Mar 31, 2019
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the standalone financial statements of UFO Moviez India Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2019, 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, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as âthe standalone financial statementsâ).
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 (âthe Actâ) 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 31 March 2019, and of its profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (âSAsâ) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone 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 together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters (âKAMâ) 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 do not provide a separate opinion on these matters.
Key Audit Matters
Key audit matters |
How our audit addressed the key audit matter |
Revenue recognition - Advertisement revenue |
|
Company has recognized advertisement revenue of |
In relation to recognition of revenue from advertisements, we |
'' 21,372.00 lacs for the year ended 31 March 2019 (Refer Notes |
have: |
21 and 2(h) to the standalone financial statements), being 50 % of total revenue. |
-Considered the appropriateness of management''s revenue |
recognition policy in light of the requirements of Ind AS 115; |
|
We identified advertisement revenue as a KAM considering - |
-Assessed the reasonableness of the timing and amount of |
-There may be an inherent risk regarding the existence and |
revenue recognized during the year; |
accuracy of revenue given that the advertisements are availed through various direct customers including a number of small players, individual advertisement agents and large advertisement agencies; |
- Assessed the design, implementation and operating effectiveness of management''s key internal controls over revenue recognition; - assessed with assistance from our internal IT specialists, the design, implementation and operating effectiveness of management''s key internal IT controls over the completeness and accuracy of the scheduling, billing and accounting system; - tested the completeness and accuracy of financial information contained within the advertisement module and billing systems, which included system generated reports, recording of revenue, and accrual of revenue at period end; - Detailed testing on a sample of sales transactions from origination through to the general ledger to ensure that revenue recognized was complete and was recorded in the appropriate period and at the correct value; |
-The Company has an automated proprietary IT system |
-On selected samples, we |
for scheduling advertisements, invoicing and accounting |
o confirmed our understanding of the process by which |
for related revenues. Revenue recognition is based on |
revenue is determined by the relevant billing system |
automated playback logs retrieval and advertisement |
|
payout rates incorporated in the IT system. Further, various modules such as for processing of advertisement content |
o verified underlying records such as sales contracts, release orders, invoices, logs for advertisements displayed |
and scheduling of advertisements are linked to the financial |
|
module. The accuracy and completeness of Company''s |
o performed procedures on release orders over / under |
revenue is thus largely dependent on the Company''s IT |
unutilized and obtained rationale from management for |
system and may be susceptible to management override of |
the same |
controls. |
o performed procedures to confirm the existence of the customers o performed margin analysis on overall advertisement revenue. |
Key audit matters |
How our audit addressed the key audit matter |
Impairment of investment in and loans to subsidiaries |
|
The Company has investments in and loans to its subsidiaries |
Our audit procedures included, amongst others, the following: |
- the carrying amount of Company''s investment in subsidiaries |
-Evaluating the Company''s process for identifying indicators |
is '' 11,039.36 lacs and the Company has advanced loans |
|
amounting to '' 1,287.97 (refer Notes 4 and 5 to the standalone |
of impairment of its investment in subsidiaries and / or |
financial statements). Management has carried out an impairment assessment based on the business plan, using the discounted |
recoverability of loans by assessing management''s review of the financial performance of each subsidiary; |
free cash flow model. |
-assessed the recoverable amount based on the valuation. |
We identified this as a KAM considering: |
This included assessment of historical accuracy of |
management''s assumptions and forecasts and review of |
|
-there is a risk that the investments in and loans to certain |
documentation supporting key judgements; |
subsidiaries may not be recovered. |
|
The annual impairment testing involves complexity and significant judgment in evaluating underlying assumptions |
-reconciled input data to approved budgets and tested mathematical accuracy; |
for estimating recoverable amount. The Discounted |
-performed sensitivity analysis around the key assumptions, |
Forecasted Cash Flows (âDCFâ) model is based on key |
to ascertain the extent to which adverse changes, both |
assumptions such as probability of securing and executing |
individually or in aggregate, could impact the analysis; |
future advertisement contracts, estimating growth rates |
|
and terminal value, as well as using an appropriate |
-Discussed management''s strategic and operational plans |
weighted - average cost of capital (discount rate). |
for the foreseeable future. |
Other Information
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doinq so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Management''s Responsibility for the Standalone Financial Statements
The Company''s management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (âInd ASâ) 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company''s 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.
Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s 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 standalone financial statements.
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 standalone 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 standalone financial statements in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management''s 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 Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone 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 auditor''s 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 standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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.
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.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matters
The comparative financial statement of the Company for the year ended 31 March 2018 prepared in accordance with Ind AS and included in these standalone financial statements have been audited by the predecessor auditor who expressed an unmodified opinion as per the report dated 29 May 2018. Additionally, the financial statement for the year ended 31 March 2018 have been adjusted to give effect to the Scheme of amalgamation (''the Scheme'') of the Company''s wholly owned subsidiaries including its step down subsidiaries namely, V N Films Private Limited (âVNFPLâ), Edridge Limited (âELâ), UFO International Limited (âUILâ) and Southern Digital Screenz India Private Limited (âSDSâ) (together referred to as the âmerging companiesâ) with the Company, which adjustments have been audited by us. Our conclusion is not modified in respect of the above matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
(A) 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 purposes 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, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
(e) On the basis of the written representations received from the Directors as on 31 March 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(B) With respect to the other matters to be included 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 of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31 March 2019 on its financial position in its standalone financial statements - Refer Note 34 to the standalone financial statements;
ii. The Company did not have any long term contracts including derivative contracts, for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these standalone financial statements since they do not pertain to the financial year ended 31 March 2019.
(C) With respect to the matter to be included in the Auditors'' Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limits laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.
With reference to the Annexure A referred to in the Independent Auditor''s Report to the members of the Company on the standalone financial statements for the year ended 31 March 2019, we report the following:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets, by which all fixed assets are verified in a phased manner over a period of two years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, certain fixed assets were physically verified during the year and no discrepancies were noticed on such verification.
(c) According to the information and explanations given to us, the Company does not have any immovable property. Thus, paragraph 3(i)(c) of the Order is not applicable to the Company.
(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. The Company has maintained proper records of inventory. There were no discrepancies noticed on verification between the physical stock and the book records.
(iii) The Company has granted unsecured loan to its wholly-owned subsidiary which is also a party covered in the register maintained under Section 189 of the Act. The loan and interest thereon are repayable on demand. Management informs us that Company has not demanded repayment of any such loan or interest during the year and thus there is no default on the part of the party to whom the money has been lent. In our opinion and according to the information and explanations given to us, the terms and conditions of the said loan are not prejudicial to the interest of the Company.
(iv) The Company has not granted any loans or provided any guarantees or security to the parties covered under Section 185 of the Act. The Company has complied with the provisions of Section 186 of the Act in respect of investments made or loans or guarantee or security provided to the parties covered under Section 186.
(v) The Company has not accepted any deposits from the public within the meaning of the directives issued by the Reserve Bank of India, provisions of Section 73 to 76 of the Act, any other relevant provisions of the Act and the relevant rules framed there under.
(vi) The Central Government has not prescribed the maintenance of cost records under Section 148 of the Act for any of the services rendered by the Company.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident fund, Employees'' State Insurance, Income-tax, Goods and Services tax, duty of Customs, Value added tax, Sales tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, Company did not have any dues on account of duty of Excise and Cess.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees'' State Insurance, Income-tax, Goods and Services tax, duty of Customs, and other material statutory dues were in arrears as at 31 March 2019 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues of Income-tax, Goods and Service tax, duty of customs which have not been deposited on account of any dispute. The following dues of Service tax, Value added tax and Sales tax have not been deposited by the Company on account of disputes:
Name of the statute |
Nature of dues1 |
Amount (Rs, in Lacs)* |
Period (Financial year) |
Forum where the dispute is pending |
Finance Act, 1994 and Service Tax Rules, 1994 |
Service tax |
1,526.87 |
2007-08 to 2013-14 |
Honorable High Court of Mumbai |
Finance Act, 1994 and Service Tax Rules, 1994 |
Service tax |
3,637.32 |
2014-15 to 2017-18 |
Commissioner of Service Tax |
Bihar Value Added Tax Act , |
Value added tax |
6.00 |
2007-08 to 2008-09 |
Joint Commissioner of Sales Tax (Appeals) |
West Bengal Value added tax |
Value added tax |
42.00 |
2007-08 |
Sales Tax Appellate Tribunal |
Bihar Value Added Tax Act |
Value added tax |
5.00 |
2010-11 |
Joint Commissioner of Sales Tax (Appeals) |
Tamilnadu Sales Tax |
Sales tax |
2.00 |
2014-15 to 2015-16 |
Joint Commissioner of Sales Tax (Appeals) |
Gujarat Sales Tax |
Sales tax |
1.00 |
2013-14 |
Joint Commissioner of Sales Tax (Appeal) |
Andhra Pradesh Sales Tax |
Sales tax |
5.00 |
2015-16 |
Joint Commissioner of Sales Tax (Appeal) |
Kerala Sales Tax |
Sales tax |
28.00 |
2012-13 |
Joint Commissioner of Sales Tax (Appeal) |
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to banks. The Company did not have any outstanding loans or borrowings from financial institutions or government and there are no dues to debenture holders during the year.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.
