To the Members of Dynacons Systems & Solutions Limited
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of Dynacons Systems &Solutions Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2021 the Statement of Profit and Loss Statement of Changes in Equity andStatement of Cash Flows for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information.
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 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2021 and its profit Changes in Equity and itsCash Flows 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 Auditors Responsibilities for the Audit ofthe Financial Statements of our report. We are independent of the Company in accordancewith the Code of Ethics issued by the Institute of Chartered Accountants of India togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Companies Act 2013 and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Emphasis of Matters
1. Attention is drawn to Note No. 31.11 forming part of standalone financialstatements which describes that the extent to which the COVID-19 Pandemic will impact theCompanys results in next financial year will depend on future developments whichare highly uncertain.
2. The Opinion expressed in the present report is based on the information fact andinputs made available to us through electronic means by the company. We wish to highlightthat due to the COVID-19 induced restrictions on physical movement and strict timelinesthe entire audit team could not visit the office of the Company for undertaking therequired audit procedures as prescribed under ICAI issued Standards on Auditing includingbut not limited to:
Inspection Observation examination and verification of the original documents ofinvoices legal agreements bank accounts Statement / loan accounts statement and files.
Participation in the year end activity of physical verification of Cash Inventoriesand Property Plant and Equipment carried on by the management as on March 31 2021however we have performed alternate audit procedures / reconciliation of such items toobtain sufficient appropriate audit evidence about existence of Cash Inventories andProperty Plant and Equipment as at the year end.
Any other process which required physical presence of the audit team.
Our opinion is not modified in respect of these matters.
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.
A) Revenue for the Company consists primarily of sale of goods recognized and provisionof services as per the accounting policy described in Note 2.2 forming part to theaccompanying standalone financial statements. Refer Note No. 24 forming part of financialstatements for details of revenue recognized during the year.
The Company recognizes revenue from sale of goods when it satisfies its performanceobligation in accordance with the principles of Ind AS 115 Revenue from Contracts withCustomers adopted by the Company from the current year by transferring the control ofgoods to its customers through delivery evidenced by acknowledgement of receipt of goodsby such customers. Considering the large volume of revenue transactions near period endthere may be a risk of revenue recognition occurring before the satisfaction of theperformance obligations by the company in accordance with the applicable Incoterms. UnderStandards on Auditing 240 The auditors responsibilities relating to fraud inan audit of financial statements there is a presumed risk that revenue may bemisstated owing to the improper recognition of revenue.
Considering the above factors revenue recognition (cut-off) was identified as a keyaudit matter for the current year audit.
Our audit work included but was not limited to the following procedures:
- Obtained an understanding of the revenue and receivable business process andassessed the appropriateness of the accounting policy adopted by the company for revenuerecognition.
- Evaluated design and implementation of the key controls around revenue recognitionincluding controls around contract approvals invoice verification transporterconfirmations and customer acknowledgements.
- Tested operating effectiveness of the above identified key controls over revenuerecognition near period end.
- For samples selected from revenue recorded during specific period before and afteryear end:
Verified the customer contracts for delivery terms verified the customeracknowledgements to evidence proof of delivery for domestic sales at or near period end.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
The Companys Board of Directors is responsible for the matters stated in section134(5) with respect to preparation of standalone financial statements that give a true andfair view of the financial position financial performance changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the accounting Standards specified under section 133 of the Act.
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 financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements the Board of Directors is responsible forassessing the Companys ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Companysfinancial reporting process.
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information. Theother information comprises the information included in the Boards report but doesnot include the Secretarial Audit report Standalone financial statements and ourauditors report thereon. The Boards report is expected to be made available tous after the date of this auditors report.
Our opinion on the standalone financial statements does not cover the other informationand we will not express any form of assurance or 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.
Auditors Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 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 managements use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on theCompanys ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required 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 auditors report. However future events or conditionsmay cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieve fair presentation.
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 financial statements of thecurrent period and are therefore the key audit matters.
We describe these matters in our auditors report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.
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 bythe Company so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss changes in equity and the CashFlow Statement dealt with by this Report are in agreement with the books of account
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164(2) of theAct.
(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 B".
(g) With respect to other matters to be included in the Auditors 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 has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note No.31.6 forming part of the financialstatements.
ii. The Company has long term contracts as at March 31 2021 for which there are nomaterial foreseeable losses. The Company does not have derivative contracts as at March31 2021.
iii. There was no amount required to be transferred to the Investor Education andProtection Fund by the Company during the year ended March 31 2021.
For M S P & CO.
