|The Members of |
|USG Tech Solutions Limited |
|Report on the Financial Statements |
1. We have audited the accompanying financial statements of USG Tech Solutions Limited("the Company") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Management's Responsibility for the financial statements
2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
3. Our responsibility is to express an opinion on these financial statements based onour audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made there under. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement. An audit involves performing procedures to obtain audit evidenceabout the amounts and the disclosures in the financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany's preparation of the financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances but not for thepurpose of expressing an opinion on whether the Company has in place an adequate internalfinancial controls system over financial reporting and the operating effectiveness of suchcontrols. An audit also includes evaluating the appropriateness of the accounting policiesused and the reasonableness of the accounting estimates made by the Company's Directorsas well as evaluating the overall presentation of the financial statements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the financial statements
4. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 and its Profit/Loss ended on that date.
Report on Other Legal and Regulatory Requirements
5. Companies Auditor's Report Order 2017 "the Order" as amended issued bythe Central Government of India in terms of sub-section (11) of section 143 of the Act isnot applicable to this company.
As required by section 143 (3) of the Act we report that: a. we have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit; b. in our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; c. the Balance Sheet and the Statement of Profit and Lossdealt with by this Report are in agreement with the books of account d. In our opinionthe aforesaid Standalone financial statements comply with the Accounting Standardsspecified under section 133 of the Act read with Rule 7 of the Companies Accounts Rules2014. e. On the basis of written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct. f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". g. With respect to the other matters to beincluded in the Auditor's Report in accordance With Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us: I. The Company does not have any pending litigations whichwould impact its financial position.
II. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
III. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
Consolidated Financial Statements
6. We have prepared the Consolidated Financial statement with RIS PTY LTD (foreignwholly owned Subsidiary) of USG Tech Solutions Limited for Financial Year 2016-2017 asthe financial year of foreign wholly owned subsidiary is 1st July 2016 to 30 June 2017. Wereceived the unaudited balance sheet from the Auditor of the WOS. Consolidated financialstatements are based on the Un-audited Financial statement of WOS & Audited Financialstatement of USG Tech Solutions Limited
For Udit Aggarwal & Associates
CA Udit Aggarwal
M. No.: 529994
Place: New Delhi
Annexure-A referred to in our report of even date of USG Tech Solutions Limited forthe F.Y. 2016-17.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection143 of the Companies Act 2013("the Act")
We have audited the internal financial controls over financial reporting USG TechSolutions Limited ("the Company") as of 31 March 2017 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing Issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) Pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company;(2) Provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and(3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management over ride ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may be come in adequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For Udit Aggarwal & Associates
CA Udit Aggarwal
M. No.: 529994
Place: New Delhi
USG TECH SOLUTIONS LIMITED ('the Company') was incorporated under the CompaniesAct 2013 as a private limited company on 20th July 1999 with the primary objective tocarry on Service Sector Information Technologies services.
b) Significant accounting policies a) Basis of preparation of financial statements
The financial statements have been prepared to comply with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Companies Act 2013 (the 'Act') read with Rule 7 of the Companies (Accounts)Rules 2014 (as amended). The financial statements have been prepared on a going concernbasis under the historical cost convention method on accrual basis.
The company is non-SMC as defined in the General Instructions in respect of AccountingStandard notified under the companies (Accounting Standards) Rules 2006 (as amended).Accordingly the Company has compiled with accounting Standards as applicable to anon-Small and Medium Sized Company.
Previous year figures have been regrouped/ recast to make them comparable with figuresof current year. .
b) Use of estimates
The preparation of financial statements in conformity with the Indian AS requiresmanagement to make estimates and assumptions that affect the reported amounts of assetsand liabilities disclosure of contingent liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during the reporting period.Actual results could differ from these estimates. Any change in the accounting estimatesis adjusted prospectively in the current and future periods. c) Current-non-currentclassification
All assets and liabilities are classified into current and non-current.
An asset is classified as current when it satisfies any of the following criteria:
i. it is expected to be realised in or is intended for sale or consumption in thecompany's normal Operating cycle;
ii. it is held primarily for the purpose of being traded;
iii. it is expected to be realised within 12 months after the reporting date; or
iv. it is cash or cash equivalent unless it is restricted from being exchanged or usedto settle a Liability for at least 12 months after the reporting date.
Current assets include the current portion of non-current financial assets. All otherassets are classified as non-current.
A liability is classified as current when it satisfies any of the following criteria:a) it is expected to be settled in the Company's normal operating cycle; b) it is heldprimarily for the purpose of being traded; c) it is due to be settled within 12 monthsafter the reporting date; or the Company does not have an unconditional right to defersettlement of the liability for atleast 12 months after the reporting date. Terms of aliability that could at the option of the counterparty result in its settlement by theissue of equity instruments do not affect its classification. All other liabilities areclassified as non-current. Current liabilities include current portion of non-currentfinancial liabilities.
Expenses are recognized on accrual basis.
e) Revenue Recognition
Revenue is recognized on accrual basis
Lease rentals in respect of operating lease arrangements are recognized as an expensein the profit & loss account on accrual basis with reference to lease terms and otherconsiderations.