(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud by the Company or any instances of fraud on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the management.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) According to the information and explanations given to us, in our opinion, the Company is not a Nidhi Company as prescribed under Section 406 of the Act.
(xiii) In our opinion and according to the information and explanations given to us, all transactions with the related parties are in compliance with Sections 177 and 188 of the Act, the details of such transactions have been disclosed in the standalone financial statements as required under the Ind AS.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.
(xvi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company is not required to be registered under Section 45 IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3 (xvi) of the Order is not applicable to the Company.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
Opinion
We have audited the internal financial controls with reference to financial statements of UFO Moviez India Limited (âthe Companyâ) as of 31 March 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2019, based on the internal financial controls with reference to financial statements 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 (the âGuidance Noteâ).
Management''s Responsibility for Internal Financial Controls
The Company''s management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. 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 Company''s 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 (hereinafter referred to as âthe Actâ).
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements. 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 with reference to financial statements were established and maintained and whether 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 with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of such internal financial controls, 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 auditor''s judgment, including the assessment of the risks of material misstatement of the standalone 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 Company''s internal financial controls with reference to financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
A Company''s internal financial controls with reference to financial statements 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 Company''s internal financial controls with reference to financial statements include 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 Company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to financial statements, 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 with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
For B S R & Co. LLP
Chartered Accountants
Firm''s Registration No: 101248W/W-100022
Place : Mumbai Rajesh Mehra
Date : 21 May 2019 Partner
Membership No: 103145
Mar 31, 2018
INDEPENDENT AUDITORâS REPORT
To the Members of UFO Moviez India Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of UFO Moviez India Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS 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 of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS 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 standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone 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, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the 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, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, 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 with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) With respect to the other matters to be included 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 of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 34 to the standalone Ind AS financial statements;
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.
Referred to in Paragraph 1 under the heading âReport on Other Legal and Regulatory Requirementsâ of our report of even date
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.
(c) According to the information and explanations given by the management, there are no immovable properties, included in property, plant and equipment of the Company and accordingly, the requirements under paragraph 3(i)(c) of the Order are not applicable to the Company.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) The Company has granted a loan that is re-payable on demand, to a company covered in the register maintained under section 189 of the Act. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loan are not prejudicial to the Company''s interests.
(b) The Company has granted a loan that is re-payable on demand, to a company covered in the register maintained under section 189 of the Act. We are informed that the Company has not demanded repayment of such loan and interest during the year, and thus, there has been no default on the part of the party to whom the money has been lent.
(c) There are no amounts of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Act which are overdue for more than ninety days.
(iv) In our opinion and according to the information and explanations given to us, provisions of section 186 of the Act in respect of loans and advances given, investments made and, guarantees given have been complied with by the Company. The provisions of section 185 of the Act in respect of loans to directors including entities in which they are interested and provisions of section 186 of the Act with respect to securities given are not applicable to the Company and hence not commented upon.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under clause 148(1) of the Act, for the products/services of the Company.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employee''s state insurance, income-tax, sales-tax, service tax, custom duty, value added tax, goods and service tax, cess and other material statutory dues applicable to it. The provisions relating to excise duty are not applicable to the Company.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, service tax, sales-tax, custom duty, value added tax, goods and service tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. The provisions relating to excise duty are not applicable to the Company.
