TO THE MEMBERS OF CEINSYS TECH LIMITED
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of CEINSYS TECHLIMITEDfttie Company") which comprise the Balance sheet as at March 31 2020 andthe Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and notes tothe standalone financial statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "theStandalone Financial Statements").
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 trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 312020 and its profit including othercomprehensive income the changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the Standalone 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 on the Standalone Financial Statements.
Key Audit Matters (KAM)
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements of the current year.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
|Key Audit Matter ||How our audit addressed the key audit matter |
|1)Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of Ind AS 115 "Revenue from Contracts with Customers" ||Our audit approach included among other items: |
|Ind AS 115 requires certain key judgments relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue over a period. Additionally this accounting standard contains disclosures which involve information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. || Testing the design and operating effectiveness of the internal controls and substantive testing as follows: |
|Refer Note No. 2 a (xi) and 28 to the Standalone Financial Statements. ||-Evaluating the design of internal controls and its operating effectiveness relating to revenue recognition. |
| || Selecting a sample of contracts and performing the following procedures: |
| ||-Reading analyzing and identifying the distinct performance obligations in those contracts. |
| ||- Comparing the performance obligations with that identified and recorded by the Company. |
| ||-Considering the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and testing the basis for estimation of the variable consideration. |
| || Verifying the computation of unbilled revenue based on actual cost incurred from estimated total cost to the extent of estimated total value of the various ongoing projects. |
| || Verifying the completeness of disclosure in the standalone financial statements as per Ind AS 115. |
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the management discussion & analysis and director's reportincluded in the annual report but does not include the Standalone Financial Statements andour auditor's report thereon. The above information is expected to be made available to usafter the date of this auditor's report.
Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the StandaloneFinancial Statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
When we read the above other information if we conclude that there is materialmisstatement therein we are required to communicate the matter to those charged withgovernance.
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 Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view of the state of affairs (financial position) profit(financial performance including other comprehensive income) cash flows and the changesin equity of the Company in accordance with the accounting principles generally acceptedin India including Indian Accounting Standards ('Ind AS') prescribed under Section 133 ofthe Act read with relevant rules issued there under.
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 design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Financial Statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the Standalone 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 for overseeing the Company's financial reporting process.
Auditors' Responsibility for the audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial 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 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 StandaloneFinancial 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3) (i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting 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 ability ofthe Company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the Standalone Financial Statements or if such disclosures are inadequateto modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent 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 Standalone Financial Statementsfor the year ended March 31 2020 and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. 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 it appears from our examination of those books.
c. The Balance Sheet the Statement of Profit and Loss (Including other comprehensiveincome) the Statement of Changes in Equity and the Statement of Cash Flow dealt with bythis Report are in agreement with the books of account.
d. In our opinion the aforesaid Standalone Financial Statements comply with the Ind ASprescribed under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on March31 2020 and taken on record by the Board of Directors none of the directors isdisqualified as on March 312020 from being appointed as a director in terms of Section164 (2) of the Act.
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 be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company does not have any material pending litigations as at March 312020 whichwould impact its financial position;
ii. The Company lias made provisions as required under the applicable law or Ind ASfor material foreseeable losses if any on long term contracts including derivativecontracts;
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company;
2. As required by the Companies (Auditor's Report) Order 2016 ("CARO 2016")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of CARO2016.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 (f) under 'Report on Other Legal and RegulatoryRequirements' of our report of even date on Standalone Financial Statements of CEINSYSTECH LIMITED for the year ended March 31 2020)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ( "the Act")
We have audited the internal financial controls over financial reporting of CEINSYSTECH LIMITED ('the Company') as of March 31 2020 in conjunction with our audit of theStandalone 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 Reporting('the Guidance Note') Issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required underthe Act.
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 issued by the ICAI and the Standards of Auditing prescribed underSection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
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 judgement including the assessment of the risks ofmaterial misstatement of the Standalone Financial Statements whether due to fraud orerror.
