To the Members of Touchwood Entertainment Limited Report on the Financial Statements
We have audited the accompanying financial statements of M/s Touchwood EntertainmentLimited ('the Company'] which comprise the Balance Sheet as at 31 March 2017 theStatement of Profit and Loss the Statement of Cash Flow and a summary of the SignificantAccounting Policies 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 financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income and cash flow of the company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards specified under Section 133 of the Act read with relevantrules issued thereunder.
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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
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 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 evaluating 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 financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the financial position of the Company as at 31March 2017 its profit and its cash flows for the year ended on that date.
Emphasis of matter We draw your attention to:
1. Note no. (e) for considering the advance given to Jaypee Infratech Ltd. for purchaseof Pent House at JAYPEE GREENS NOIDA as good despite the Company undergoing insolvencyproceedings since July 2017.
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 the Annexure A a statement on the matters specified in the paragraph 3 and 4 of theorder.
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 statement of cash flowdealt with by this Report are in agreement with the books of account;
(d) in our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act except AS-15 read with relevant ruleissued thereunder;
(e) on the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 from being appointed as a director in terms of Section164 (2) of the Act;
(fjwith 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 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 does not have any pending litigation which would impact on its financialposition.
ii. the Company does not have any long-term contracts including derivative contractsfor which there may be any material losses;
iii. No amount was required to be transferred to the Investor Education and ProtectionFund by the Company; and
iv. the Company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8 November2016 to 30 December 2016 and these are in accordance with the books of accounts maintainedby the Company. Refer Note (g) to the financial statements.
Annexure -"A" to the Auditors' Report
The Annexure referred to in Independent Auditors' Report to the members of TouchwoodEntertainment
Limited on the financial statements for the year ended 31 March 2017 we report that:
(i) (a) whether the company is maintaining proper records showing full particularsincluding quantitative details and situation of fixed assets;
The Company is maintaining proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) whether these fixed assets have been physically verified by the management atreasonable intervals; whether any material discrepancies were noticed on such verificationand if so whether the same have been properly dealt with in the books of account;
The management has physically verified the fixed assets at the close of the year and nomaterial discrepancy was noticed on such verification. The management disposed off somefixed assets and written off allotment of land made to it as the Company did not meet theconditions of allotment. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its business.
[c] whether the title deeds of immovable properties are held in the name of thecompany. If not provide the details thereof;
The company does not own any immovable property. According to the information andexplanations given to us and on the basis of our examination of the records of theCompany the Company has made a part payment of Rs.11348880/- to M/s Jaypee InfratechLimited for purchase of Pent House at JAYPEE GREENS NOIDA (UNIT NO. KRH21-3202) for whichno title deed held with the company. The same will take place after completion of theproject. (Refer Note No. (e) of Notes to The Accounts)
(if) whether physical verification of inventory has been conducted at reasonableintervals by the management and whether any material discrepancies were noticed and if sowhether they have been properly dealt with in the books of account;
The Company is engaged in service activity mainly rendering event management services.The company used to purchase and procure need based goods & services directlydelivered at site by the suppliers as and when required for organizing and conducting theevents hence it does not hold any inventories.
(iii) whether the company has granted any loans secured or unsecured to companiesfirms Limited Liability
Partnerships or other parties covered in the register maintained under section 189 ofthe Companies Act 2013. If so
The company has given security deposit for rent to the parties covered in the registermaintained under section 189 of the Companies Act 2013. However the company has notgranted any loans secured of unsecured to companies firms Limited Liability Partnershipor other parties covered under the register maintained under section 189 of the CompaniesAct 2013. Hence clauses (a) to (c) are Not Applicable.
(iv) in respect of loans investments guarantees and security whether provisions ofsection 185 and 186 of the Companies Act 2013 have been complied with. If not providethe details thereof.
The company has not given any loan or guarantee. In our opinion and according to theinformation and explanations given to us the Company has complied with the provisions ofsection 186 of the Act with respect to the investments made by it in quoted equityshares.
(v) in case the company has accepted deposits whether the directives issued by theReserve Bank of India and the provisions of sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the rules framed thereunder where applicablehave been complied with? If not the nature of such contraventions be stated; If an orderhas been passed by Company Law Board or National Company Law Tribunal or Reserve Bank ofIndia or any court or any other tribunal whether fee.same has been complied with or not?
The Company has not accepted any deposits from the public.
(vi] whether maintenance of cost records has been specified by the Central Governmentunder sub-section (1) of section 148 of the Companies Act 2013 and whether such accountsand records have been so made and maintained.