Firm Registration No. 107565W
M. S. Parikh Partner
Membership No.: 08684
June 30 2021
"Annexure A" forming part of Independent Auditors Report
The Annexure referred to in our Independent Auditors Report of even date to themembers of the Company on the standalone Ind AS financial statements for the year endedMarch 31 2021 we report that:
On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:
I) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The company has a program of verification to cover all items of fixed assets in thephased manner which in our opinion is reasonable having regard to the size of thecompany and the nature of its assets. Pursuant to the program certain fixed Assets werephysically verified by the management during the year. According to the information andexplanation given to us no material discrepancies were noticed on such verification.
(c) The title deed of immovable property is held in the name of the Company.
ii) Physical verification of inventories has been conducted at reasonable intervals bythe management. The Company is generally maintaining proper records of inventory and nomaterial discrepancies were noticed on physical verification between physical stock andthe books records.
iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained u/s 189of the Act; hence the Clause (iii) of paragraph 3 of the Order are not applicable to theCompany.
iv) The Company has not granted any loans or made any investment or given loans orguarantees or securities to the parties or other parties covered under the provision ofsection 185 and 186 of the act hence the Clause (iv) of paragraph 3 of the Order is notapplicable to the Company.
v) The Company has not accepted any deposit during the year and does not have anyunclaimed deposits as at March 31 2021 and therefore the clause (v) of paragraph 3 ofthe Order is not applicable to the company.
vi) The Central Government has not prescribed the maintenance of cost records undersubsection (1) of section 148 of the Act for any of the activities of the Company; hencethe Clause (vi) of paragraph 3 of the Order 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 GST Custom and Exciseduty and other statutory dues with the appropriate authorities.
b) According to information and explanation given to us there are no disputedstatutory dues including Provident Fund Employees State Insurance Income Tax GSTCustom and Excise duty and other statutory dues which have not been deposited on accountof dispute except as stated below :-
|Particulars ||Period to which amount relates ||Forum where the dispute is pending ||Amount in Lakhs |
|Income Tax ||AY 2017-18 ||CIT Appeals ||6.86 |
viii) In our opinion and according to the information and explanation given to us thecompany has not defaulted in the repayment of dues to banks or Non Banking FinancialCompanies. The Company does not have any loans or borrowings from the government or hasnot issued any debenture.
ix) Based upon the audit procedures performed and according to the information andexplanations given to us the company has not raised money by way of initial public offeror further public offer (including debt instruments) and amount raised through term loansduring the year were applied for the purpose for which those are raised.
x) To the best of our knowledge and belief and according to the information andexplanations given to us and considering the size and nature of the Companysoperations no fraud by the company or no material fraud of Company have been noticed orreported during the year and nor have we been informed of such case by the management.
xi) According to the information and explanation given to us and based on ourexamination of the records the Company has paid for managerial remuneration in accordancewith the requisite approvals mandated by the provisions of section 197 read with ScheduleV of the Act.
xii) In our opinion and according to the information and explanation given to us theCompany is not a Nidhi Company; hence Clause (xii) of paragraph 3 of the Order is notapplicable.
xiii) According to the information and explanations given to us and based on ourexamination of records of the Company transactions with the related parties are incompliance with section 177 and 188 of the Act where applicable and the details of suchtransactions have been disclosed in the standalone Ind AS financial statements as requiredby the applicable accounting standards.
xiv) Based upon the audit procedures performed and according to the information andexplanations given by the management the company has made preferential allotment ofshares during the year and the requirement of section 42 of the Companies Act 2013 havebeen complied with and the amount raised have been used for the purposes for which thefunds are raised. The Company has not made private placement of shares or fully paid orpartly convertible debentures during the year under review.
xv) According to the information and explanations given to us and based on ourexamination of records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with to its Directors; hence the clause(xv) of paragraph 3 of the Order is not applicable and hence not commented upon.
xvi) In our opinion and according to the information and explanations given to us thecompany is not required to be registered under section 45 IA of Reserve Bank of India Act1934 and hence provision of clause 3(xvi) of the order are not applicable to the companyand hence not commented upon.
For M S P & CO.
Firm Registration No. 107565W
M. S. Parikh Partner
Membership No.: 08684
June 30 2021
"Annexure B" forming part of Independent Auditors Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act 2013 ("the Act").
We have audited the internal financial controls over financial reporting of DynaconsSystems & Solutions Limited ("the Company") as of March 31 2021 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Managements Responsibility for Internal Financial Controls
The Companys 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to companys policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the 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 auditors judgement 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 Companys internal financial controlssystem over 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 financial reporting includes those policiesand procedures that:
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company s assets that could have amaterial 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 to the best of our information and according to explanation given tous 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 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
For M S P & CO.
Firm Registration No. 107565W
M. S. Parikh Partner
Membership No.: 08684
June 30 2021