(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, custom duty, value added tax, goods and service tax and cess on account of any dispute, are as follows:
Nature of Statute |
Nature of Dues |
Amount (Rs, in lacs) |
Period to which the Amount Relates |
Forum where the dispute is pending |
West Bengal VAT Act, 2003 |
Value Added Tax |
41.96 |
2007-2008 |
Tribunal |
Bihar VAT Act, 2003 |
Value Added Tax |
5.80 |
2007-2008 and 2008-2009 |
Commercial Tax Officer |
Finance Act, 1994 |
Service Tax |
4.99 |
2008-2009 to 2011-2012 |
Commissioner of Central Excise (Appeals) |
Bihar VAT Act, 2005 |
Value Added Tax |
5.03 |
2010-2011 |
Commissioner of Central Excise (Appeals) |
Finance Act, 1994 |
Service Tax |
8.15 |
2007-2008 to 2009-2010 |
Commissioner of Central Excise (Appeals) |
Kerala VAT Act, 2003 |
Value Added Tax |
34.90 |
2012-2013 |
Commissioner of Central Excise (Appeals) |
Nature of Statute |
Nature of Dues |
Amount (Rs, in lacs) |
Period to which the Amount Relates |
Forum where the dispute is pending |
Finance Act, 1994 |
Service Tax * |
3,727.98 |
2008-2009 to 2013-2014 |
High Court |
Finance Act, 1994 |
Service Tax* |
937.45 |
2008-2009 to 2013-2014 |
Commissioner of Service Tax |
*In addition, interest and penalty are payable under the relevant provisions and rules.
The provisions relating to excise duty are not applicable to the Company.
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to a financial institution and banks. The Company does not have any dues to debenture holders or government.
(ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of term loans for the purposes for which they were raised. The Company has not raised money by way of initial public offer or further public offer (including debt instruments).
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act, where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given by the management, the Company has complied with provisions of section 42 of the Companies Act, 2013 in respect of the private placement of shares and share warrants during the year. According to the information and explanations given by the management, we report that the amounts raised, have been used for the purposes for which the funds were raised. The Company has not made any preferential allotment or private placement of fully or partly convertible debentures during the year and hence is not applicable to the Company and accordingly not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Act.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of UFO Moviez India Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s 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 the Company''s 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent 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 with reference to these standalone financial statements 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 over financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, 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 auditor''s 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 internal financial controls over financial reporting with reference to these standalone financial statements.
Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Financial Statements
A company''s internal financial control over financial reporting with reference to these standalone financial statements 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 company''s internal financial control over financial reporting with reference to these standalone financial statements 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting With Reference to these Standalone Financial Statements
Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone financial statements, 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 with reference to these standalone financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2018, 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.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Amit Majmudar
Partner
Membership Number: 36656
Place of Signature: Mumbai
Date: May 29, 2018
Mar 31, 2017
To the Members of UFO Moviez India Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of UFO Moviez India Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with 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 and the Companies (Accounting Standards) Amendment Rules, 2016. 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 the 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone 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, issued by the Institute of Chartered Accountants of India, 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 disclosures in the financial statements. The procedures selected depend on the auditorâs 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 auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone 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, 2017 its profit, and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to note 34(e)(ii) to the financial statements for a demand of '' 220,111,033/- (excluding interest and penalty) received by the Company during the year ended March 31, 2016 for disallowance of CENVAT credit on digital cinema equipments and which is more fully described therein. Based on legal opinion obtained, the Company is of the view that CENVAT credit should be available to it and is contesting this demand. Hence, no provision has been considered by the management in these standalone financial statements. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â a statement on the 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016;
(e) In our opinion, the matter described under the Emphasis of Matter para above may have an adverse effect on the functioning of the Company.
(f) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of section 164 (2) of the Act;
(g) 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 âAnnexure 2â to this report;
(h) With respect to the other matters to be included in the Auditorâs 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 has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 34 to the standalone financial statements;
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.
iv. The Company has provided requisite disclosures in Note 45 to these standalone financial statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management.
