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McDowell Holdings Ltd Auditor Reports

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McDowell Holdings Ltd Share Price Auditors Report

To the Members McDowell Holdings Limited

(A Company under Corporate Insolvency Resolution Process (CIRP), Bengaluru)

REPORT ON THE AUDIT OF INDIAN ACCOUNTING STANDARDS (IND AS) FINANCIAL STATEMENTS

Initiation of Corporate Insolvency Process

The Honble National Company Law Tribunal ("NCLT"), Bengaluru Bench, admitted petition for initiation of Corporate Insolvency Process ("CIRP") under the provisions of the Insolvency and Bankruptcy Code, 2016 ("the Code") and related rules and regulations issued there under, filed by financial creditors vide order no. CP (IB)No.ll/BB/2022 delivered on 08th April 2022 and appointed an Interim Resolution Professional ("IRP") to manage affairs of the Company in accordance with the provisions of Code. The Committee of Creditors of the Company appointed with the requisite voting share, in its meeting the IRP as Resolution Professional ("RP") for the Company. Upon initiation of the CIRP proceedings, the management of affairs of the Company and power of Board of Directors are now vested with RP. Further, as mentioned in Note 33 and in terms of Sections 14 of the Code, until the resolution plan has been approved by the Honble NCLT, moratorium shall continue to be in effect.

Qualified Opinion

We have audited the accompanying financial statements of Mcdowell Holding Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended 31.03.2024, and notes to the financial statements, including a summar^—^ of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, and its total comprehensive Income (comprising of Loss and other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

1. We draw attention to Note 33 and 34 of the financial statements, which describes that the Company is under the Corporate Insolvency Resolution Process (CIRP) as per the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC), pursuant to the order of the National Company Law Tribunal (NCLT) dated 08,04.2022.

The financial statements have been prepared on a going concern basis, notwithstanding that the Companys ability to continue as a going concern is dependent upon the outcome of the CIRP, which is inherently uncertain,

As a result of the ongoing CIRP, several factors raise significant doubt on the Companys ability to continue as a going concern, such as:

. The net worth of the Company is fully eroded as the investment in United Beweries Limited amounting to ^90381.51 Lakhs has been transferred to SBI Mutual Fund Group on 31.07,2023 on the direction of ED and therefore without the investments in the company , its liabilities exceeded its total assets which leaded to the erosion of the Companys net worth.

. The Company has incurred substantial losses amounting to 3; 190.64 Lakhs during the year.

* The Company is unable to meet its obligations as they fall due.

• The operations of the Company have significantly deteriorated.

These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Companys ability to continue as a going concern.

In the absence of a resolution plan being approved by the NCLT and given the limited information available, we are unable to determine the adjustments, if any, that may be required to the carrying values of assets and liabilities, and their impact on the financial statements.

2. We draw attention to the financial statements, which states that the following balances that have not been confirmed by the respective parties as of the reporting date which are as follows:

s. IMo. Particulars Amount

(Tin

Lakhs)

Remark
01. Deposit (Cash collateral) 15.13 Note No. 6 under the subhead others
02. Others Receivables A. ECL Finance Limited 87.68 Note No. 6 under the subhead others
B. Ambitious Computech India Pvt. Ltd 4.14 Note No. 4 under the subhead other advances

In the absence of alternative procedures, we could not verify the accuracy and completeness of these balances. Consequently, we are unable to ascertain the possible impact on the financial statements if any adjustments were required.

3. We draw attention to Note 38 of the financial results, which states that the company has not conducted a limited review for the quarter ended 30th June 2023, 30th September 2023, 31st December 2023 and 31st March 2024 as required under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

We conducted our audit of the financial statements in accordance with Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are Independent of the Company in accordance with the Code of Ethics issued by the institute of Chartered Accountants of India (ICA!) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the financial statements.

Emphasis of Matter Paragraph

We draw attention to the following matters in the Notes to the financial statements:

A, The Investee company was having 45,51,000 number of shares in United Breweries Limited valued at ^ 90381.51 Lakhs. These shares were transferred to State Bank of India Mutual Fund Group on the instructions of Enforcement Directorate (ED) in F.Y 2023-24. (Refer note no. 24 of notes to financial statements.)

