To the Members of METROGLOBAL LIMITED
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of MetroGlobal Limited("the Company") which comprise the balance sheet as at March 31 2021 and thestatement of profit and loss (including other comprehensive income) the statement ofchanges in equity and the statement of cash flows for the year then ended and notes tothe financial statements including a summary of significant accounting policies and otherexplanatory information. In our opinion and to the best of our information and accordingto the explanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (Act') in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India including Indian Accounting Standards (Ind AS') specified under Section133of the Act of the state of affairs of the Company as at March 31 2021 and its profit(including other comprehensive income) its cash flows and the changes in equity for theyear ended on that date.
Basis for opinion
We conducted our audit in accordance with the standards on auditing specified undersection 143 (10) of the Companies Act 2013. Our responsibilities under those standardsare
further described in the auditor's responsibilities for the audit of the financialstatements section of our report. We are independent of the Company in accordance with thecode of ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the code of ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
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. In our opinion and based on the information andexplanations given to us matters related to COVID-19 are fully described in the Emphasisof Matters paragraph of our report which implicates the uncertainties and the impact ofCOVID-19 pandemic on the Company's operations and results as assessed by the management.For details refer to Note 36 forming part of standalone financial statements as at March31 2021.
We have determined the other Key matters described below to be the key audit matters tobe communicated in our report.
|Key Audit matter ||How our audit addressed key Audit matter |
|a. Appropriation of Current / Non-current classification ||For the purpose of current / non-current classification of assets and liabilities the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of services and the time between acquisition of assets or inventories for processing and their realisation and cash and cash equivalents. |
| ||The classification of assets and liabilities has been done on the basis of documentary evidence. Where conclusive evidences are not available the classification has been done on the basis of management's best estimate of the period in which the assets would be realised or the liabilities would be settled. We have evaluated the responsibility of the management's estimates. |
|b. Impairment testing of Subsidiary Company & Associated ||Our key procedure included but not limited to followings: |
|Concern & their Ind AS conversion ||a. Our audit procedures included. Among others testing the Company's control surrounding the budgeting processes and the carrying value of investments. |
|As at March 31 2021 the adjusted carrying amount of the investment in Subsidiary Company viz METROCHEMCAPITAL TRUST LIMITED and other Associated Company's statements does not cover the other information like Ind AS conversion and we do not express any form of assurance conclusion thereon. In connection with our audit of the standalone financial statements our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If based on the work we have performed we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard. ||b. We also assessed whether the Company's disclosures about the sensitivity of the outcome of impairment assessment to changes to key assumptions reflect the risks inherent in the valuation of investment. |
| ||c. The subsidiary Company is non material and does not carry any material impact on standalone for the purpose of Ind AS conversion. |
|c. Valuation of investments and impairment thereof ||Our key procedures included but not limited to the following |
|Refer note 4 forming part of financial statements to the standalone financial statements. ||a) Assessed the appropriateness of the relevant accounting policies of the Company including those relating to recognition and measurement of financial instrument by comparing with the applicable accounting standards; |
|The Company's investment portfolio represents a significant portion of the Company's total assets which primarily consists of: ||b) For instrument valued at fair value: |
|i. Listed Company shares; ||i. Assessed the availability of quoted prices in liquid markets; |
|ii. Mutual funds and ||ii. Assessed whether the valuation process is appropriately designed and captures relevant valuation inputs; |
|The aforementioned instruments are valued at fair value through other compressive income (FVTOCI) depending upon the requirements of Ind AS 109 Financial Instruments as summarised below: ||iii. Performed testing of the inputs/assumptions used in the valuation; and |
|This is considered to be a significant area in view of the materiality of amounts involved judgments involved in determining of impairment/ recoverability of instruments measured at fair market value which includes assessment of market data/conditions and financial indicators of the investee the available trading yield of relevant instruments and impact of the COVID-19 outbreak on the assumptions considered for such fair valuation. ||iv. Assessed pricing model methodologies and assumptions against industry practice recent changes in economic environment and valuation guidelines |
| ||c) Assessed the appropriateness of the Company's description of the accounting policies and disclosures related to investments and whether these are adequately presented in the standalone financial statements. |
Emphasis of Matter
As more specifically explained in Note 36 to the financial statements the Company hasmade a detailed assessment of its liquidity position for the next year and therecoverability and carrying value of its assets comprising property plant and equipmentinvestments inventory and trade receivables as at the balance sheet date and hasconcluded that there are no material adjustments required in the Financial Statements. Thesituation is changing rapidly giving rise to inherent uncertainty around the extent andtiming of the potential future impact of the COVID-19 pandemic which may be different fromthat estimated as at the date of approval of the financial results. The Company willcontinue to closely monitor any material changes arising of future economic conditions andimpact on its business.