Re: UFO Moviez India Limited (âthe Companyâ)
Referred to in Paragraph 1 under the heading âReport on Other Legal and Regulatory Requirementsâ of our report of even date
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.
(c) According to the information and explanations given by the management, there are no immovable properties, included in property, plant and equipment of the Company and accordingly, the requirements under paragraph 3(i)(c) of the Order are not applicable to the Company.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) The Company has granted a loan that is re-payable on demand, to a company covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Actâ). In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loan are not prejudicial to the Companyâs interests.
(b) The Company has granted a loan that is re-payable on demand, to a company covered in the register maintained under section 189 of the Act. We are informed that the Company has not demanded repayment of such loan and interest during the year, and thus, there has been no default on the part of the party to whom the money has been lent.
(c) There are no amounts of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Act which are overdue for more than ninety days.
(iv) In our opinion and according to the information and explanations given to us, provisions of section 186 of the Act in respect of loans and advances given, investments made and, guarantees given have been complied with by the Company. The provisions of section 185 in respect of loans to directors including entities in which they are interested and provisions of section 186 with respect to securities given are not applicable to the Company and hence not commented upon.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under clause 148(1) of the Act, for the products/services of the Company.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeeâs state insurance, income-tax, sales-tax, service tax, custom duty, value added tax, cess and other material statutory dues applicable to it. The provisions relating to excise duty are not applicable to the Company.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, service tax, sales-tax, custom duty, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. The provisions relating to excise duty are not applicable to the Company.
(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, custom duty, value added tax and cess on account of any dispute, are as follows:
Nature of Statute |
Nature of Dues |
Amount ('') |
Period to which the amount relates |
Forum where the dispute is pending |
West Bengal VAT Act, 2003 |
Value Added Tax |
4,195,703 |
2007-2008 |
Tribunal |
West Bengal VAT Act, 2003 |
Value Added Tax |
579,512 |
2007-2008 and |
Commercial Tax Officer |
2008-2009 |
||||
Finance Act, 1994 |
Service Tax |
499,411 |
2008-2009 to |
Commissioner of Central |
2011-2012 |
Excise (Appeals) |
|||
Finance Act, 1994 |
Service Tax* |
466,543,240 |
2008-2009 to |
Custom, Excise and |
Penalty on |
466,553,240 |
2013-2014 |
Service Tax Appellate |
|
Service Tax |
Tribunal |
*In addition, interest is payable under the relevant provisions and rules. The provisions relating to excise duty are not applicable to the Company.
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to a financial institution and banks. The Company does not have any dues to debenture holders or government.
(ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of term loans for the purposes for which they were raised. The Company has not raised money by way of initial public offer or further public offer (including debt instruments).
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act, where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Act.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Annexure 2 to the Independent Auditorâs Report of even date on the standalone financial statements of UFO Moviez India Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
To the Members of UFO Moviez India Limited
We have audited the internal financial controls over financial reporting of UFO Moviez India Limited (âthe Companyâ) as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs 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 the Companyâs 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 (âthe Actâ).
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Act, to the extent 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 auditorâs 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 internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs 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 companyâs 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 companyâs 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
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, 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.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Govind Ahuja
Partner
Membership Number: 48966
Place of Signature: Mumbai
Date: May 17, 2017
Mar 31, 2016
To the Members of UFO Moviez India Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of UFO Moviez India Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance 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, 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 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone 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, issued by the Institute of Chartered Accountants of India, as 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 auditorâs 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 auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 standalone financial statements.
Opinion
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 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, 2016, its profit and its cash flows for the year ended on that date.
Emphasis of Matter
1. We draw attention to note 34(e)(ii) to the financial statements for a demand of '' 220,111,033 (excluding interest and penalty) received by the Company for disallowance of CENVAT credit on digital cinema equipments and which is more fully described therein. Based on legal opinion obtained, the Company is of the view that it should be entitled to avail CENVAT credit and is contesting this demand. Hence, no provision has been considered by the management in the financial statements.
