We have audited the Standalone financial statements of India Tourism Development Corporation Limited (“the Company”) which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the Standalone Financial Statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs (financial position) of the Company as at March 31, 2024, and its profit (financial performance including other comprehensive income), changes in equity and its cash flows for the year ended on that date except for the possible effects of the matters described in the Basis for Qualified Opinion section of our report.
Basis for Qualified Opinion
A. MSMED Act Compliances:
As per the information provided to us, the Company has identified suppliers registered under the MSMED Act, 2006, by obtaining confirmation from suppliers and information has been collated to the extent of information received.
In the absence of the requisite audit evidence, we are unable to determine the delay in making payment to MSME entities, liability of interest and compliance on such delayed payments in terms of provisions of MSMED Act (Refer point No. 31 to Note No. 39 of the Standalone Financial Statements).
B. Revenue from License fee
The Company has not generated invoices for license fees on licensees of units, viz. Ashok Hotel, Samrat Hotel & Taj Restaurant (units of ITDC) to the tune of Rs. 1292.59 lakhs during the year 2020-21 on account of Covid-19 pandemic, and hence not considered in Books of Accounts. The matter is still under consideration before the board of Directors of ITDC. Thus, the sale of services from license fees and trade receivables of the Company continued to be understated to this extent. (Refer Point no. 11 of Note 39 to the Standalone Financial Statements).
C. Ashok Tours and Travels (ATT) Delhi
1. ATT has entered into arrangements for marketing of travel related business with M/S Shree Plan Your Journey Pvt. Ltd (SPYJ), the GSA dated September 2019. The commission for the said business was to be shared equally with them. We observed the following:-
i. The agency was to make interest free cash deposit of Rs. 180 lakh and furnish a Bank Guarantee for Rs. 120 lakh for the purpose of buying air tickets and other travel-related services up to a sum of Rs. 300 lakhs. Out of the said amount, Rs. 30 lakhs were to be kept as security deposit leaving a balance of Rs. 270 lakhs. The said amount was required to be increased additionally through the deposit of funds as and when required by the business. As per the agreement, the evaluation is to be made by the Company on a monthly basis, and in case of its non-compliance, the issue of all travel-related services would be stopped till funds are received
But we observed that in view of the jump in the business envisaged at Rs. 300 lakhs initially, having gone up to Rs. 9,416 lakhs as of 31st March 2024, the said terms relating to deposit of additional funds by the agency is not being complied with. ATT has kept on “HOLD” Only an amount of Rs. 800 lakhs stands withheld/kept which includes Rs. 560 lakhs in the form of a Security Deposit and a balance of Rs. 240 lakhs in the form of a Bank Guarantee to cover increased business volume, which is not exactly in consonance with terms of extension letter and directives of Board.
ii. We continue to observe that various conditions of the agreement with SPYJ were not complied &/
or not enforced like credit limit, reconciliation, monthly evaluation, additional Bank Guarantee (BG) etc. Despite raising the issues in the previous years and also in the current year. There is periodical reconciliation of PLB from Airlines, identification of unlinked receipts, credit note delays, settlement of commission bills after receiving full payment from SPYJ clients, compliance of SoP etc. There is progress in reconciliation of account with SPYJ, however, still there is a gap of Rs 11.69 lakhs (PY Rs. 34.95 lakhs). Above mentioned deficiencies have repercussions on timely compliance of TDS and provisions under GST Act.
2. ATT (ITDC) has entered into Memorandum of understanding (MOU)/ Travel Services Agreement (TSA) with its various customers comprising of mainly Ministries/Govt. Departments/ Government organisations for rendering travel related services of Domestic and International Air Ticketing at “00”/ Nil charge. Further an Office Memorandum (OM) was issued by MoF on 16th June,2022 for non-levy of any agency charges/ convenience fee. In few cases/services the company is yet to implement such clauses of TSA and aforementioned (OM).