Our opinion is not modified in respect of this matter.
Information other than the financial statements and auditors' report 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 financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express 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 based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Management's responsibility for the financial statements
The Company's board of directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give atrue and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe
Indian Accounting Standards (Ind AS) prescribed under section133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015 and Companies (Indian AccountingStandards) Rules 2016 as amended from time to time and other accounting principlesgenerally accepted in India.
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 statement that give a true and fair view and are free from materialmisstatement 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.
The board of directors are also responsible for overseeing the Company's financialreporting process.
Auditor's 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 auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud 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 scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error
design and perform audit procedures responsive to those risks and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The riskof 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.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness 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 existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in
(i) Planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the 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
any significant 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 withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor's 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
As required by the Companies (Auditor's Report) Order 2016("the Order")issued by the Central Government of India inters of sub-section (11) of section 143 of theCompanies Act 2013 we give in Annexure "A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.
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) I n our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
(c) The balance sheet the statement of profit and loss the statement of changes inequity and the cash flow statement dealt with by this report are in agreement with thebooks of account;
(d) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards (Ind AS') specified under section 133 of the Act read withrule 7 of the Companies (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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting;
(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 ouropinion and to the best of our information and according to the explanations given to usthe remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act; and
(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 in our
opinion and to the best of our information and according to the explanations given tous;
(a) Except disputed tax liabilities mentioned in paragraph 7 CARO 2016 the Companydoes not have any pending litigations which would impact its financial position;
(b) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and
(c) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
(Referred to paragraph under Report on other legal and regulatory requirements'section of the Independent Auditors'
Report of even date to the members of MetroGlobal Limited on the standalone IND ASfinancial statements for the year ended
March 31 2021)
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the
Company and taking into consideration the information and explanations given to us andthe books of account and other
records examined by us in the normal course of audit and to the best of our knowledgeand belief we report that:
1. In respect of the Company's fixed assets: (Property Plant & Equipment andIntangible assets):
(a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets are physically verified by the Management during the year andthere is regular programme of verification which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets and no materialdiscrepancies have been noticed on such verification.
(c) I mmovable properties owned by the Company of land & buildings & otherproperties whose title deeds have been pledged with banks as security for term loans areheld in the name of Company. In respect of immovable properties that have been taken onlease and disclosed under the head property plant and equipment in the standalonefinancial statements the lease agreements are in the name of the Company where theCompany is the lessee as per the lease agreement.
2. The inventory has been physically verified by the management during the year. In ouropinion the frequency of such verification is reasonable. According to the informationand explanations given to us and as examined by us no material discrepancies were noticedon such verification.
3. According to information and explanation given to us the company has grantedunsecured loans to companies firms limited liability partnerships or other partiescovered in the register required under section 189 of the Companies Act 2013.
a. I n our opinion the rate of interest and other terms and conditions of such loansare not prima facie prejudicial to the interest of the company.
b. I n respect of the aforesaid loans the parties are repaying the principal amountsas stipulated and are also regular in payment of interest where applicable.
c. I n respect of the aforesaid loans in the cases where the overdue amount is morethan ninety days in our opinion reasonable steps have been taken by the company for therecovery of the principal amounts and interest where applicable.