B. 1,22,667 shares in United Breweries Limited (UBL) belonging to the company which are lying with erstwhile lenders, who claim that they have been directed by the Enforcement Directorate not to part with those shares (Refer note no. 25 of notes to financial statements).

C. The Companys investment of 16,71,344 shares in United Breweries Limited (UBL) has been unilaterally transferred from the account of the company to the Demat account of the Deputy Director, Enforcement Directorate, Mumbai on 3rd May, 2018. (Refer note no. 26 of notes to financial statements).

D. The Company has received a Show Cause Notice dated 3rd July 2018 under the Fugitive Economic Offenders Act 2018 (FEOA). The Company has filed its objections in the designated court for FEOA. (Refer Note No. 28 of notes to financial statements).

E. In a separate proceeding before the Court of Special Judge for Prevention of Money Laundering Act (PMLA), an individual promoter of the company has been declared as a proclaimed offender and the companys investments in UBL and UBHL have been attached. The Company in related proceedings, before the PMLA Court has placed its objections on record. (Refer Note No. 29 of notes to financial statements).

F. The Companys Demat Account maintained with Stock Holding Corporation of India has been suspended for debit on the instructions of Enforcement Directorate since 29th July 2019. The Company has filed submissions with Enforcement Directorate seeking removal of this attachment. (Refer Note No. 30 of notes to financial statements).

G. We draw attention to Note No. 43 of the financial statements which describe that the management of the Company has not provided us with the details of the Demat holdings as of 31.03.2024, of Stock Holdings Corporation of India and Yes Bank. As a result, we were unable to verify the existence and completeness of the shares held by the company in its Demat accounts. This limitation in scope affects our ability to determine the accuracy of the investments disclosed under Non-Current Investments in the balance sheet. However the Dividend has been received by the company during the financial year which indicates the ownership of such shares with the company,

H, The Companys investments include 57,219 shares in Mangalore Chemicals and Fertilizers Limited (hereinafter referred to as MCF) which were frozen by the Stock Holding Corporation of India Ltd under an instruction from the Stock Exchanges, where the shares of the Company are listed. (Refer Note no. 31 of notes to financial statements).

I, The company has revalued the investment via Other Comprehensive Income but in case of Investment in UB Electronics Instruments Limited Company has not revalued the Investment and no actuarial valuation report has been provided to us.

J, We draw attention to Note 41 of the financial statements, which states that the company has reclassified the investment in fixed deposit from cash and cash equivalents to non current investment. However, the company has not restated the financial statement of the previous year in accordance with the Indian Accounting Standard,

Material Uncertainty Related to Going Concern

We draw attention to Note 24 and 34 and of the financial statements, regarding preparation of financial statements on going concern basis, which states that the Companys Investments had frozen by the ED and the investments in United Beweries Limited has been transferred to SBI Mutual Fund Group on 31.07.2023 on the direction of ED and therefore without Investments, its liabilities exceeded total assets and its net worth has been fully eroded as on 31st March 2024. The Corporate Insolvency Resolution Process (CIRP) against the Company is in process. Since the CIRP is currently in progress, as per the Code, it is required that the Company be managed as a going concern during the CIRP. The standalone financial statements are continued to be prepared on going concern basis, However, there exists material uncertainty about the Companys ability to continue as going concern since the same is dependent upon the resolution plan to be approved by NCLT,

The appropriateness of preparation of standalone financial statements on going concern basis is critically dependent upon CIRP as specified in thgCpde...,^ Our opinion is modified in respect of this matter.

Other Information

The Companys Resolution Professional is responsible for the other information, The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditors report thereon. The annual report is expected to be made available to us after the date of this auditors report thereon.

Our opinion on the financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated when we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charge with governance and take appropriate action as applicable under the relevant laws and regulations.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion section. We have determined there are no Key Audit matters to communicate.

Responsibilities of management and those charged with governance for the financial statements

1, The Companys Resolution professional is responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance, change in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

2. In preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditors responsibilities for the audit of the financial statements

1. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

2. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

? Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

? Obtain an understanding of internal control relevant to the audit in order to design 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 has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

o Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

? Conclude on the appropriateness of managements use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation,

3. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

4. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors Report) Order, 2020 (the Order), issued by the Central Government of India in terms of Section 143(11) of the Companies Act,2013, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

As required by Section 143 (3) of the Companies Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit except for the matters specified in "Basis of Qualified Opinion Paragraph" and "Emphasis of Matter Paragraph "so far as it appears from our examination of those books.