2. We also draw attention to note 41 to the financial statements which describes that the managerial remuneration (including perquisite value of stock options exercised by two directors during the year determined as per Income Tax Act, 1961) for the year is in excess of the limits specified under section 197 read with schedule V of the Act by Rs. 158,271,959 and more fully described therein. Pending the approval from the Central Government for waiver of such excess remuneration, no adjustments have been made to the financial statements.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â a statement on the 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone 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) In our opinion, the matter described under paragraph 1 of the Emphasis of Matter paragraph above may have an adverse effect on the functioning of the Company.
(f) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of section 164 (2) of the Act;
(g) 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 âAnnexure 2â to this report; and
(h) With respect to the other matters to be included in the Auditorâs 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 has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 34 to the financial statements;
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 1 to the Independent Auditorsâ Report
Re: UFO Moviez India Limited (âthe Companyâ)
Referred to in Paragraph 1 under the heading âReport on other legal and regulatory requirementsâ of our report of even date
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.
(c) According to the information and explanations given by the management, there are no immovable properties, included in fixed assets of the Company and accordingly, the requirements under paragraph 3(i)(c) of the Order are not applicable to the Company.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) The Company has granted loan that is re-payable on demand, to a Company covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Actâ). In our opinion and according to the information and explanations given to us, the terms and conditions of the loan are not prejudicial to the interest of the Company.
(b) The loan granted is re-payable on demand. We are informed that the Company has not demanded repayment of such loan and interest during the year, and thus, there has been no default on the part of the party to whom the money has been lent.
(c) There are no amounts of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days.
(iv) In our opinion and according to the information and explanations given to us, provisions of 186 of the Act in respect of loans and advances given, investments made and, guarantees given have been complied with by the Company. The provisions of section 185 in respect of loans to directors including entities in which they are interested and provisions of section 186 with respect to securities given are not applicable to the Company and hence not commented upon.
(v) The Company has not accepted any deposits from the public.
(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under clause 148(1) of the Act, for the products/services of the Company.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeeâs state insurance, income-tax, sales-tax, service tax, custom duty, value added tax, cess and other material statutory dues applicable to it. The provisions relating to excise duty are not applicable to the Company.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, service tax, sales-tax, duty of custom, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. The provisions relating to excise duty are not applicable to the Company.
(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, custom duty, value added tax and cess on account of any dispute, are as follows:
Nature of Statute |
Nature of Dues |
Amount (Rs.) |
Period to which the amount relates |
Forum where dispute is pending |
West Bengal VAT Act, 2003 |
Value Added Tax |
4,195,703 |
2007-2008 |
Tribunal |
West Bengal VAT Act, 2003 |
Value Added Tax |
579,512 |
2007-2008 and 2008-2009 |
Commercial Tax Officer |
Finance Act, 1994 |
Service Tax |
499,411 |
2008-2009 to 2011-2012 |
Commissioner of Central Excise (Appeals) |
Finance Act, 1994 |
Service Tax1 |
466,543,240 |
2008-2009 to |
Custom, Excise and |
Penalty on Service Tax |
466,553,240 |
2013-2014 |
Service Tax Appellate Tribunal |
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to a financial institution and banks. The Company does not have any dues to debenture holders or government.
(ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of term loans for the purposes for which they were raised. The Company has not raised money by way of initial public offer or further public offer (including debt instruments).
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management and as explained in Note 41 to the financial statements and paragraph 2 of our report under the heading âEmphasis of Matterâ, the Company is in the process of applying to the Central Government for waiver of excess managerial remuneration (including perquisite value of stock options exercised by two directors during the year determined as per Income Tax Act, 1961) over and above limits specified under section 197 read with schedule V of the Act by Rs. 158,271,959.
Sr. No. |
Name of the Director, MD, WTD or any other person to whom remuneration is provided or paid which is not in accordance with section 197 |
Amount involved (in excess of the limit prescribed) |
1 |
Sanjay Gaikwad (Managing Director) |
158,271,959 |
2 |
Kapil Agarwal (Joint Managing Director) |
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act, where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Annexure 2 to the Independent Auditorâs Report of even date on the Standalone Financial Statements of UFO Moviez India Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
To the Members of UFO Moviez India Limited
We have audited the internal financial controls over financial reporting of UFO Moviez India Limited (âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs 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 the Companyâs 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 Act.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Act, 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 auditorâs 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 internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs 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 companyâs 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 companyâs 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
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, 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.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firmâs Registration Number: 101049W/E300004
per Govind Ahuja
Partner
Membership Number: 48966
Place of Signature: Mumbai
Date: May 26, 2016
Mar 31, 2015
We have audited the accompanying financial statements of UFO Moviez
India Limited ("the Company"), which comprise the Balance Sheet as at
March 31,2015, the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
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 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, financial performance and cash
flows of the Company in accordance with 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 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 the design, implementation and
maintenance of adequate internal financial control 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.
