To The Members of
CONART ENGINEERS LIMITED
I. Report on the Audit of the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of Conart EngineersLimited ("the Company") which comprise the Balance Sheet as at March 312022 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and notes to financial statement including a summary of the 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 Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2022 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on that date
2. Basis for Opinion
We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Standalone Financial Statements.
3. Key Audit Matters
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 period.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. We have determined the matters described below to bethe key audit matters to be communicated in our report:
|Revenue Recognition under IND AS 115: ||How our audit assessed the key matter |
|Revenue from contract with customers: || |
|Fixed price contracts || |
|The Company inter alia engages in Fixed-price contracts wherein revenue is recognized using the percentage of completion computed asper the input method based on the Company's estimate of contract costs (Refer Note 2(h) to the standalone financial statements) ||Our audit procedures on revenue recognized from item rate contracts includes: |
|We identified revenue recognition of item rate contracts as a Key Audit Matter since: ||? Obtained an understanding of the system processes and controls implemented by company for recording and computing revenue. |
|a. it pertains to the major activity of the company and the recognition of the revenue depends on third party certification based on the invoices raised and approved based on the survey. ||? With regards to information technology: |
|b. application of this standard is complex and it involves number of key judgements and estimates mainly in identifying performance obligation and recognition of revenue based on the stage of completion of the contract on certified invoices. || Assessed the IT environment which the business system operates in and tested the system controls over which the revenue is recognized; |
| || Tested IT controls over appropriateness of cost and revenue reports generated by the system; |
| || Tested controls pertaining to allocation of resources and budgeting systems which prevent unauthorized recording or changes to costs incurred and controls relating to the estimation of contract costs required to complete the respective projects |
4. Information Other than the Standalone Financial Statements and Auditor'sReport Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the Standalone Financial Statements and our auditor's report thereon. Our opinionon the standalone financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the standalone Financial Statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information; we are required to report that fact. We have nothing to report in thisregard.
5. 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 financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue 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. The Board of Directors are responsible for overseeingthe Company's financial reporting process.
6. Auditor's Responsibilities for the Audit of the Standalone FinancialStatements
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: i) Identify and assess therisks of material misstatement of the standalone financial statements whether due tofraud or error design and perform audit procedures responsive to those risks and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. Therisk of not detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control. ii) Obtain an understanding ofinternal financial controls relevant to the audit in order to design audit procedures thatare appropriate in the circumstances. Under section 143(3)(i) of the Act we are alsoresponsible for expressing our opinion on whether the Company has adequate internalfinancial controls with reference to financial statements in place and the operatingeffectiveness of such controls iii) Evaluate the appropriateness of accounting policiesused and the reasonableness of accounting estimates and related disclosures made bymanagement iv) Conclude on the appropriateness of management's use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Standalone Financial Statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern v) Evaluate the overallpresentation structure and content of the Standalone Financial Statements including thedisclosures and whether the Standalone Financial Statements represent the underlyingtransactions and events in a manner that achieves fair presentation Materiality is themagnitude of misstatements in the Standalone Financial Statements that individually or inaggregate makes it probable that the economic decisions of a reasonably knowledgeableuser of the Standalone Financial Statements may be influenced. We consider quantitativemateriality and qualitative factors in i) planning the scope of our audit work and inevaluating the results of our work; and ii) to evaluate the effect of any identifiedmisstatements in the Standalone Financial Statements.
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 Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication
II. Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit 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 ouropinion proper books of account as required by law have been kept by the Company so faras it appears from our examination of those books.
C. The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account D. In our opinion theaforesaid standalone financial statements comply with the Ind AS specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014 E. On the basis ofthe written representations received from the directors as on March 31 2022 taken onrecord by the Board of Directors none of the directors is disqualified as on March 312022 from being appointed as a director in terms of Section 164 (2) of the Act.
F. With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols with reference to financial statements.
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 opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe 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 has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements. ii) The company does not have anymaterial foreseeable losses on long-term contracts including derivative contracts as at 31stMarch 2022 iii) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2020 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
ANNEXURE A' TO THE AUDITORS' REPORT
The Annexure referred to in our report to the members of CONART ENGINEERS LIMITED forthe year ended 31st March 2022.
On the basis of the information and explanation given to us during the course of ouraudit we report that:
1. Property Plant and Equipment:
The company has maintained proper records showing full particulars includingquantitative details and situation of its Property Plant and Equipment.
The Company is maintaining proper records showing full particulars of intangibleassets.
As explained to us Property Plant and Equipment have been physically verified by themanagement at reasonable intervals; no material discrepancies were noticed on suchverification.
The title deeds of immovable properties are held in the name of the company.
The Company has not revalued its Property Plant and Equipment (Including right of Useassets) or intangible assets or both during the year.
No proceedings have been initiated or are pending against the Company for holding anyBenami Property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) andrules made there under.
As explained to us inventories have been physically verified during the year by themanagement at reasonable intervals. No material discrepancy of 10% or more in theaggregate for each class of inventory was noticed on physical verification of stocks bythe management as compared to book records.
During any point of time of the year the company has not been sanctioned any workingcapital limits from banks or financial institutions on the basis of security of currentassets.
