Blue Circle Services Ltd.
|BSE: 508939||Sector: Financials|
|NSE: N.A.||ISIN Code: INE526K01031|
|BSE 00:00 | 04 Jan||Blue Circle Services Ltd|
|NSE 05:30 | 01 Jan||Blue Circle Services Ltd|
|BSE: 508939||Sector: Financials|
|NSE: N.A.||ISIN Code: INE526K01031|
|BSE 00:00 | 04 Jan||Blue Circle Services Ltd|
|NSE 05:30 | 01 Jan||Blue Circle Services Ltd|
The Members of M/s. Blue Circle Services Limited
Report on the Audit of the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Blue CircleServices Limited (the Company') which comprise the Balance Sheet as at 31 March2020 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.
2. 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 Companies Act 2013 (the Act') in the manner so required and give a true andfair view inconformity with the accounting principles generally accepted in Indiaincluding Indian Accounting Standards (Ind AS') specified under Section 133 of theAct of the state of affairs (financial position) of the Company as at 31 March 2020 andits profit (financial performance including other comprehensive income) its cash flowsand the changes in equity for the year ended on that date..
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Key Audit Matters
4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
KEY AUDIT MATTER
1.2.3. Accuracy of recognition measurement presentation and disclosures of revenuesand other related balances in view of adoption of Ind AS 115 "Revenue from Contractswith Customers" (new revenue accounting standard)The application of the new revenueaccounting standard involves certain key judgments relating to identification of distinctperformance obligations determination of transaction price of the identified performanceobligations the appropriateness of the basis used to measure revenue recognized over aperiod. Additionally new revenue accounting standard contains disclosures which involvescollation of information in respect of disaggregated revenue and periods over which theremaining performance obligations will be satisfied Refer to Notes to the StandaloneFinancial Statements
Our audit approach was a combination of test of internal controls and substantiveprocedures which included the following:
Evaluated the design of internal controls relating to recording of efforts incurred andestimation of efforts required to complete the performance obligations.
Tested the access and application controls pertaining to time recording allocation andbudgeting systems which prevents unauthorized changes to recording of efforts incurred.
Selected a sample of contracts and through inspection of evidence of performance ofthese controls tested the operating effectiveness of the internal controls relating toefforts incurred and estimated.
Selected a sample of contracts and performed a retrospective review of efforts incurredwith estimated efforts to identify significant variations and verify whether thosevariations have been considered in estimating the remaining efforts to complete thecontract.
Reviewed a sample of contracts with unbilled revenues to identify possible delays inachieving milestones which require change in estimated efforts to complete the remainingperformance obligations.
Performed analytical procedures and test of details for reasonableness of incurred andestimated efforts.
EVALUATION OF UNCERTAIN TAX POSITIONS
The Company has material uncertain tax positions including matters under dispute whichinvolves significant judgment to determine the possible outcome of these disputes.
Refer Notes to the Standalone Financial Statements
Obtained details of completed tax assessments and demands for the year ended March 312020 from management. We involved our internal experts to challenge the management'sunderlying assumptions in estimating the tax provision and the possible outcome of thedisputes. Our internal experts also considered legal precedence and other rulings inevaluating management's position on these uncertain tax positions. Additionally weconsidered the effect of new information in respect of uncertain tax positions as at April1 2019 to evaluate whether any change was required to management's position on theseuncertainties.
Accuracy of revenues and onerous obligations in respect of fixed-price contractsinvolves critical estimates
Estimated effort is a critical estimate to determine revenues and liability for onerousobligations. This estimate has a high inherent uncertainty as it requires consideration ofprogress of the contract efforts incurred till date and efforts required to complete theremaining contract performance obligations.
Refer Notes to the Standalone Financial Statements
Our audit approach was a combination of test of internal controls and substantiveprocedures which included the following
Evaluated the design of internal controls relating to recording of effortsincurred and estimation of efforts required to complete the performance obligations.
Tested the access and application controls pertaining to time recordingallocation and budgeting systems which prevents unauthorised changes to recording ofefforts incurred.
Selected a sample of contracts and through inspection of evidence of performanceof these controls tested the operating effectiveness of the internal controls relating toefforts incurred and estimated.
Selected a sample of contracts and performed a retrospective review of effortsincurred with estimated efforts to identify significant variations and verify whetherthose variations have been considered in estimating the remaining efforts to complete thecontract.
Reviewed a sample of contracts with unbilled revenues to identify possibledelays in achieving milestones which require change in estimated efforts to complete theremaining performance obligations.
