To the members of CES Limited
We have audited the financial statements of CES LIMITED ("the Company")which comprise the balance sheet as at 31stMarch 2019 and the statement of Profit andLoss for the year then ended and notes to the financial statements including a summaryof significant accounting policies and other explanatory information. In our opinion andto the best of our information and according to the explanations given to us theaforesaid financial statements give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2019and profit for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
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.
We have determined that there are no key audit matters to communicate in our report.
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 preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the accounting Standards specified undersection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
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 is 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 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 a material uncertainty exists;we are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report.
However future events or conditions may cause the Company to cease to continue as agoing 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.
Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period 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 the Companies (Auditor's Report) Order 2016 (the order')issued by the Cental Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the mattersspecified in the 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 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 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 on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (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 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.
For P C N & Associates
(Formerly known as Chandrababu Naidu & Co.)
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 2019 Under"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) Fixed assets have been physically verified by the management at regular intervals;as informed to us no material discrepancies were noticed on such verification. In ouropinion 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. The Company is a service company primarily rendering software services.Accordingly it does not hold any physical inventories. Thus this clause is notapplicable to the company.
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 31st March2019 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 tothe company.
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.)
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 ended31st march 2019.
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 2019 in conjunction with our audit of the Ind ASfinancial 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 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 the 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 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 onAuditing issued by ICAI and deemed to be prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting were established and maintained and if such controls operated effectively in allmaterial 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.
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 2019 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.
For P C N & Associates
(Formerly known as Chandrababu Naidu & Co.)