In view of circumstances stated in para 1 and 2 above, we are unable to comment on the final outcome of non- compliance of terms of Agreement, confirmations, reconciliations and/or assessment of recoverability of outstanding in the accounts pertaining to SPYJ and ATT
customers and its consequential impact on the Standalone Financial Statements.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors’ Responsibilities for the Audit of the 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 (ICAI) 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 Qualified opinion, except as stated elsewhere in the report.
Emphasis of Matters
We draw attention to the following notes on the standalone financial statements being matters pertaining to India Tourism Development Corporation Limited requiring emphasis by us:
1. Disinvestments
Pursuant to decision of the Government of India, ministry of Tourism is under process of examining the proposals of sale/lease of hotel properties of the Company including properties of Subsidiary Companies. (Refer
point No. 15(a) to (i) of Note No. 39 to the Standalone Financial Statements)
2. Status of Joint Venture Company
The Company formed Joint Venture Company with Aldeasa of Spain by making of investment in 5000 equity shares of Rs. 10/-each, for which provision has been made for 100% diminution in value of investment. The said Company has been struck off by the Registrar of Companies and dissolved w.e.f. 21st Aug, 2017. The liability Rs.226.51 lakhs as on 31st March,2024 is outstanding towards ITDC Aldeasa, including amount deposited of Rs. 108.38 lakhs. (Refer point no.14 of note no.39 and foot note to note no.10 of the Standalone Financial Statements) Further, the disclosure under point no. 31(IV)(d) to note no.39 is limited to the extent of one party as mentioned above and in the absence of required information with regards to identifying such balances and transactions with other struck off parties (if any), we are unable to comment in absence of any audit evidence in this regard.
3. Amount due from Subsidiaries
Management fee amounting to Rs 65.50 lakhs and interest of Rs 312.46 lakhs on Loans given to Subsidiary prior to 01.04.2016 being prior to Ind AS Transition has not been recognized in the Standalone Financial Statements. (Refer point no. 12 to Note 39 to the Standalone Financial Statements).
No provision for outstanding dues from subsidiaries exceeding 3 years was made, for which management represented that the same will be recovered on settlement of Disinvestments.
4. Amount Receivables:
• The Company has sent letters for confirmation of balances, but response is negligible and hence no exercise was possible for performing reconciliations and/ or assessment in respect of amount recoverable from Trade Receivables; Deposits with Government Departments and others; amount recoverable from suppliers/ vendors, employees and other parties. However, the whole process of obtaining confirmations need to be further strengthened.
Pending such confirmations, reconciliations and/ or assessment, the impact thereof on Standalone Financial Statements are not ascertainable and quantifiable. We are unable to obtain audit evidence for the amount recoverable and periodicity thereof. (Refer Point No. 1 to Note 39 of the Standalone Financial Statements)
• Regular Customers (Government and others) are having debit balances beyond credit policy for which no check chart is prepared for adequate recovery steps, if, taken. Provision for making them as doubtful debts are made as per the company policy. However, the recovery process needs be strengthened. In the absence of any adequate audit evidence with regards to recoverability, periodicity or otherwise, we are unable to comment whether the same are disputable or not. (Refer Point No. 28(I) to Note No.39 of Standalone Financial Statements)
• The Company has made provision for Bad & doubtful debts to the extent of Rs.
301.50 lakhs on account of legal notice/ cases pertaining to few parties apart from provision made in accordance with the usual policy of the Company. (Refer point No. 20 of Note 39 to Standalone Financial Statements)
5. Property tax
There is a dispute regarding the assessment of property tax done by NDMC for The Ashok Hotel, Samrat Hotel & Janpath Hotel.The same has been challenged by the company by filing a writ petition with the Hon’ble High Court of Delhi and the same is still pending with the Hon’able Delhi High Court. (Refer to point no 3 of Note no 38 to the Standalone Financial Statements).
