancial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances but not for the purposeof expressing an opinion on whether the Company has in place an adequate internalfinancial controls system over financial reporting and the operating effectiveness of suchcontrols. An audit also includes evaluating the appropriateness of the accounting policiesused and the reasonableness of the accounting estimates made by the Company's Directorsas well as evaluating the overall presentation of
Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2018 and its losses including other comprehensive income its cash flowsand the changes in equity for the year ended on that date subject to followingQualifications
(a)The company is required to get registered with the RBI as Non-Banking financialcompany as required under section 45 IA of the Reserve Bank of India Act 1934 and therules made there under which has not been complied with.
(b) The company has not complied with the requirement of Internal Audit as mandated bysection 138 of the Companies Act 2013.
(c) The company has invested a sum of Rs 2379827 in Diamond Jewellery which has beentaken as per the Management certification in the absence of Physical verfification.
(d) The only source of Income to the company is Interest on Loans given to variousparties which is unverifiable in the absence of supporting evidence.
(e) The Company has yet to deposit its Income tax of Rs.1745850 for the Ay 2017-18and file its return of Income for the A.Y 2017-18 and also defaulted in payment of tds ofRs 194550.
(f)The company has written off Rs. 18864390 due from Amrapali Aadya Trading andInvestment Pvt.Ltd. However no legal action was initiated.
Emphasis of the Matter
(a) The comparative financial information of the Company for the year ended 31st March2017 and the transition date opening Balances Sheet as at 1st April 2016 included inthese Ind AS financial statements are based on the previously issued statutory financialsstatements prepared in accordance with the Accounting Standards notified under section 133of the Companies Act 2013 read together with paragraph 7 of the Companies (Accounts)Rules 2014 which were audited by us and we had expressed the unmodified opinion videaudit reports dated 27.05.2017 for the year ended 31st March 2017 . These financialstatements have been considered in the Ind AS financial statements after adjustment of thedifferences in the accounting policies adopted by the Company on transition to the Ind ASas detailed in Note 18.9of the Ind AS financial statements.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement onthe matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act we report that:
a) we have sought and obtained all the information and explanations subject to ourqualifications in the report which to the best of our knowledge and belief were necessaryfor the purpose of our audit;
b) in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
c) the Balance Sheet and the Statement of Profit and Loss including the statement ofother comprehensive income the Cash Flow statement and the statement of changes in equitydealt with by this Report are in agreement with the books of account;
d) in our opinion the aforesaid Ind AS financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 Companies (Indian Accounting Standards) Rules 2015 as amended;
e) On the basis of written representations received from the directors as on March 312018 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2018 from being appointed as a director in terms of Section 164 (2) of theAct.
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"; and g) With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best ofour information and according to the explanations given to us: f) The Company does nothave any pending litigations which would impact its financial position;
g) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
h) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
| ||For S. Agarwal & Co. |
| ||Chartered Accountants |
| ||FRN: 000808N |
| ||B.S. Chaudhary |
|Place: New Delhi ||(Partner) |
|Date: 31.08.2018 ||M. No. : 406200 |
"Annexure A" to the Independent Auditors' Report
Referred to in paragraph 1 under the heading Report on Other Legal &Regulatory Requirement' of our report of even date to the financial statements of theCompany for the Period ended March 31 2018:
(i) The company does not own any fixed asset.
(ii) According to the information and explanations given to us the Company does nothave any inventory and hence reporting under clause 3(ii) of the Order is not applicable.
(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.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.
(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year and no order in this respect has been passed by theCompany Law Board or National Company Law Tribunal or the Reserve Bank of India or anyCourt or any other Tribunals.
(vi) To the best our knowledge and according to the information and explanations givento us the Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act in respect of the services rendered by the Company.
(vii) According to the information and explanations given to us in respect ofstatutory dues:
(a) The Company has been regular in depositing undisputed statutory dues includingIncome-tax Service Tax Goods and Service Tax Provident Fund Employees' State
Insurance cess and other material statutory dues applicable to it to the appropriateauthorities except Income Tax as given in our Qualification report.
(b) There are undisputed amounts payable in respect of Income-tax Service Tax Goodsand Service Tax Provident Fund Employees' State Insurance cess and other materialstatutory dues in arrears as at 31st March 2018 for a period of more than sixmonths from the date they became payable except Income Tax as per our qualificationreport.
(c) There are no dues of Income-tax and Service Tax/GST as on 31st March 2018 onaccount of disputes.
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks and dues todebenture holders. The Company has not taken any loan from government and financialinstitution.
(ix) In our opinion and according to the information and explanations given to us themoney raised by way of the term loans and debentures if any have been applied by theCompany during the year for the purposes for which they were raised other than temporarydeployment pending application of proceeds. The Company has not raised moneys by way ofinitial public offer/ further public offer (including debt instruments).
(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud by its officers or employees onthe Company has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.
(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 188 and 177 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause 3(xiv) of the Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of the Act arenot applicable.
(xvi) In our opinion the company is required to be registered under section 45 IA ofthe Reserve Bank of India Act
| ||FOR SAGARWAL & CO |
| ||Chartered Accountants |
| ||B.S. Chaudhary |
|Place: New Delhi ||M. No.406200 |
|Dated: 31.08.2018 ||Firm No.000808N |
"Annexure B" to the Independent Auditors' Report
(Referred to in paragraph 2(f) of the independent auditor's report of even date on thefinancial statements of the company for the year ended March 31 2018.)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the
Companies Act 2013 ("the Act").
We have audited the internal financial controls over financial reporting of SAIBABA INVESTMENT & COMMERCIAL ENTERPRISES LIMITED("the Company") asof March 31 2018 in conjunction with our audit of the financial statements of the Companyfor the Period 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 over financial reporting criteriaestablished by the
Company considering the essential components of internal control stated in the"Guidance Note on Audit of Internal Financial Controls Over Financial Reporting"(the "Guidance Note") issued by the Institute of Chartered Accountants of 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 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 to the extent applicable to anaudit of internal financial controls both issued by the Institute of CharteredAccountants of India and deemed to be prescribed under section 143(10) of the Act to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 auditors' judgement 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 no adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting whichwere operating during the year ended March 31 2018 based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
| ||FOR SAGARWAL & CO |
| ||Chartered Accountants |
| ||B.S. Chaudhary |
|Place: New Delhi ||M. No.406200 |
|Dated: 31.08.2018 ||Firm No.000808N |