Performed analytical procedures and test of details for reasonableness ofincurred and estimated efforts.
Management's Responsibility for the Standalone Financial Statements
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 standalone financial statements that give a true and fair view of the financialposition financial performance (changes in equity)1 and cash flows of the Company inaccordance with2 the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error. In preparing the financial statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Boards of Directors are alsoresponsible for overseeing the Company's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
Report on Other Legal and Regulatory Requirements
As required by "the Companies (Auditor's Report) Order 2016 ("theOrder")" issued by the Central Government of India in terms of sub-section (11)of section 143 of the Act (hereinafter referred to as the "Order") and on thebasis of such checks of the books and records of the Company as we consider appropriateand according to the information and explanation given to us we give in the Annexure"A" a statement on the matters specified in the paragraph 3 and 4 of the Order.
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 bestof 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 theCompany so far as appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) The going concern matter described in sub-paragraph (b) under the Other Mattersparagraph above in our opinion may have an adverse effect on the functioning of theCompany.
f) On the basis of written representations received from the directors as on 31 March2020 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2020 from being appointed as a director in terms of Section 164(2) of theAct.
g) 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 "B" and;
h) 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 knowledge and belief and according to the information andexplanations given to us we report that :
i The Company has disclosed the impact of pending litigations if any on its financialposition in its financial statements; however there isn't any litigations pending againstthe name of the company so far as appeared from the records and has been told to us bythe management.
ii The Company has made provisions as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts; however no such losses are been foreseeable in near future by thecompany's management.
iii There are no requirements in transferring amounts to the Investor Education andProtection Fund by the Company.
ANNEXURE "A" TO INDEPENDENT AUDITORS' REPORT
Referred to in paragraph 9 of the Independent Auditors' Report of even date to themembers of Blue Circle Services Limited on the standalone financial statements for theyear ended March 31 2020
1) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
b) These fixed assets have been physically verified by the management at reasonableintervals; no material discrepancies were noticed on such verification the same have beenproperly dealt with in the books of account;
2) a) The management has conducted physical verification of inventory at reasonableintervals during the year.
b) The procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
c) The company is maintaining proper records of inventory and no material discrepancieswere noticed on physical verification.
3) The Company has not granted any loan to any body corporate covered in the registermaintained under section 189 of the Companies Act 2013 (the Act'). Thus paragraph3(iii) of the Order is not applicable to the Company.
4) In our opinion and according to the information and explanations given to us theprovisions of section 185 and 186 of the Companies Act 2013 does not apply to thecompany as the company is primarily engaged in the acquisition of securities and engagedin the business of financing of companies.
5) The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.
6) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.
7) a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues have been regularly deposited during theyear by the Company with the appropriate authorities.
b) According to the information and explanations given to us no disputed amountspayable in respect of provident fund income tax sales tax value added tax duty ofcustoms service tax cess and other material statutory dues were in arrears as at 31March 2019 for a period of more than six months from the date they became payable.
c) According to the information and explanations given to us the dues outstanding ofincome tax sales-tax service tax duty of customs duty of excise or value added taxwhich have not been deposited on account of any dispute are as follows:
d) The Company is not required to transfer any funds to the Investor Education andProtection Fund in accordance with the relevant provisions of the Companies Act.
8) The Company does not have any loans or borrowings from any financial institutionbanks government or debenture holders during the year. Accordingly paragraph 3(viii) ofthe Order is not applicable.
9) The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3 (ix) of the Order is not applicable.
10) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
11) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not paid/provided for anymanagerial remuneration during the year.
12) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
13) According to the information and explanations given to us and based on ourexamination of the records of the Company there is been no transactions with the relatedparties during the said period. Therefore this paragraph is not applicable in case of thecompany.
14) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
15) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
16) According to the information and explanations given to us we report that theCompany is not required to be registered itself under section 45-IA of the Reserve Bank ofIndia Act 1934.
ANNEXURE "B" TO INDEPENDENT AUDITORS' REPORT
Referred to in paragraph 10(g) of the Independent Auditors' Report of even date to themembers of M/s. Blue Circle Services Limited on the standalone financial statements forthe year ended March 31 2020. Report on the Internal Financial Controls under Clause (i)of Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls over financial reporting of M/s.Blue Circle Services Limited ("the Company") as of March 31 2020 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.
Management's Responsibility for Internal Financial Controls
2. 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 Act.
3. 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 deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
5. 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
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that a) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; b) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and c) provides reasonable assurance regardingprevention or timely detection of unauthorised 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
7. 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.
8. 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.