6. Amount Payables:
• Company does not follow a proper system of obtaining confirmations and performing reconciliations and/ or assessment of correct balances in respect of amount payable to Trade Payables; Deposits received (SD/ EMD); Government Departments and other parties. Process was initiated by the company for obtaining balance confirmation, however, without disclosing balances in the books of accounts of the company, response whereof is also negligible. Accordingly, amount payable to various parties are subject to confirmations, reconciliations and/ or assessments. Pending such confirmations, reconciliations and/ or assessments, impact thereof on the Standalone Financial Statements is not ascertainable and quantifiable. (Refer Point No. 1 to Note 39 of Standalone Financial Statements)
• Trade Payables have been bifurcated into two parts i.e., MSME and others and further sub-divided as disputable or otherwise. Disputed trade payables taken only in cases where matter is under litigation. In case of delayed outstanding against MSME/ others, beyond the period of credit policy of the Company have been considered as undisputable by the management. Assessment for identifying disputable one is not available. In absence of any audit evidence with regards to assessment of disputable or otherwise, we are unable to comment thereon and impact thereof on standalone financial statements. (Refer point no 28(II) to note 39 of Standalone Financial Statements)
7. Unlinked receipts
Unlinked receipts of Rs 371.96 Lakhs from debtors against billing by the Company, which could not be matched with the amount standing to the debit of the receivables is appearing as liabilities “Advance from Customers” in the standalone financial statements of the Company. To that extent, the Trade Receivables and Current Liabilities are overstated. (Refer footnote to note number 26 of the standalone financial statements)
8. Inventory
The consumption of stocks, stores, crockery, cutlery, etc. is being arrived by adding opening balances to the purchases and deducting therefrom closing balances as per practice being followed from the past. In absence of maintenance of proper record on day-to-day basis for receipts, issues and closing balances, the shortage,
scrap, misuse or theft of inventory is not ascertainable and quantifiable. (Refer Point no.3 to the Note No. 39 of Standalone Financial Statements).
Further the valuation is continued in certain cases at cost instead of lower the cost or NRV in terms of policy of the Company. Impact thereof is not ascertainable and quantifiable. (Refer Note 7 of Standalone Financial Statements)
9. TDS Receivable/ income tax assessments
TDS Receivable appearing in the books of accounts, for which reconciliation between books of accounts, 26AS, and claim made in Income Tax Returns is in progress. Correctness of TDS receivable could not be verified, and hence we are unable to ascertain the impact thereof in the standalone financial statements (Refer foot note no. 2 to note no.13 of Standalone Financial Statements).
10. Loss/shortage of Property, Plant & Equipment
Records for Property Plant Equipment (Fixed Assets) are not properly maintained and updated at various units. Further, statements wherever, prepared for physical verification has no base and as such verification is not capable of reconciliations either with the Books of Accounts or Fixed Assets Records, wherever, maintained. Hence impact of loss/ shortage/ scrap of assets remains indeterminable. (Refer foot note (e) of Note no.2 of Standalone Financial Statements)
11. Security deposit with DIAL
At Ashok International Trade Division (AITD-A unit of ITDC), the sum of 160.97 lakhs paid in the year 2006-07 as security deposit in the form of fixed deposit (FD) receipt in
favour of Delhi International Airport Private Limited (DIAL) was shown as recoverable. The of FD was encashed during 2007-08 by DIAL on account of service tax charged by DIAL in billing of service provided to the Company. The management, after making due assessment, has made provision for doubtful debts in the F.Y. 2020-21. However, the matter is being disputed by the Company, as it was in the past (Refer to point no.1 to note no.38 of the Standalone Financial Statements)
12. Samrat Hotel (A Unit of ITDC)
At Samrat Hotel (a unit of ITDC), a licensee viz, Good Times Restaurant Pvt. Ltd filed claim towards refund of licensee fee. A sum of Rs 904.16 Lakhs has been deposited by the Company as per interim orders of High Court dated 24.12.2020 (including interest). The matter is in appeal before Hon’ble High Court, Delhi Good Times Restaurant Pvt. Ltd has also filed an execution petition, proceedings whereof has been listed for 03.08.2022. Management is confident for no liability and hence no provision has been considered. (Refer point no 4 of Note no 38 to the Standalone Financial Statements).