3. Loans Guarantee and Advances given:
The company has granted loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013:
|Name of Entity ||Aggregate Amount ||Balance Outstanding At the Balance Sheet Date ||Nature of Transaction |
|Clue Realestate Marketing ||1105597 ||1108667 ||Loan to LLP where |
|Enterprises LLP || || ||Company is Partner |
a. The terms and conditions of the grant of such loans are not prejudicial to thecompany's interest;
b. The schedule of repayment of principal and payment of interest has been not beenstipulated and thus no comment is made on whether repayment or receipts are regular
c. Since there is no repayment schedule for repayment of principal or payment ofinterest we do not comment on this point as it is not possible to determine the same.
d. There is no amount overdue for more than 90 days.
e. There is no loan or advance in the nature of loan granted which has fallen dueduring the year which has been renewed or extended or fresh loan granted to settle theoverdue amount.
f. Since the loan has been granted without any terms and conditions the details are asunder
|Aggregate Amount Loan Granted ||% of the total ||Aggregate amount of Loan granted to Promoters related Parties |
|1105597 ||100% ||1105597 |
4. Loans Guarantee and Advances to Director of Company:
During the year the company has not provided any loans guarantees advances andsecurities to the director of the company and the company is compliant provisions ofsection 185 and 186 of the Companies Act 2013.
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 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
6. Maintenance of costing records:
As per information & explanation given by the management maintenance of costrecords has not been specified by the Central Government under sub-section (1) of section148 of the Companies Act 2013.
7. Deposit of statutory liabilities: a. The company is regular in depositingundisputed statutory dues including provident fund Employee's state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added tax cessand any other statutory dues to the appropriate authorities. b. Dues of income tax orsales tax or service tax or duty of customs or duty of excise or value added tax have beendeposited on time there is no dispute is pending on the part of company except for thedispute mentioned below
|Sr. No ||Year ||Type of Tax ||Authority against which disputed ||Amount in Dispute (Rs) |
|1. ||2012-2013 to 2014-2015 ||Service Tax ||CESTAT ||1078053 |
8. Surrendered or disclosed as income in the tax assessments:
The Company does not have any transactions to be recorded in the books of account thathas been surrendered or disclosed as income during the year in the tax assessments underthe Income Tax Act 1961 (43 of 1961).
9. Default in repayment of borrowings:
In our opinion and according to the information and explanations given by themanagement we are of the opinion that the Company does not have any dues to a financialinstitution bank Government or debenture holders.
10. Funds raised and utilisation:
Based on our audit procedures and according to the information given by the managementthe company has not raised any money by way of initial public offer or further publicoffer (including debt instruments) or taken any term loan during the year.
The company has not made any preferential allotment or private placement of shares orfully or partly convertible debentures during the year under review.
11. Fraud and whistle-blower complaints:
According to the information and explanations given to us we report that no fraud bythe company or any fraud on the Company by its officers or employees has been noticed orreported during the year.
No Report Under Sub section 12 of Section 143 of the Companies Act has been filed bythe Auditors in the form ADT-4 as prescribed under Rule 13 of the Companies (Audit andAuditors) Rules 2014 with the Central Government.
No Whistle-blower complaints has been received during the year by the Company.
12. Nidhi Company:
The company is not a Nidhi Company. Therefore clause (xii) of the order is notapplicable to the company.
13. Related Party Transactions:
According to the information and explanations given to us all transactions with therelated parties are in compliance with sections 177 and 188 of Companies Act 2013wherever applicable and the details have been disclosed in the Financial Statements etc.as required by the applicable accounting standards.
14. Internal Audit:
The company does have an internal audit system commensurate with the size and nature ofits business.
Reports of the Internal Auditors for the period under audit were considered by us.
15. Non Cash Transactions:
The company has not entered into non-cash transactions with directors or personsconnected with him.
16. Registration under RBI act:
The company is not required to be registered under section 45-IA of the Reserve Bank ofIndia Act 1934.
The Company has not conducted any Non-Banking Financial or Housing Finance activitieshence the said clause is not applicable
The Company is not a Core Investment Company as defined in the regulations made byReserve Bank of India. Hence clause "C' and clause "D" are not applicable
17. Cash Losses:
The company has not incurred cash losses in the financial year and in the immediatelypreceding financial year
18. Resignation of Statutory Auditors:
There has been no instance of any resignation of the statutory auditors occurred duringthe year.
19. Material uncertainty on meeting liabilities:
On the basis of financial Ratios Aging and expected dates of Realisation of financialassets and payment of financial liabilities other Information accompanying the financialstatements In our opinion No material uncertainty exists as on the date of the auditreport and that company is capable of meeting its liabilities existing at the date ofbalance sheet as and when they fall due within a period of 1 year from the balance sheetdate
20. Transfer to fund specified under Schedule VII of Companies Act 2013
The same is not applicable to the company
21. Qualifications or adverse auditor remark in other group companies
This Clause is not applicable to the company
Annexure - B to the Auditors' Report
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 CONARTENGINEERS LIMITED ("The Company") as of 31 March 2022 in conjunction withour audit of the 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 company's policies the safeguarding ofits 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.
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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide 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
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 2022 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 Shabbir & Rita Associates LLP |
| ||Chartered Accountants |
| ||FRN: 109420W |
|Place : Mumbai ||Rita S. Bagasrawala |
|Date : 30th May 2022 ||PARTNER |
| ||M. No.: 036976 |
| ||UDIN: 22036976AJWYTC8983 |