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CES Ltd.

BSE: 512341 Sector: IT
NSE: N.A. ISIN Code: INE396F01013
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CES Ltd. (CES) - Auditors Report

Company auditors report

To the members of CES Limited

Report on the Financial Statements

We have audited the accompanying Ind AS financial statements of M/s. CES Limited("the Company") which comprises the Balance Sheet as at 31stMarch 2018 Statement of Profit & Loss (Including other Comprehensive Income) 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. (Hereinafter referred to as "Ind AS Financial Statement")

Management's Responsibility for the 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 preparationand presentation of these Ind AS financial statements that give a true and fair view ofthe financial position financial performance (including the other comprehensive income)cash flows and Statement of Changes in Equity of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards specified under Section 133 of the Act read with Relevant Rules issued thereunder. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; 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 Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe Ind AS financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including Ind AS of the financialposition of the Company as at 31st March 2018 and its financial performance includingother comprehensive income it's cash flow and changes in the equity for the year ended onthat date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 (‘the order')issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inthe paragraph 3 and 4 of the order.

2. 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 thebest of 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 bythe Company so far as it appears from our examination of those books.

(c) The Balance Sheet Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of changes in Equity dealt with by thisReport are in agreement with the books of account;

(d) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Relevant Rulesissued there under.

(e) On the basis of the written representations received from the directors as on31st March 2018 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2018 from being appointed as adirector in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

(g) 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 litigations which would impact itsfinancial position.

ii. The Company did not have any long-term contracts including derivative contractsfor which 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.

For P C N & Associates

(Formerly known as Chandrababu Naidu & Co.)

Chartered Accountants

FRN: 016016S

Sd/-

M. Naveen

Partner

M.No:237316

Place: Hyderabad

Date: 30th May 2018

Annexure A to the Auditor's Report

Annexure referred to in paragraph 1 of Our Report of even date to the members of M/s.CES Limited on the accounts of the company for the year ended 31st March 2018Under "Report on other Legal & Regulatory Requirements"

i. (a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

(b) As explained to us fixed assets have been physically verified by the management atregular intervals; as informed to us no material discrepancies were noticed on suchverification. In our opinion the frequency of verification is reasonable.

(c) According to the information and explanations given to us and on the basis of ourexamination of records of the Company the title deeds of immovable properties are held inthe name of the Company.

ii. According to the information and explanations given to us and on the basis ofour examination of the records of the company inventories have been physically verified atreasonable intervals of time and no material discrepancies have been found.

iii. The Company has not granted any loans secured or unsecured to companiesfirms and Limited Liability partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013. Therefore the provisions ofClause 3(iii) (iii)(a) (iii)(b) and (iii)(c) of the said order are not applicable to thecompany.

iv. In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of section 185 and 186 of the Act withrespect to the loans and investments made.

v. In our opinion and according to the information and explanations given to usthe Company has not accepted any deposits within the meaning of section 73 to 76 or anyother relevant provisions of the Companies Act2013 and the rules framed there under.

vi. As informed to us the maintenance of Cost Records has not been specified bythe Central Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the company.

vii. (a) According to the information and explanations given to us and based on therecords of the company examined by us the company is regular in depositing the undisputedstatutory dues including Provident Fund Employees' State Insurance Income-tax Goodsand Services Tax Customs Duty and other material statutory dues as applicable.

(b) There are no undisputed amounts payable in respect of Provident Fund Employees'State Insurance and Income-tax other material statutory dues in arrears as at 31stMarch 2018 for a period of more than 6 months for the date they became payable.

(c) According to the information and explanations given to us and based on the recordsof the company examined by us there are no dues of Income Tax and any other majorstatutory dues which have not been deposited on account of any disputes.

viii. In our opinion and according to the information and explanations given tous the company has not defaulted in repayment of dues to banks or financial institutions.The company has not issued any debentures.

ix. According to the information and explanations given to us the Company has notraised moneys by way of initial public offer or further public offer including debtinstruments and term loans. Accordingly the provisions of clause 3(ix) of the order arenot applicable to the company.

x. During the course of examination of books of accounts and records of thecompany carried out in accordance with the generally accepted auditing practices in Indiaand according to information and explanations given to us we have neither come across anyinstance of material fraud on or by the company noticed or reported during the year norhave been informed of such cases by the management.

xi. According to information and explanation given to us and based on ourexamination of records of the company the Company has paid/provided for managerialremuneration in accordance with the provisions of section 197 read with schedule V to theAct.

xii. In our opinion and according to information and explanations given to us thecompany is not a Nidhi Company.

Therefore the provisions of clause 3(xii) of the order are not applicable to thecompany.

xiii. The Company has entered into transactions with related parties in compliancewith the provisions of section 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting standard (Ind AS) 24 related party disclosures specified under section 133 ofthe Act read with relevant rules issued there under.

xiv. The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures. Therefore the provisions of clause3(xiv) of the order are not applicable to the company.

xv. According to information and explanations given to us and to the best of ourknowledge and belief the company has not entered into any non-cash transactions withdirectors or persons connected with the directors. Therefore the provisions of clause3(xv) of the order are not applicable to the company.

xvi. The Company is not required to be registered under section 45-IA of TheReserve Bank of India Act 1934.

Accordingly the provisions of clause 3(xvi) of the order are not applicable to theCompany.

For P C N & Associates

(Formerly known as Chandrababu Naidu & Co.)

Chartered Accountants

FRN: 016016S

Sd/-

M. Naveen

Partner

M.No:237316

Place: Hyderabad

Date: 30th May 2018.

Annexure B to the Auditor's Report

"Annexure B" referred to in paragraph 2(f) under "Report on other legaland Regulatory Requirements" section of report on Ind AS financial statements of evendate to the members of CES Limited on the Ind AS financial statement for the year ended 31stmarch 2018.

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 (‘the Act')

We have audited the internal financial controls over financial reporting of CES Limited(‘the Company') as of 31st March 2018 in conjunction with our audit of theInd AS 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

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 deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols 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 auditors' judgment including the assessment of the risks ofmaterial misstatement of the Ind AS 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 including Indian Accounting Standards. A company's internalfinancial control over financial reporting includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorizations of the Management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.

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.

Opinion

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 2018 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 P C N & Associates

(Formerly known as Chandrababu Naidu & Co.)

Chartered Accountants

FRN: 016016S

Sd/-

M Naveen

Partner

M.No:237316

Place: Hyderabad

Date: 30th May 2018