(b) In our opinion, proper books of account as required by law have been kept by the Company except for the matters specified in "Basis of Qualified Opinion Paragraph" so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Cash Flow Statement dealt 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 Indian Accounting Standards specified under Section 133 of the Act except for the matters specified in "Basis of Qualified Opinion Paragraph" and "Emphasis of Matter Paragraph."

(e) Since the Company is in Cirp (Corporate Insolvency Resolution Plan"), there is no director therefore this point is not applicable.

(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure B.

(g) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i. The Company does not have any pending litigations which will have an effect on the financial statements other than the matters described in Note 35 of the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts as at March 31, 2024.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2024.

iv. Based on our examination, which included test checks, the Company has used accounting softwares for maintaining Its books of account for the financial year ended March 31, 2024 which has a feature of recording audit trail (edit log) facility and the same has operated from 15.06.2023 for all relevant transactions recorded in the softwares. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with.

Place: Bengaluru (Camp Office) For S,K Bajpai &Co,

Date: 09.09.2024 Chartered Accountants

Firm Registration No 004330C

CA. Sarvesh KumartajpaV^V.. Partner "

Membership No. 073277 UDIN:24073277BKESCZ1517

Annexure to the Independent Auditors Report (Contd.)

Annexure A to Independent Auditors Report

Referred to in paragraph 14 of the Independent Auditors Report of even date to the members of McDowell Holding Limited on the financial statements as of and for the year ended March 31, 2024.

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit and based on the consideration of the reports of the branch auditors and, to the best of our knowledge and belief, we report that:

i. In respect of the Companys Property, Plant and Equipment and Intangible Assets:

(a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment and relevant details of right-of-use assets and investment property.

(B)The Company does not have any intangible asset.

(b) As per our information and according to the explanations given to us and based on the audit procedures applied, the management has conducted physical verification of Property, Plant and Equipment of the company during the year.

(c) The company did not have any immovable property and therefore the provisions of clause 3(i)(c} of the Companies (Auditors Report) order,2020 is not applicable to the company.

(d) The Company has not revalued any of its Property, Plant and Equipment (including right of-use assets) and it does not have any intangible assets during the year.

(e) No proceedings have been initiated during the year or are pending against the Company as at March 31, 2024 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

ii. The company does not have any Inventory and hence reporting under clause 3(ii)(a) of the Companies (Auditors Report) order,2020 is not applicable.

ill. During the year under consideration the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act.

Accordingly, the provisions of paragraph 3 clause (iii) (a) to (f) of the Order are not applicable to the Company.

iv. During the year under consideration the Company has not given loans, guarantees or securities or made investments to which the provisions of section 185 and 186 of the Companies Act, 2013 apply, Hence, paragraph 3 clause (iv) of the Order is not applicable to the Company.

v. The Company has not accepted any deposits during the year to which the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under and the directives issued by the Reserve Bank of India are applicable. Hence paragraph 3 clause (v) of the Order is not applicable to the Company.

vi. In our opinion and according to the information and explanations given to us the provisions of sub section (1) of Section 148 of the Companies Act, 2013 with regard to maintenance of cost records are not applicable to the Company, Accordingly, paragraph 3 clause (vi) of the Order is not applicable to the Company.

vii (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company is regular in depositing undisputed statutory dues including Goods and Service Tax, Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities. According to information and explanations given to us, no undisputed amount payable in respect of aforesaid dues were outstanding as at March 31, 2024 for a period of more than six months from the date of becoming payable.

(b) According to information and explanations given to us and on the basis of our examination of the books of account, and records, there are no dues of Goods and Service Tax, Provident Fund, Employees State insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities on account of dispute.

viii. According to the records of the Company examined by us and the information and explanations given to us, there are no transactions were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 oL 1961) which have not been previously recorded in the books of accounts.

ix. (a) According to the information and explanations given to us, during the year under consideration the Company has not defaulted in repayment of its loans or borrowings or in the payment of interest thereon to banks or financial institutions.

(b) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has defaulted in the repayment of interest and principal amount of the private lenders as the Company is under Corporate insolvency resolution process (Refer Note No. 9 of the Financial statements).