13. Ashok Consultancy and Engineering Services (ACES)
a) In Ashok Consultancy and Engineering Services (ACES- A unit of ITDC), out of total 79 projects, 56 projects were completed/ closed but not closed in books of accounts as final bills were reportedly not received/settled. (Refer point no 18 to note no 39 of the standalone financial statements)
b) Dues recoverable from DDA
MoU was signed between ITDC and
DDA, as a special business dealing for furnishing DDA Flats with furniture and fixtures during Commonwealth Games 2010 (CWG). Litigations were raised by the vendors/ parties engaged by ITDC (for supply of furniture & fixtures), due to non-receipt of their ordered items by DDA. Subsequent payments were made by ITDC to vendors as per the Court Orders from time to time. Recovery proceedings were initiated by ITDC from DDA as per the MoU. Thereafter, the matter is under dispute between ITDC and DDA, and is further referred to Administrative Mechanism for Resolution of CPSE’s Disputes (AMRCD). Department of Public Enterprise (MoF) further issued a notification dated 10th February’2023 whereby a committee is formed to examine and submit its recommendations within the stipulated time period of three months from the date of notification of the committee.
During the year the company has further debited DDA with Rs 185.67 lacs with the payment to its vendors on passing court orders in their favor and legal cost incurred thereon. Total amount recoverable from DDA is Rs 1,882.09 lakhs (PY Rs 1,696.42 Lakhs). (Refer point no. 19 to Note no. 39 of Standalone Financial Statements)
ITDC policy and practice adopted for provisioning of receivables, disclosed under Point No. 4 to General Note No. 39, is for transactions entered into during the normal course of business and the transaction entered is not covered under the same. The matter is under consideration before the AMRCD
and the management is very confident of recovery of the amount involved, therefore, no provision was considered necessary as per the company policy.
c) Ministry of Tourism has appointed ITDC as Central Nodal Agency for Central Sector Schemes from F.Y. 2022-23, i.e., Swadesh Darshan Scheme and PRASAD (Pilgrimage Rejuvenation and Spiritual Augmentation Drive) for monitoring over the expenditure limits allotted to the State Tourism Board and to resolve day to day queries raised by Sub Nodal Agency. The amount received against the same has been shown under earmarked balance on the face of the balance sheet separately and corresponding amount is shown under “other financial liability” (Refer foot note to note no. 10(A), footnote to note no. 24 of the standalone financial statements).
14. Legal / interest etc. on contingent liabilities
Amount indicated as contingent liabilities/ claims against the company reflects basic values. Legal expenses interest and other costs not considered being indeterminable. (Refer footnote 2 of note 38 to the standalone financial statement)
Our opinion is not modified in respect of these matters.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report:
|
SI. No.
|
Key Audit Matter
|
How our audit addressed the Key Audit Matter
|
|
1
|
Contingent Liabilities:
There are various litigations (incl. direct/ indirect tax) pending before various forums against the Company and management’s judgement is required for estimating the amount to be disclosed as contingent liability.
We identified this as a key audit matter because the estimates on which these amounts are based involve a significant degree of management judgement in interpreting the cases and it may be subject to management bias.
Refer note no. 38 of the Standalone Financial Statements.
|
We have obtained an understanding of the Company’s internal instructions and procedures in respect of estimation and disclosure of contingent liabilities and adopted the following audit procedures:
- understood and tested the design and operating effectiveness of controls as established by the management for obtaining relevant information for pending litigation cases.
We assessed the management’s underlying assumptions in estimating the tax provision and the possible outcome of the disputes.
We also considered legal precedence and other rulings, including in the Company’s own case, in evaluating management’s position on these uncertain tax positions.
|
|
SI. No.
|
Key Audit Matter
|
How our audit addressed the Key Audit Matter
|
| |
|
- discussing with management any material developments and latest status of legal matters;
- read various correspondences and related documents pertaining to litigation cases produced by the management and relevant external legal opinions obtained by the management and performed substantive procedures on calculations supporting the disclosure of contingent liabilities;
- examining management’s judgements and assessments whether provisions are required;
- considering the management assessments of those matters that are not disclosed as the probability of material outflow is considered to be remote;
- reviewing the adequacy and completeness of disclosures;
Based on the above procedures performed, the estimation and disclosures of contingent liabilities are considered to be adequate and reasonable.
|
|
2
|
Discontinued Operations and Assets Held for Sale:
Assets of the Company continue to be held for sale and discontinued operations as at the balance sheet date.
