To,
The Members of
Subway Finance and Investment Company limited.
Report on the Financial Statements Opinion
We have audited the standalone financial statements of Subway Finance and Investment
Company Limited which comprise the balance sheet as at 31st March 2022, and the statement
of Profit and Loss, and statement of cash flows for the year then ended, and notes to the
financial statements, including a summary 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, the aforesaid standalone financial statements give the information required
by the Companies Act, 2013 ("the Act") in the manner so required and give a true
and fair view in conformity with accounting principles generally accepted in India, of the
state of affairs of the Company as at 31st March 2022, the profit and total comprehensive
income, its cash flows and changes in equity for the year ended on that date.
Basis for Opinion
a. As per information provided to us & as per notes to financial statements the
NBFC License/ Registration has been revoked by RBI due to non- fulfillment of NOF
requirement stipulated for running an NBFC. These conditions indicate a material
uncertainty that may cast significant doubt about the companys ability to continue as
going concern. However, the financial statements have been prepared on a going concern
basis.
b. Interest Income - Income has been recognized on the basis of conformation received
from the parties while actual has not been made during this period. Matter has been
qualified in our report & our opinion is only based on confirmation & information
provided by the management in this regard.
Furthermore, there are no specific documentation available for changes in rate of
interest on the said loan by the NBFC during the said period.
c. Advances and Provisioning - The Company is unable to substitute the recoveries of
advances given to parties while pursuing NBFC business. There is no ledger confirmation
available on record & interest has not been received by company since long. The
company has not classified the said account as NPA and has not made requisite provisions
in the books of account. Furthermore, since the NBFC license of the company is revoked all
the contractual obligations regarding the Loans & Advances are also high risk.
d. As per explanation provided to us, there was no significant bank transaction
throughout the year in one of the current account of the company since it was blocked by
income tax department due to recoveries of statutory dues from a director of the company
in his personal income tax matter
Qualified Opinion
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid 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 31st
March 2022, and its Profit/Loss for the year ended on that date.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the standalone financial statements of the current period.
These matters were addressed in the context of our audit of the standalone financial
statements as a whole, and in forming our opinion thereon, and we have provide a separate
qualified opinion on these matters.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these financial statements that give a true and fair view of the financial position and
financial performance of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards specified under Section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This
responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding 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 2020that
give a true and fair view and are free from material misstatement, whether due to fraud or
error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our
audit. We have taken into account the provisions of the Act, the accounting and auditing
standards and matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under. We conducted our audit in accordance
with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the financial statements. 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. In making those risk assessments, the
internal financial controls relevant to the Companys preparation of the financial
statements that give a true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial controls system over
financial reporting and the operating effectiveness of such controls. An audit also
includes evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Companys Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the financial statements.
Report on Other Legal and Regulatory Requirement:
1. As required by the Companies (Auditors Report) Order, 2020 ("the Order"),
as amended, issued by the Central Government of India in terms of sub-section (11) of
section 143 of the Act, we give in the "Annexure A" a statement on 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 which to the best
of our knowledge and belief were necessary for the purpose of our audit;
b. in our opinion proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books;
c. the Balance Sheet and the Statement of Profit and Loss dealt with by this Report are
in agreement with the books of account;
d. in our opinion, the aforesaid financial statements comply with the Accounting
Standards specified under section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014.
e. On the basis of written representations received from the directors as on 31st March
2022 taken on record by the Board of Directors, none of the directors is disqualified as
on 31st March 2022 from being appointed as a director in terms of Section 164
(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financial
reporting 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 information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financial
position.
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company. "ANNEXURE A" TO THE INDEPENDENT
AUDITOR S REPORT
Independent Auditors Report on Companies (Auditors Report) Order, 2020 (the
"Order") issued by the Central Government in terms of Section 143(11) of the Act
To the best of our information and according to the explanations provided to us by the
Company and the books of account and records examined by us in the normal course of audit,
we state that:
i. In respect of the Companys Property, Plant and Equipment and Intangible Assets:
a) (A) The Company does not have any Property, Plant and Equipment in the books;
(B) The Company does not have any intangible assets in the books.
b) As the company does not have any Property, Plant Equipment in the books, the
physical verification at regular intervals is not required to be conducted by the
management and hence, the reporting under clause 3(i)(a)(B) of the Order is not required.
c) The Company does not have any immovable property in its name
d) The Company has not revalued any of its Property, Plant and Equipment during the
year.
e) No proceedings have been initiated during the year or are pending against the
Company as at 31st March 2022 for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.
ii. In respect of the Companys inventories:
a) The Company being in the service industry does not have any inventory and hence,
reporting under clause 3(ii)(a) of the Order is not applicable.
b) The Company has not been sanctioned working capital limits in excess of INR 5
crores, in aggregate, at any points of time during the year, from banks or financial
institutions on the basis of security of current assets and hence reporting under clause
3(ii)(b) of the Order is not applicable.
iii. The companys principal business is to give loans and hence reporting under clause
3(iii)(a),(b),(c),(d),(e) and (f) of the Order is not applicable
iv. In our opinion and according to the information and explanation given to us, the
Company has not complied with the provisions of Sections 185 and 186 of the Companies Act,
2013 in respect of loans granted, investments made and guarantees and securities provided,
as applicable.
v. Due to revocation of license of NBFC by RBI, during the year under consideration the
Company has not accepted any deposit or amounts which are deemed to be deposits as
envisaged by provisions of Section 73 to 76 or any other relevant provisions of the Act
and Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted
from the public are applicable. Hence, reporting under clause 3(v) of the Order is not
applicable.
vi. As informed to us, the maintenance of cost records has not been specified by the
Central Government under subsection (1) of section 148 of the Companies Act, 2013 for the
business activities carried out by the Company. Hence, reporting under clause 3(vi) of the
Order is not applicable to the Company.