(c) The Company has not taken any term Loan during the year hence the reporting in clause 3(ix)(c) is not applicable to the company.

(d) On the Overall examination of the Financial statements of the Company, the Company has not raised any funds on short term basis.

(e) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associate or joint ventures,

(f) According to the information and explanations given to us, the Company has not raised any loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

X (a). Based upon the audit procedures performed and the information and explanations given by the management, the Company has not raised moneys by way of initial public offer or further public offer including debt instruments and term loans. Accordingly, the provision of paragraph 3 clause (x)(a) of the order is not applicable.

(b) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially, or optionally convertible) during the year. Therefore, the compliance of section 42 to 62 of the Companies Act, 2013 is not applicable, Accordingly, the provision of paragraph 3 clause (x)(b) of the order is not applicable.

xi. Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the Comjpiy==5^ by its officers or employees has been noticed or reported during the year,

xii. In our opinion, the Company is not a Nidhi Company, Therefore, paragraph 3 clause(xii) of the Order is not applicable to the Company.

xiii. There are no related party transactions during the year. Accordingly, the provision of paragraph 3 clause (xiii) of the order is not applicable,

xiv (a) The Company has internal audit system commensurate with the size and nature of its business;

(b) The report of the Internal Auditors has been considered while conducting the audit,

xv. According to the information and explanation given to us, the Company has not entered into any non-cash transactions with its directors or persons connected with its directors and accordingly, reporting under clause 3(xv) of the Order with respect to compliance with the provisions of section 192 of the Act are not applicable to the Company.

xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, reporting under clauses 3(xvi)(a), (b),(c) and (d) of the Order is not applicable to the Company.

xvii. The company has incurred cash loss amounting to T 184.94 Lakhs during the financial year 2023-24 and there were no cash losses during the preceding financial year.

xviii. There has been no resignation of the statutory auditors during the year. Accordingly, reporting under clause B(xviii) ofthe Order is not applicable to the Company.

xix On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, the auditors knowledge of the Resolution Professional plans, that we are on the opinion that material uncertainty exists as on the date of the audit report and also the company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. Also, refer "Material Uncertainty Related to Going Concern" paragraph in Independent auditors report.

xx. There are no ongoing projects, therefore the company has not transferred the unspent amount to a Fund specified in Schedule VII to the Companies Act within a period of six months of the expiry of the financial year in compliance with second proviso to sub-section (5) of section 135 of the said Act.

xxi, The Company is not required to make Consolidated Financial Statements. Accordingly, paragraph 3 clause (xxi) of the Order is not applicable to the Company.

Place: Bengaluru(Camp Office) For S.K Bajpai &Co.

Date: 09.09.2024 Chartered Accountants

FRN:004330C /

CA. Sarvesh Kumartfajpa^ Partner

Membership No. 073277 UDIN: 24073277BKESCZ1517

"ANIMEXURE B" TO AUDITORS REPORT McDowell Holdings Limited

Referred to in paragraph 15(f) of the Independent Auditors Report of even date to the members of McDowell Holdings Limited ("the Company") on the financial statements for the year ended 31st March 2024. We report that:

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of McDowell HoldingsLimited ("the Company") as of 31st March, 2024 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013,

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with 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 an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India, Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that

(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the

Au /f

company are being made only in accordance with authorizations of management and directors of the company;

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Material misstatements due to error or fraud may occur and not be detected due to the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Basis for Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified in the Companys internal financial controls over financial reporting as at 31st March, 2024.

1. The company did not have appropriate internal control for assessment of recoverability of other receivables.

A material weakness is a deficiency, or combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the companys annual or interim financial statements will not be prevented or detected on a timely basis.

Qualified Opinion

In our opinion, for matters described in "Basis of Qualified Opinion Paragraph", the company cannot to be said to have an adequate internal financial controls system over financial reporting and such internal financial controls over // financial reporting were not operating effectively as at 31st March 2024, based /y

on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Place: Bengaluru (Camp Office) For S.K Bajpai & Co.

Date: 09.09.2024 Chartered Accountants

Firm Registration No. 04330C

CA. Sarvesh Kumar Bajpa. ^ Partner

Membership No. 073277 UDIN:24073277BKESCZ1517

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