Refer to note no. 36 and point no. 16 and 17 to note no. 39 of Standalone Financial Statements.
|
We analyzed the management’s estimate of realizable value.
Based on our procedures, we noted no exceptions and consider management’s approach and assumptions to be reasonable.
|
|
3.
|
Investments in Subsidiaries
The Company holds investments in Subsidiaries of Rs 879.87 lakh (equity and preference) out of which investments of Rs. 800.48 lakh (879.8779.38) (equity and preference) pertains to Subsidiaries which has significant
|
We assessed the management’s assumptions and the past trends wherein the amount received on disinvestment by the Company were much more than the amount originally invested in the said subsidiary Companies.
|
|
SI. No.
|
Key Audit Matter
|
How our audit addressed the Key Audit Matter
|
| |
accumulated losses. These subsidiaries
|
As a result of aforesaid, we agree with the
|
| |
are currently under disinvestment.
|
management that the carrying values of these
|
| |
However, Company has received
|
investments held by the Company are supportable
|
| |
Rs. 306 lakhs in payment against of
|
in the context of Company’s Financial Statements
|
| |
investment of Rs. 249.88 in Ranchi
|
except in case of Punjab Ashok Hotel Co. Ltd,
|
| |
Ashok Bihar Corporation Ltd and shown
|
where State Government has proposed to pay
|
| |
as liability till the completion of share
|
reduced amount, which has been accepted by
|
| |
transfer formalities. Assessment of the
|
the Company and provision for shortfall has been
|
| |
recoverable amount of the investments due to the reasons given in Footnote to the note No 3 of the standalone financials statement has been identified as a key audit matter.
|
made in the Books of 2021-22.
|
|
4.
|
Information Technology:
|
Our procedures included but were not limited
|
| |
The company key financial accounting
|
to:
|
| |
and reporting processes are dependent on the Tally Prime Software (latest version) and the company also uses other software/ applications for inventories and billing, i.e., Champagne and Protel respectively for each purpose at the unit level which are not integrated with accounting software. However, the company is in the process for implementation of integration of Protel software, which is used for billing purposes with Tally
|
• Discussing with management and IT department on the IT environment and consideration of the key financial processes to understand where IT systems were integral to the financial reporting process.
• Testing the design of the key IT controls relating to financial reporting systems of the company.
• We also tested the company’s controls around system interfaces, and the transfer of data from one system to another.
|
| |
Prime Software.
|
We applied substantive audit procedures to ensure
|
| |
The IT system in the company are
|
that areas where there are manual controls are
|
| |
not fully automated and manual interventions are in place in preparing and reporting of financial statements. We focused our audit on those IT systems and controls that are significant to the Corporation’s financial reporting process.
Accordingly, we considered this as a
|
operating effectively.
|
| |
Key Audit Matter.
|
|
Our opinion is not modified with respect to above key matters.
Other Matters
A. Goods and Service Tax
• The company has a mechanism for the collection of GST input and output data from the respective Delhi based unit on a monthly basis for the compilation and submission of GST returns and payment of GST taxes, which is being reconciled by the above units and Delhi Head Quarter from time to time and the differences arising in such reconciliation are not being properly traced.
• Further Company has availed GST Input (ITC) on the invoices of the Creditors/ Vendors but the same has not been surrendered back in case payment has not been made within 180 days. The amount where of is not ascertainable and quantifiable in the absence of due records.
In both the above cases, GST liability has not been provided which will impact on the results of Standalone Financial Statements, but the amount thereof is not ascertainable/ determinable in absence of availability of records.
