Report on the Indian Accounting Standards (Ind AS) Financial Statements
We have audited the accompanying financial statements of Modern Converters Limited.which comprise the Balance Sheet as at 31st March 2021 and the Statement of Profit andLoss (Including Other Comprehensive Income) and Cash Flow Statement and the statement ofChanges in Equity for the year ended and a summary of significant accounting policies andother explanatory information (hereinafter referred to as "Standalone Ind ASfinancial Statement").
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 inconformity with the Indian Accounting Standards prescribed undersection133 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 2021 the loss and totalcomprehensive income changes in equity and its cash flows forthe 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 provides 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.
There are no Key Audit Matters Reportable as per SA701 issued by ICAI.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible forthe 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 but doesnot include the financial statements and our auditor's report thereon. These reports areexpected to be made available to us afterthe date of our auditor's report.
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 identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
When we read the other information included in the above reports if we conclude thatthere is material misstatement therein we are required to communicate the matter to thosecharged with governance and determine the actions underthe applicable laws andregulations.
Management's Responsibility forthe Financial Statements
The Company's Board of Directors is responsible forthe matters stated in section 134(5)of the Act with respect to the preparation of these standalone financial statements thatgive 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 ofthe accounting recordsrelevantto the preparation and presentation ofthe standalone financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
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 butto 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 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 standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgmentandmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement ofthe 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 orthe override of internalcontrol.
Obtain an understanding of internal control relevantto the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(l)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company 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 ofthe 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 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 ofthe standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a mannerthat achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually 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 auditwork and in evaluating the results of our work; and (ii)to evaluate the effect of anyidentified 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 anysignificant deficiencies in internal control that we identify during ouraudit.
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.
Report on Other Legal and Regulatory Requirements
1. As required bythe Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of section 143(11) of the Act we givein "Annexure A" a statement on the matter specified in the paragraph 3 and 4ofthe Order.
2. As required underprovisions of section 143(3) ofthe CompaniesAct 2013 we reportthat:
a. We have obtained all the information and explanations which to the best of ourknowledge and belief where necessary forthe purposes of ouraudit;
b. In our opinion proper books of account as required by law have been kept by theCompany so far as appears from ourexamination ofthose books;
c. The Balance Sheet and Statement of Profit and Loss including Other ComprehensiveIncome Statement of Cash Flow and Statement of Changes of Equity dealt with this reportare in agreement with the books of account;
d. In our opinion the Balance Sheet and Statement of Profit and Loss comply with theaccounting standards referred to in section 133 of the Act read with relevant rule issuedthereunder.
e. On the basis of written representations received from the directors as on March 312020 taken on record bythe Board of Directors none ofthe directors is disqualified as onMarch 312021 from being appointed as a director in terms of section 164(2) ofthe Act.
f. With respect to the adequacy ofthe internal financial controls overfinancialreporting ofthe company and operating effectiveness of such controls referred to ourseparate report in "Annexure B".
g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements ofsection 197(16) oftheAct as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid bythe Company to its directors during the year is inaccordance with the provisions ofsection 197 oftheAct.
h. With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditor) Rules 2014 in our opinion and to thebest of our knowledge and belief and according to the information and explanations givento us:
(a) The Company has disclosed the impact of pending litigation on its financialposition in its standalone financial statement.
(b) The Company did not have any long-term and derivative contracts as at March312021.
(c) There has been no delay in transferring amounts required to be transferred theInvestor Education and Protection Fund by the Company during the year ended March 312021.
ANNEXURE "A" TO THE AUDITORS' REPORT
In terms of the information and explanations given to us and the books and recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe state as under:
(i) In respect of Its Property Plant & Equipment:
a) Based on our scrutiny of the Company's Book of Account and other records andaccording to the information and explanations received by us from the management we areof the opinion that the question of commenting on maintenance of proper records of fixedassets and physical verification of fixed assets does not arise since the company had nofixed assets as on 31st March 2021 norat any time during the financial year ended on 31stMarch 2021.
b) According to the information and explanations received by us as the company owns noimmovable properties the requirement on reporting whether title deeds is held in the nameofthe Company or not is notapplicable.
(ii) As explained to us the inventory has been physically verified at reasonableintervals during the year by the management. In our opinion the frequency of verificationis reasonable. The discrepancies noticed on verification between the physical stocks andthe book records were not material.
(iii) The company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 ofthe Companies Act 2013. Therefore the provisions ofClause 3 (iii)(a)(iii)(b) and (iii)(c) ofthe said order are notapplicable to the company.
(iv) In our opinion and according to the information and explanations given to us theCompany has not provided any loans and advances undersection 185 and 186 ofthe CompaniesAct 2013.
(v) The company has not accepted any deposits from the public within the meaning ofsections 73 to 76 or any relevant provisions ofthe 2013 act and the rules framed thereunderto the extent notified.
(vi) The Central government has not prescribed the maintenance of cost records by thecompany under section 148(1) ofthe companies Act 2013 for any of its products.
(vii) In respect of Statutory Dues:
a) The company is regular in depositing with appropriate authorities undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax Duty ofCustoms GST Cess and any other statutory dues applicable to it. According to theinformation and explanations given to us no undisputed amounts payable in respect ofincome tax sales tax customs duty excise duty and cess were in arrears as at 31.03.21for a period of more than six months from the date they became payable.
b) According to the information and explanations given to us there are no dues ofsales tax income tax custom duty wealth tax GST excise duty and cess which have notbeen deposited on account of any dispute.
(viii) Based on our audit procedures and according to the information and explanationsgiven to us we are ofthe opinion thatthe Company has not defaulted in repayment of loansor borrowing to financial institutions banks orGovernment. The company has not issued anydebentures as atthe balance sheet date.
(ix) There were no moneys raised by way of initial public offer or further public offer(including debt instruments). The Moneys raised byway of term loan were applied forthepurpose for which those are raised.
(x) During the course of our examination ofthe books and records of the companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of such cases by theManagement.
(xi) In our opinion and according to the information and explanations given to us theCompany is not a public company. Accordingly paragraph 3(xi) ofthe Order is notapplicable.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination ofthe records ofthe company transactions with the related parties are incompliance with sections 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the financial statements etc. as required by theapplicable accounting standards;
(xiv) According to the information and explanations given to us and based on ourexamination ofthe records ofthe company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review.
(xv) According to the information and explanations given to us and based on ourexamination ofthe records ofthe company the company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv)ofthe Order is not applicable.
(xvi) The company is not required to be registered under section 45-IAofthe ReserveBank of India Act 1934.
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 ModernConverters Limited ('the Company') as of 31st March 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 Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control overfinancial 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 (the'Guidance Note') issued bythe Institute of Chartered Accountants of India (the '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 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 overfinancial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing issued bythe ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
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 systemoverfinancial reporting.
Meaning of Internal Financial Controls over Financial Reporting
Acompany's internal financial control overfinancial reporting is a process designed toprovide 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions ofthe 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 ofthe company are being made only inaccordance with authorizations of management and directors ofthe company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 orthatthedegree of compliance with the policies orprocedures 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 31st March 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.
| ||ForGhosh & Ghosh Chartered Accountants |
| ||Sd /- |
| ||A.K. Ghosh |
| ||Partner |
| ||M.No. 052945 |
|Place: Kolkata ||FRN: 306020E |
|Date: 27/05/2021 ||UDIN: 21050488AAAAAJ4515 |