Auditor's 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 thereunder. We conducted our
audit in accordance with the Standards on Auditing as 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 disclosures in the financial statements. The procedures
selected depend on the auditor's 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 auditor
considers internal financial control relevant to the Company's
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 effectiveness of such
controls. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the Company's 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.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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 31,2015, its
profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's report) Order, 2015 ("the
Order") 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
statement on the 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, Statement of Profit and Loss, and Cash Flow
Statement 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 March 31,2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31,2015, from being
appointed as a director in terms of section 164 (2) of the Act;
(f) With respect to the other matters to be included 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 of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 33 to the
financial statements;
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 to the Independent Auditors' Report
Re: UFO Moviez India Limited ('the Company')
Referred to in Paragraph 1 under the heading "Report on other legal and
regulatory requirements" of our report of even date
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Fixed assets have been physically verified by the management during
the year and no material discrepancies were identified on such
verification.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) The Company has granted loans that are re-payable on demand,
to company covered in the register maintained under section 189 of the
Companies Act, 2013 ("the Act"). We are informed that the Company has
not demanded repayment of any such loan during the year, and thus,there
has been no default on the part of the parties to whom the money has
been lent. The payment of interest has been regular.
(b) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under section 189 of
the Act.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
(v) The Company has not accepted any deposits from the public.
(vi) To the best of our knowledge and as explained, the Central
Government has not specified the maintenance of cost records under
clause 148(1) of the Act, for the products/services of the Company.
(vii) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, employee's state insurance, income-tax, sales-tax, wealth-tax,
service tax, custom duty, wealth tax, value added tax, cess and other
material statutory dues applicable to it. The provisions relating to
excise duty are not applicable to the Company.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees'
state insurance, income-tax, service tax, custom duty, wealth tax,
sales-tax, value added tax, cess and other material statutory dues were
outstanding, at the year end, for a period of more than six months from
the date they became payable. The provisions relating to excise duty
are not applicable to the Company.
(c) According to the information and explanation given to us, there are
no dues of custom duty, wealth tax, sales tax, service tax and cess
which have not been deposited on account of any dispute. According to
the records of the Company, the dues of value added tax (VAT), and
Income tax outstanding on account of any dispute are as follows:
Nature of Statute Nature of Dues Amount
(Rs.)
West Bengal VAT Act, Value Added Tax 4,195,703
2003
Bihar VAT Value Added Tax 579,512
Income Tax Act, 1961 Penalty 717353
Income Tax Act, 1961 Income Tax 22,710,000
Income Tax Act, 1961 Income Tax 9,800,897
Nature of Statute Period to which the Forum where dispute
amount relates is pending
West Bengal VAT Act, 2007-08 Tribunal
2003
Bihar VAT 2007-08 and 2008-09 Commercial tax
Officer
Income Tax Act, 1961 2006-07 Commissioner of
Income Tax
(Appeals)
Income Tax Act, 1961 2007-08 to 2009-10 Income Tax
Appellate Tribunal
(ITAT)
Income Tax Act, 1961 2010-11 Dispute Resolution
Panel (DRP)
The provisions relating to excise duty are not applicable to the
Company.
(d) There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company in accordance
with the relevant provisions of the Companies Act, 1956 (1 of 1956) and
rules made thereunder.
(viii) The Company has no accumulated losses at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
(ix) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution and bank. The Company does not have any dues to debenture
holders.
(x) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from banks, the
terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company. According to the
information and explanations given to us, the Company has not given any
guarantee for loans taken by others from financial institutions.
(xi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xii) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W
per Govind Ahuja
Partner
Membership Number: 48966
Place of Signature: Mumbai
Date: July 23, 2015
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