B. Sale of Air Tickets from ATT units
The Contract or arrangement is between Airlines and Ashok Tours and Travels (ATT-units of ITDC) for the purchase of tickets in the name of customers of ATT and accordingly accounts are settled between the two for purchase of tickets and make payment after deductions /adjustments for refund of tickets cancelled and/or
incentives. ATT has arrangement with its customers for sale of air tickets for which invoices are generated. Based on expert’s opinion, the amount of services charges made over and above the cost of Air tickets is being shown as revenue, while the cost of Air tickets is neither shown as purchases nor turnover of the Company. The management represented that this is the practice of the industry. This does not affect the profitability of the Company but Turnover and purchases are understated to that extent.
Refer note 39 (24) regarding system of bifurcation in Debtors and other receivables for year 2023-24 and previous years. The closing balance of receivables against sales is bifurcated in debtors and other receivables on the basis of average margin as per internal working done by the Company.
Our opinion is not modified with respect of above matters.
Information other than the standalone Financial Statements and Auditors’ Report thereon
The Company’s Management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Business Responsibility Report, Corporate Governance and Shareholder’s Information, but does not include the Standalone Financial Statements and our auditor’s report thereon.
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 doing so consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our 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 and Board of Directors’ Responsibility for the Standalone Financial Statements
The Company’s Management and Board of Directors is 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 Financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed 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 judgements 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 misstatements, whether due to fraud or error.
In preparing the Standalone Financial Statements, management is 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 the operations or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibility for 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate Internal Financial Controls system with respect 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,
™ll
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 Ind As financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
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 most significance in the audit of standalone Ind AS 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 we would reasonably be expected to outweigh the public interest benefits of such communication.
Report on other Legal and Regulatory
Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act and on the basis of such checks of the books and records of the Company as we have considered appropriate and according to the information and explanation given to us, we give in the “Annexure-A” statement on the matters Specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. We are enclosing our report in terms of section 143(5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, in the “Annexure-B” on the directions/ sub directions issued by the Comptroller and Auditor General of India.
3. (A) As required by section 143(3)
of the Act read with Companies (Audit and Auditors) Rules 2014 and amendments therein, subject to matters of qualification, emphasis, key matters & other matters stated above, in our opinion and to the best of our information and according to the explanations given to us:
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 accounts 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 Change in equity and the Statement of Cash Flow 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 Indian Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015 as amended.
e) Being a Government Company, pursuant to notifications NO. GSR 463(E) dated 05th June, 2015 Issued by the Ministry of corporate Affairs, Government of India, provisions of sub section (2) of section 164 of the Act, are not applicable to the Company.
f) Matters of Qualifications have been stated above under qualified opinion.
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 Annexure 'B'.
h) As per Notification no. GSR 463(E) dated June 05, 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 of the Act is not applicable to the Government Companies. Accordingly reporting in accordance with requirement of provisions of section 197(16) of the Act is not applicable on the Company.
i) With respect to other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014(as amended), 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 31st March, 2024 on its financial position in Standalone Financial Statements - Refer note no -38 of 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; and
iii. There has been no delay in transfer of amount required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. a. The Management has
represented that,the Company has not used an Intermediary for advancing /loaning/ investing funds to/ in an ultimate beneficiary or has not provided any guarantee /security or the like on behalf of the ultimate beneficiary.
b. The Management has represented that, the Company has not acted as an intermediary for advancing / loaning / investing funds to / in an ultimate beneficiary identified by the Funding Party
or has not provided any guarantee/security or the like on behalf of the Funding party.
c. Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (iv)(a) and (iv)(b) contain any material misstatement.
v. As stated in foot note to note no. 15 to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.
vi. Based on our examination, which included test checks, the company has used accounting software for maintaining its books of account for the financial year ended March 31 st, 2024 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in software. Further during the course of our audit, we did not come across any instance of the audit trail feature being tampered with.
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023,
reporting under 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for the record retention is not applicable for the financial year ended March 31, 2024.
For HDSG & ASSOCIATES Chartered Accountants Firm Registration No: 002871N
Sd/-
Harbir Singh Gulati (Partner)
Membership No: 084072 Place: New Delhi
UDIN: 24084072BKAJUU3873 Date: May 11, 2024
|