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 Standalone 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 (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneFinancial Statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the StandaloneFinancial 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2020 based on the internal controlover financial reporting criteria established by the Company considering the essential'components of internal control stated in the Guidance Note issued by the ICAI.
AnnEXUre "B" TO INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date to the members of CEINSYS TECHLIMITED on the Standalone Financial Statements for the year ended March 31 2020)
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.
b. As explained to us the Company has physically verified certain assets inaccordance with a phased program of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such physical verification as compared with the availablerecords.
c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the original title deeds of immovableproperties as disclosed in Note no. 3 to the Standalone Financial Statements have beendeposited with the lenders we have been produced the photocopy of the title deeds ofthose immovable properties and based on such documents the title deeds are held in thename of the Company.
ii. As explained to us inventories have been physically verified by the managementduring the year and in our opinion the frequency of verification is reasonable havingregard to the size of the operations of the Company. No material discrepancies werenoticed on such physical verification as compared with the available records.
iii. In respect of loans secured or unsecured granted by the Company to companiesfirms Limited liability partnerships or other parties covered in the register maintainedunder section 189 of the Act:
a. The Company has granted unsecured loan to its wholly owned subsidiary. In ouropinion and according to the information and explanation given to us the terms andconditions on which the loan had been granted were not prima facie prejudicial to theinterest of the Company.
b. The schedule of repayment of principal and payment of interest are stipulated andthe receipts are regular.
c. As the repayment of loan is on demand and interest is not due for payment as onMarch 31 2020 so the question of overdue does not arise.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section185 and 186 of the Act in respect ofgrant of loans and making investments. The Company has not provided any guarantees orsecurity to the parties covered under section 185 and 186.
v. According to the information and explanations given to us the Company has notaccepted any deposits from the public. Therefore the provisions of paragraph 3 (v) of theCARO 2016 are not applicable to the Company.
vi. According to the information and explanations given to us the Central Governmenthas not prescribed the cost records to be maintained under sub-Section (1) of Section 148of the Act in respect of activities carried on by the Company. Therefore the provisions ofparagraph 3(vi) of the CARO 2016 are not applicable to the Company.
vii. According to the information and explanations given to us in respect of statutorydues:
a. The company has been generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income tax duty of customs goodsand service tax and any other material statutory dues as applicable with the appropriateauthorities during the year. According to the information and explanations given to us noundisputed amounts payable in respect of such statutory dues were outstanding as at March31 2020 for a period of more than six months from the date they became payable.
b. There are no dues of Income tax duty of customs and goods and service tax whichhave not been deposited on account of any dispute.
viii. Based on our audit procedures and according to the information and explanationsgiven by the management we are of the opinion that as on March 31 2020 the Company hasnot defaulted in repayment of dues to banks. The Company does not have any borrowings fromfinancial institutions government and debenture holders.
ix. According to the information and explanations given to us during the year theCompany has not raised any money by way of initial public offer or further public offer(including debt instruments). The term loans raised by the Company have prima facie beenapplied for the purpose for which they are raised.
x. Based on our audit procedures performed for the purpose of reporting the true andfair view of the Standalone Financial Statements and on the basis of information andexplanations given by the management no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.
xi. In our opinion and according to the information and explanations given to us theCompany has paid / provided for managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. ln our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Therefore the provisions of paragraph 3 (xii) of the CARO2016 are not applicable to the Company.
xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Standalone Financial Statements etc. as requiredby the applicable accounting standards.
xiv. During the year under review the Company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures. Therefore theprovisions of paragraph 3 (xiv) of the CARO 2016 are not applicable to the Company.
xv. According to the information and explanations given to us the
Company has not entered into non-cash transactions with directors or persons connectedwith him covered within the meaning of Section 192 of the Act. Therefore the provisionsof paragraph 3 (xv) of the CARO 2016 are not applicable to the Company.
xvi. In our opinion and according to information and explanations provided to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934. Therefore the provisions of paragraph 3 (xvi) of the CARO 2016 are notapplicable to the Company.