Inventories are valued at lower of cost and net realizable value. Cost is determined ona weighted average basis. Cost of Inventory comprises cost of goods and other costsincurred in bringing the inventories to present location and condition.
g) Fixed assets & Depreciation
Depreciation on fixed assets is in accordance with the provisions of the Companies Act2013 (the 'Act'). The Company effective 1st April 2014 had reviewed the estimated usefullives of its fixed assets in accordance with the provisions of Schedule II to the Act.
h) Income Tax Expense
Income tax expense comprises current tax (i.e. amount of tax for the period determinedin accordance with the Income-tax law) and deferred tax charge or credit (reflecting thetax effects of timing differences between accounting income and taxable income for theperiod). The deferred tax charge or credit and the corresponding deferred tax liabilitiesor assets are recognized using the tax rates that have been enacted or substantivelyenacted by the Balance Sheet date. Deferred tax assets are recognized only to the extentthere is reasonable certainty that the assets can be realized in future; however wherethere is unabsorbed depreciation or carried forward loss under taxation laws deferred taxassets are recognized only if there is a virtual certainty of realization of such assets.Deferred tax assets are reviewed as at each Balance Sheet date and written down orwritten-up to reflect the amount that is reasonably/ virtually certain (as the case maybe) to be realized.
i) Employee Benefits: No Provision of gratuity and leave encashment benefits has beenmade by the company as the company does not have a policy of encasing leaves of employeesand no gratuity is payable to the company during the previous year.
j) Earnings per share: The Company reports basic and diluted earnings per equity sharein accordance with Accounting Standard - 20 "Earnings per Share" of Companies(Accounting Standards) Rules 2006. The basic and dilutive earnings / (loss) per share iscomputed by dividing the net profit / (loss) attributable to equity shareholders for theyear by the weighted average number of equity shares outstanding during the year. Dilutiveearnings per share are computed and disclosed after adjusting the effects of all dilutivepotential equity shares if any except when the results will be anti-dilutive.
k) Provisions and contingent liabilities The Company creates a provision when there ispresent obligation as a result of a past event that probably requires an outflow ofresources and a reliable estimate can be made of the amount of the obligation. Adisclosure for a contingent liability is made when there is a possible obligation or apresent obligation that may but probably will not require an outflow of resources. Whenthere is a possible obligation or a present obligation in respect of which the likelihoodof outflow of resources is remote no provision or disclosure is made.
Provisions are reviewed at each Balance Sheet date and adjusted to reflect the currentbest estimate. If it is no longer probable that an outflow of resources would be requiredto settle the obligation the provision is reversed.
Contingent assets are not recognised in the financial statements. However contingentassets are assessed continually and if it is virtually certain that an inflow of economicbenefits will arise the asset and related income are recognised in the period in whichthe change occurs 3. The Company reports basic earnings per equity share in accordancewith Accounting Standard - 20 "Earnings per Share" of Companies (AccountingStandards) Rules 2006. The basic Earnings/ (loss) per share is computed by dividing thenet profit/ (loss) attributable to equity Shareholders for the year by the weightedaverage number of equity shares outstanding during the year.
| ||For the Year Ended ||For the Year Ended |
|PARTICULARS ||31st March 2017 ||31st March 2016 |
|Net profit /(loss) after tax as per Profit & Loss Account attributable to Shareholders ||2623726.91/- ||1332063.64/- |
|Weighted Average Number of Equity Shares ||39414210 ||39414210 |
|Face value Per Equity Share ||10 ||10 |
|Basic Earnings Per Share (Rs.) ||0.05 ||0.04 |
4. Related Party Transactions
Related party disclosures as required under Accounting Standard (AS) - 18 "Relatedparty Disclosures" notified by the Government in the Companies (Accounting Standard)Rules 2006 are given hereunder:
|Description of relationship : ||Name of related parties |
|Key Management Personnel ||Satish Kumar Gupta |
| ||Servesh Gupta |
|Entities in which major ||Deepak Kumar Bansal |
|shareholder has interest ||Nirmal Garg |
Transaction with the Related Parties
|PARTICULARS ||For the Year Ended 31st March 2017 ||For the Year Ended 31st March 2016 |
|1. Transaction with Key Management Personnel || || |
|A. Director Remuneration by: || || |
|Servesh Gupta ||1800000/- ||1500000/- |
|2. Transaction with Entities in which Directorr has interest || || |
|Loan Paid || || |
|USG Buildcon Pvt. Ltd. ||18549317/- ||- |
|Re-Payment of Loan || || |
|Niskarsh Properties Pvt. Ltd. ||22137500/- ||- |
|Investment || || |
|Zeal Buildhomes LLP ||88490000/- ||- |
|For UDIT AGGARWAL & ASSOCIATES ||For and on behalf of the Board of Directors || |
|Chartered Accountants || || |
|SD/- SD/- ||SD/- ||SD/- |
|Udit Aggarwal Mr. Satish Kumar Gupta ||Mr. Servesh Gupta ||Mrs. Jagpreet Kaur |
|Proprietor Director ||Director ||Company Secretary |
|M.No. 529994 DIN: 01451050 ||DIN: 01451093 ||M.No- A41778 |
|FRN 026161N || || |
|Place: Delhi || || |