The Central Government has not prescribed the maintenance of cost records under section148(1] of the Act for services rendered by the Company.
(vii] (a) whether the company is regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income-tax sales-tax service taxduty of customs duty of excise value added tax cess and any other statutory dues to theappropriate authorities and if not the extent of the arrears of outstanding statutorydues as on the last day of the financial year concerned for a period of more than sixmonths from the date they became payable shall be indicated;
On the basis of our examination of books of account and information and explanationfurnished by the management provisions of sales-tax duty of customs duty of excisevalue added tax and cess are not applicable to the company. The company is not regular indepositing the undisputed statutory dues in respect of provident fund employee's stateinsurance income tax deducted at source and service tax. No outstanding statutory dues ason the last day of the financial year was outstanding for a period of more than six monthsfrom the date it became payable.
(b] where dues of income tax or sales tax or service tax or duty of customs or duty ofexcise or value added tax have not been deposited on account of any dispute then theamounts involved and the forum where dispute is pending shall be mentioned. (A mererepresentation to the concerned Department shall not be treated as a dispute].
Income Tax Authorities (CPC] has adjusted an amount of Rs.2462185/- against taxliability of the Assessment Year 2008-09 out of refund due to the company in previousyears. As per the Assessment order of the Assessment Year 2016-17 an amount ofRs.616082/-on account of income tax & Rs.727560/ on account of interest thereon isalso outstanding against that demand. The assessment at Nil demand has already been madeby Dy. Commissioner of Income Tax in assessee's favour and the company is hopeful that theadjusted amount will be refunded by the income at department. The same has been classifiedunder "Long Term Loans & Advances."
(viii] whether the company has defaulted in repayment of loans or borrowing to afinancial institution bank Government or d ues to debenture holders? If yes the periodand the amount of default to be reported (in case of defaults to banks financialinstitutions and Government lender wise details to be provided]
The company has not taken any loans from financial institutions and Government and hasnot issued any debentures. The company has taken Overdraft limit for working capital frombank which is regular. The company is regular in repayment of term loans taken from bankfor purchase of vehicles which are payable in EMI and there is no default.
(ix] whether moneys raised by way of initial public offer or further public offer(including debt instruments] and term loans were applied for the purposes for which thoseare raised. If not the details together with delays or default and subsequentrectification if any as may be applicable be reported;
The company has not raised any amount by way of initial public offer or further publicoffer (including debt instruments]. The Company has taken term loan for purchase of carswhich were directly reimbursed by the bank to the vendor.
(x] whether any fraud by the company or any fraud on the Company by its officers oremployees has been noticed or reported during the year; If yes the nature and the amountinvolved is to be indicated;
According to the information and explanations given to us no fraud by the Company oron the Company by its officers or employees has been noticed or reported during the courseof our audit.
(xi] whether managerial remuneration has been paid or provided in accordance with therequisite approvals _ mandated by the provisions of section 197 read with Schedule V tothe Companies Act? If not state the amount section 197 read with Schedule V to the Act.specified in the Nidhi Rules 2014 to meet out the liability;
In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xiQ of the Order is notapplicable.
Vxiinl whether all transactions with the related parties are in compliance withsections 177 and 188 of Companies" J Act 2013 where applicable and the details havebeen disclosed in the Financial Statements etc. as required by the applicable accountingstandards;
According to the information and explanations given to us and based on our examinationof the records of the Company transactions with the related parties are in compliancewith sections 177 and 188 of the Act where applicable and details of such transactionshave been disclosed in the financial statements as required by the applicable accountingstandards. The company has paid a sum of Rs.30 Lacs as Managerial Remuneration andRs.18.60 Lacs as Rent & salary to relative of directors.
(xiv) whether the company has made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review and if soas to whether the requirement of section 42 of the Companies Act 2013 have been compliedwith and the amount raised have been used for the purposes for which the funds wereraised. If not provide the details in respect of the amount involved and nature of non-compliance;
According to the information and explanations give to us and based on our examinationof the records of the Company the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.
(xv) whether the company has entered into any non-cash transactions with directors orpersons connected with -i-him and if so whether the provisions of section 192 ofCompanies Act 2013 have been complied with; Comntwe information and exP'anations givento us and based on our examination of the records of the
The Company is not required to ho registered under section 45-IA of the Reserve Bank nfInriio Act 1934.
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 TouchwoodEntertainment Limited ("the Company") as of 31 March 2017 in conjunction withour audit of the financial 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 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 (TCAT). 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 onlyfin accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 31 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 SAMSAND Associates
CA Neeraj Bhatia
FRN :00370897 M. .- 093269
Place: New Delhi
Dated: August 2017