4. In our opinion and according to information and explanation given to us in respectof loans investments guarantees and security the Company has complied with theprovisions of sections 185 and section 186 of the Companies Act 2013.
5. In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits and accordingly paragraph 3 (v) of the order is notapplicable.
6. Pursuant to Section 148 of the Companies Act 2013 read with Rule 8 of the Companies(Accounts) Rule 2014 the Company does not have any manufacturing facility and hencethe Cost Audit is not applicable to the Company.
7. In respect of statutory dues:
(a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income-tax sales- tax service tax goods and service tax duty of customsduty of excise value added tax cess and other material statutory dues have beengenerally regularly deposited during the year by the company with the appropriateauthorities.
7. (b) According to the information and explanations given to us no undisputed amountspayable in respect of provident
fund employees' state insurance income-tax sales- tax service tax goods andservice tax duty of customs duty of excise value added tax cess and other materialstatutory dues were in arrears as at March 31 2021 for a period of more than six monthsfrom the date they became payable
(c) According to the information and explanations given to us and the records of thecompany examined by us there are no dues of income-tax sales- tax service tax goodsand service tax duty of customs duty of excise and value added tax which have not beendeposited on account of any dispute except followings;
|Statute ||Nature of Dues ||Amount (Rs. In Lacs) ||Period to which the amount relates ||Forum where the dispute is pending |
|Income tax ||Income Tax and Interest thereon ||3.67 ||AY 2007-08 ||Income Tax Tribunal |
|Income tax ||Income Tax and Interest thereon ||169.62 ||AY 2010-11 ||Commissioner of Income Tax Appeal |
|Income tax ||Income Tax ||4.36 ||AY 2016-17 ||Commissioner of Income Tax Appeal |
|Income tax ||Fringe Benefit Tax ||0.33 ||AY 2009-10 ||Income Tax Tribunal |
|Custom Dufi) ||Interest ||576.76 ||AY 1997-98 ||High Court |
8. In our opinion and according to the information and explanations given to us thecompany has not defaulted in repayment of dues to banks or financial institutions orgovernment during the year. The Company has not issued any debenture.
9. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) and has not taken any term loans during theyear. Accordingly paragraph 3 (ix) of the order is not applicable.
10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no material fraud on the Company by its officersor employees has been noticed or reported during the year.
11. In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
12. The Company is not a Nidhi Company and accordingly paragraph 3 (xii) of the orderis not applicable to the Company.
13. According to the information and explanations given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with section 177 and 188 of the Act. Where applicable the details of suchtransactions have been disclosed in the standalone Ind AS financial statements as requiredby the applicable accounting standards.
14. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the order is not applicable.
15. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph3(xv) ofthe order is not applicable.
16. According to the information and explanations given to us and based on ourexamination of the records of the company the company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.
(Referred to in paragraph 2 (f) under Report on other legal and regulatoryrequirements' section of our report to the Members of MetroGlobal Limited of even date)
Report on the internal financial controls over financial reporting under clause (i) ofsubsection 3 of section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of MetroGlobalLimited ("the Company") as at March 31 2021 in conjunction with our audit ofthe financial statements of the Company for the year ended on that date.
Management's responsibility for internal financial controls
The board of directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls over thefinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the standards on auditing prescribed under Section 143 (10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. 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 was 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 auditor's judgement including the assessment of the risks ofmaterial misstatement in 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 control 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 (i) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (ii) 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 (iii) 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.
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 of 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 and according to the information and explanations are given to us theCompany has in all material respects an adequate internal financial control system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2021 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.
| ||For KPSJ&ASSOCIATES LLP |
| ||(Chartered Accountants) |
| ||FRN: 124845W/W100209 |
| ||Prakash Parakh |
| ||Partner |
|Place: Ahmedabad ||M.NO: 039946 |
|Date: June 21 2021 ||UDIN: 21039946AAAALE8203 |