vii. In respect of statutory dues:
a) In our opinion, the Company has generally been regular in depositing undisputed
statutory dues, including Goods and Services tax, Provident Fund, Employees State
Insurance, Income Tax, Sales Tax, Service Tax, duty of Custom, duty of Excise, Value Added
Tax, Cess and other material statutory dues applicable to it with the appropriate
authorities.
b) There were no undisputed amounts payable in respect of Goods and Service tax,
Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, duty of
Custom, duty of Excise, Value Added Tax, Cess and other material statutory dues in arrears
as at 31st March 2022 for a period of more than six months from the date they
became payable.
viii. There were no transactions relating to previously unrecorded income that have
been surrendered or disclosed as income during the year in the tax assessments under the
Income Tax Act, 1961 (43 of 1961).
ix. In respect of the matters required to be reported in clause (ix):
a) The Company has not defaulted in repayment of loans or other borrowings or in
payment of interest thereon to any lender.
b) The Company has not been declared willful defaulter by any bank or financial
institution or government or any government authority.
c) The Company has not applied for any term loans during the year for the purpose for
which the loans were obtained.
d) On an overall examination of the financial statements of the Company, funds raised
on short term basis have, prima facie, not been used during the year for long-term
purposes by the Company.
e) 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.
f) The Company has not raised any loans during the year on pledge of securities held in
its subsidiaries, joint ventures or associate companies and hence reporting on clause
3(ix)(f) of the Order is not applicable.
x. In respect of matters required to be reported in clause (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) during the year and accordingly,
reporting under clause 3(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 during the year under review. Accordingly, reporting under clause
3(x)(b) of the Order is not applicable.
xi. In respect of the matters required to be reported in clause (xi):
a) No fraud by the Company and no material fraud on the Company has been noticed or
reported during the year.
b) No report under sub-section (12) of section 143 of the Companies Act has been filed
in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014
with the Central Government, during the year and upto the date of this report.
c) No whistle blower complaints received by the Company during the year (and up to the
date of this report), while determining the nature, timing and extent of our audit
procedures.
xii. Based upon the audit procedures performed and the information and explanations
given by the management, the Company is not a Nidhi Company as prescribed under section
406 of the Act. Accordingly, reporting under clause 3(xii)(a),(b) and (c) of the Order is
not applicable.
xiii. In our opinion, the Company is in compliance with section 177 and 188 of the
Companies Act, 2013 with respect to applicable transactions with the related parties and
the details of related party transactions have been disclosed in the financial statements
as required by the applicable accounting standards.
xiv. In respect of the matters required to be reported in clause (xiv):
a) In our opinion the Company has an adequate internal audit system commensurate with
the size and the nature of its business.
b) We have considered, the internal audit reports for the year under audit, issued to
the Company during the year and till date, in determining the nature, timing and extent of
our audit procedures.
xv. Based upon the audit procedures performed and the information and explanations
given by the management, our opinion, the Company has not entered into any non-cash
transactions with its Directors or persons connected with its directors. Accordingly,
provisions of section 192 of the Companies Act, 2013 and reporting requirement under
clause 3(xv) of the Order are not applicable to the Company.
xvi. In respect of the matters required to be reported in clause (xvi):
a) The certificate of registration No. 13.00209 dated 03.03.1998 issued to company is
cancelled in terms of section 45-IA of the Reserve Bank of India Act, 1934 on 3rd July
2018
b) The company has not conducted any conducted any Non-Banking Financial or Housing
Finance activities without a valid Certificate of Registration (CoR) from the Reserve Bank
of India as per the Reserve Bank of India Act 1934. Accordingly, reporting under clause
3(xvi)(b) is not applicable to the company.
c) In our opinion, there is no core investment company within the Group (as defined in
the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting
under clause 3(xvi)(c) and (d) of the Order is not applicable.
xvii. The Company has not incurred cash losses during the financial year covered by our
audit and the immediately preceding financial year.
xviii. There has been no resignation of the statutory auditors of the Company during
the year.
xix. On the basis of the financial ratios, ageing and expected dates of realisation of
financial assets and payment of financial liabilities, other information accompanying the
financial statements and our knowledge of the Board of Directors and Management plans and
based on our examination of the evidence supporting the assumptions, nothing has come to
our attention, which causes us to believe that any material uncertainty exists as on the
date of the audit report indicating that 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. We, however, state that this is not an assurance as to
the future viability of the Company. We further state that our reporting is based on the
facts up to the date of the audit report and we neither give any guarantee nor any
assurance that all liabilities falling due within a period of one year from the balance
sheet date, will get discharged by the Company as and when they fall due.
xx. Provisions of Section 135 of the Companies Act, 2013 is not applicable to the
Company. Accordingly, reporting under clause 3(xx)(a) and 3(xx)(b) of the Order is not
applicable for the year.
"ANNEXURE B" TO THE INDEPENDENT AUDITOR S REPORT
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 Subway
Finance & Investment CO LTD as of 31st March 2022 in conjunction with
our audit of the standalone 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". 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, issued by ICAI and deemed
to be prescribed under section 143(10) of the Companies Act, 2013, 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 judgement, 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 purposes 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 company are being made only in
accordance with authorizations of management and directors of the company; and
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
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
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.
Opinion
Subjet to qualification noted in main audit report read with notes to accounts in our
opinion the company has, in all material respects an adequate internal financial control
system over financial reporting and such internal financial controls over financial
reporting were operating effectively as at 31st March 2022 based on our audit.
For:
JPC & CO
Chartered Accountants
(Jigna Pranav Chabhadia)
M.NO. 154284
UDIN: 22154284AJVVLG3553
Place: Mumbai
Date: 30 May 2022
+91-9892691696
