To the MembersAjcon Global Services Ltd.
REPORT ON THE AUDIT OF THE STANDALONE INDAS FINANCIAL STATEMENTS Opinion
We have audited the accompanying Standalone Ind AS financial statements of Ajcon GlobalServices Limited("the Company") which comprise the Balance sheet as at March31 2020 the Statement of Profit and Loss (including Other Comprehensive Loss) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and notesto the Ind AS financial statements including a summary of significant accounting policiesand other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2020 its loss includingother comprehensive loss its cash flows and the changes in equity for the year ended onthat date.
Basis for opinion
We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing(SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the 'Auditor'sResponsibilities for the Audit of the Ind AS Financial Statements' section of our report.We are independent of the Company in accordance with the 'Code of Ethics' issued by theInstitute of Chartered Accountants of India together with the ethical requirements thatare relevant to our audit of the financial statements under the provisions of the Act andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the standalone Ind AS financial statements.
Emphasis of matter
We draw attention to Note No 33 to the financial statements which describes thepossible effect of uncertainties relating to COVID-19 pandemic on the Company's financialperformance as assessed by the Management. Our opinion is not modified in respect of theabove matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements of the current year. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key audit mattersto be communicated in our report.
|Sr. No. ||Key Audit Matters ||How the matter was addressed in our audit |
|1. ||Impact of COVID-19 pandemic on Going Concern Refer Note No.33 "Estimation related to COVID-19" of the financial statements. On 11 March 2020 the World Health Organisation declared the Novel Coronavirus (COVID-19) outbreak to be a pandemic. The Indian Government has imposed lock-downs across the country from 24 March 2020 up to 30 June 2020. These lockdowns and restrictions due to COVID-19 pandemic have posed significant ||Our audit procedures included the following: |
| || || Obtained an understanding of the key controls relating to the Company's forecasting process |
| || || Compared the forecasted statement of profit and loss and cash flows with the Company's business plan approved by the board of directors |
| || || Obtained an understanding of key assumptions adopted by the Company in preparing the |
| ||challenges to the businesses of the Company. This required the Company to assess impact of COVID-19 on its operations. The Company has assessed the impact of COVID-19 on the future cash flow projections. The Company has also prepared a range of scenarios to estimate financing requirements. In view of the above we identified impact of COVID-19 on going concern as a key audit matter. ||forecasted statement of profit and loss and cash flow and assessed the consistency thereof with our expectations based on our understanding of the Company's business |
| || || Assessed the forecasted statement of profit and loss and cash flow by considering plausible changes to the key assumptions adopted by the Company. |
| || || Assessed impact of Government's announcement to lift the lockdown restrictions. |
| || ||Assessed disclosures made in the financial statements with regard to the above. Refer to note no. 33 |
The Company's Board of Directors is responsible for the other information. The otherinformation comprises of the Annual Report but does not include the standalone Ind ASfinancial statements and our auditor's report thereon. The other information is expectedto be made available to us after the date of this auditor's report.
Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether such other information is materially inconsistent withthe standalone Ind AS financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.
When we read such other information if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance and to comply with the relevant applicable requirements of the standard onauditing for auditor's responsibility in relation to other information in documentscontaining audited financial statements. We have nothing to report in this regard.
Responsibilities of Management for the Standalone Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Ind AS financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive loss cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error
In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone Ind AS financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order todesign 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 Companyhas adequate internal financial controls with reference to financial statements in placeand the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that amaterial uncertainty existswe are required to draw attention in our auditor's report to the related disclosuresin thefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Ind AS financial statements forthe financial year ended March 31 2020 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the " Annexure A " a statement on the mattersspecified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act we report that : -
i. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit.
ii. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
iii. The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Loss the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are inagreement with the books of account;
iv. In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Companies(Indian Accounting Standards)
Rules 2015 as amended;
v. On the basis of written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors aredisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (2) of the Act.
vi. With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone IND AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure B" to this report;
vii. In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid by the Company to its directors in accordance with the provisions of section 197read with Schedule V to the Act;
viii. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us : -
i. The Company does not have any pending litigation which would impact its financialposition.
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.
Mem. No.: 041898
"Annexure A" to the Independent Auditor's Report
Referred to in paragraph 1 under the heading 'Report on Other Legal & RegulatoryRequirement' of our report of
even date to the financial statements of the Company for the year ended 31stMarch 2020: -
1. In respect of Fixed Assets: -
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
b. The Fixed Assets have been physically verified by the management in a phasedperiodic manner which in our opinion is reasonable having regard to the size of thecompany and nature of its business. Pursuant to the program a portion of the fixed assethas been physically verified by the management during the year and no materialdiscrepancies between the books records and the physical fixed assets have been noticed.
c. The title deeds of immovable properties are held in the name of the company.
2. In respect of Inventory:-
a. The management has conducted the physical verification of inventory at reasonableintervals.
b. No discrepancies noticed on physical verification of the inventory as compared tobook records. The Company's inventory comprise only of shares and securities. TheManagement during the year has physically verified those stocks which were not indematerialize form and the rest were verified through Demat Statements of Depositories. Inour opinion the procedure of such verification was reasonable and adequate consideringthe size and nature of the business.
c. Company has maintained proper records of inventories. As explained to us there wasno material discrepancies noticed on physical verification of inventories as compared tothe book records.
3. In respect of Loan secured or unsecured granted by the Companies to companiesfirm or other related parties covered in the Register maintained under section 189 of theCompanies Act 2013.
a) The Company has granted loan to a Subsidiary &wholly owned subsidiary companies.The principal amount is repayable on demand at the discretion of the Company and norepayment schedule is stipulated.
b) In respect of the said loans and interest thereon there are no overdue amounts.
c) The terms of the said loan are not prejudicial to the interest of the Company.
4. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act2013 in respect of loans investments guarantees and security.
5. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 of the Act andthe Rules framed there under to the extent notified are not applicable to the Company.
6. As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the company.
7. Information and explanation given to us in respect of statutory dues : -
According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been regular indepositing undisputed statutory dues including Provident Fund Employees State InsuranceIncome-Tax Goods & Services Tax(GST) Duty of Customs Duty of Excise Value addedTax Cess and any other statutory dues with the appropriate authorities. According to theinformation and explanations given to us no undisputed amounts payable in respect of theabove were in arrears as at 31st March 2020 for a period of more than six months from thedate on when they become payable.
8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks. The Company has not taken anyloan either from financial institutions or from the government and has not issued anydebentures.
9. Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
10. Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
11. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;
12. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
13. In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
14. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.
15. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
16. In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.
Mem. No.: 041898
"Annexure B" to the Independent Auditor's Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
In conjunction with our audit of the Standalone financial statements of the Company asof and for the year ended 31st March 2020 we have audited the internal financial controlsover financial reporting of AJCON GLOBAL SERVICES LIMITED ("the Company") whichis a Company incorporated in India as of 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". 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 audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
3. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 override 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 become inadequate 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 March 31 2020 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.
Chartered Accountants FRN: 118424W
Mem. No.: 041898