The Members of MUZALI ARTS LIMITED
(Formerly known as "Welcon International Limited")
Report on the audit of the financial statements
We have audited the accompanying financial statements of MUZALI ARTSLIMITED (Formerly known as "Welcon International Limited") ("theCompany") which comprise the balance sheet as at March 31 2021 and the Statementof Profit and Loss Statement of changes in Equity and statement of cash flows for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information. (hereinafter referred to asfinancial statement').
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby 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 of the state of affairs of the Company as at March 31 2021 its Loss changesin equity and cash flows for the year ended on that date.
Basis for opinion
We conducted our audit in accordance with the standards on auditingspecified under section 143 (10) of the Companies Act 2013. Our responsibilities underthose Standards are further described in the auditor's responsibilities for the auditof the financial 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 Act 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.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined that there are no key audit matters to communicate inour report.
Emphasis of Matter
Note No. 24 to financial statements indicates uncertainties associatedwith the COVID-19 pandemic and impact assessment made by the company. As mentioned in thesaid note the management has taken into account all the possible impacts known eventsarising from COVID-19 pandemic and the resultant lockdowns in the preparation of financialstatement. Based on the future economic conditions the actual impact may not be in linewith the current estimates as made by the company. However the Company will continue toclosely monitor changes in the future economic conditions and its impact on financialstatement.
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 otherinformation. The other information comprises the information included in the Annualreport but does not include the Financial Statements and our auditors' reportthereon. The chairman statement Directors' Report Management discussion andAnalysis Report (herein after referred to as other report) are expected to be madeavailable to us after the date of this auditor's report.
Our opinion on the Standalone Financial Statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statementsour responsibility is to read the other information and in doing so consider whethersuch other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the other report if we conclude that there is a materialmisstatement of this other information we are required to report to those charged withgovernance.
Management's responsibility for the financial statements
The Company's board of directors are responsible for the mattersstated in section 134 (5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theaccounting standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The board of directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's responsibilities for the audit of the financialstatements
Our objectives are to obtain reasonable assurance about whether thefinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism 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 responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.Obtain an understanding of internal control relevant to the audit in order to design auditprocedures 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 thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis 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 financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause theCompany to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
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 in terms of sub-section(11) of section 143 of the Companies Act 2013 we
give in the Annexure "A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;
(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;
(c) The balance sheet the statement of profit and loss in theStatement of Other Comprehensive Income the cash flow statement and Statement of Changesin Equity dealt with by this report are in agreement with the books of account;
(d) In our opinion the aforesaid financial statements comply with theaccounting standards specified under section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;
(e) On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the board of directors none of thedirectors is disqualified as on March 31 2021 from being appointed as a director in termsof Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company with reference to these Standalone FinancialStatements and the operating effectiveness of such controls refer to our separate Reportin "Annexure 2" to this report; and
(g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us;
a. The Company does not have any pending litigations which would impactits financial position;
b. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses; and
c. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company
Annexure - A to the Auditors' Report
The Annexure referred to in Independent Auditors' Report to themembers of MUZALI ARTS LIMITED (Formerly known as "Welcon InternationalLimited")) (the Company') on the financial statements for the yearended 31 March 2021 we report that:
(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) As explained to us fixed assets have been physically verified bythe management at reasonable intervals. No material discrepancies were noticed on suchverification.
(c) According to the information and explanations given to us by themanagement and on the basis of our examination of the records of the Company the companydoes not own any immovable property.
(ii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the inventories held by thecompany on the balance sheet date have been physically verified by the management atreasonable intervals during the year and no material discrepancies have been noticed.
(iii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not grantedany loans secured or unsecured to companies firms limited liability partnerships orother parties covered in the register maintained under Section 189 of the Act 2013.
(iv) In our opinion and according to the information and explanationsgiven to us the Company has not made any loans which require compliance of section 185and in respect of loans given the company has complied with the provisions of s.186 ofthe Act.
(v) The Company has not accepted any deposits from the public.
(vi) The Central Government has not prescribed the maintenance of costrecords under section 148(1) of the Act for any of the services rendered by the Company.
(vii) (a) According to the information and explanation given to usemployees state insurance sales-tax wealth tax duty of customs duty of excise are notapplicable to the company. The Company is regular in depositing undisputed statutory duesincluding income tax Goods and Service Tax and other statutory dues with the appropriateauthorities during the year except for profession tax provident fund and tax deductedunder the income tax.
According to the information and explanation given to us no undisputedamounts payable were in arrears as at 31st March 2021 for the period of more than sixmonths from the date they became payable except for profession tax Rs. 15400/-. TdsRs.43440/-
(b) According to the information and explanation given to us there nodues of income tax or sales-tax or duty of customs or duty of excise or value added taxwhich have not been deposited with the appropriate authorities on account of any dispute.
(viii) The Company does not have any loans or borrowings from anyfinancial institution banks government or debenture holders during the year.Accordingly paragraph 3(viii) of the Order is not applicable.
(viii) The Company did not raised any money by way of initial publicoffer or further public offer (including debt instruments) and term loans during the year.Accordingly paragraph 3 (ix) of the Order is not applicable.
(ix) According to the information and explanations given to us nofraud by the Company or on the Company by its officers or employees has been noticed orreported during the course of our audit.
(x) According to the information and explanations give to us theCompany has not paid and provided for any managerial remuneration. Hence requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act arenot required.
(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable.
(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has enteredtransactions during the period with the related parties as per the provisions of Section177 and 188 of the Act and wherever applicable the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
(xiv) According to the information and explanations give to us andbased on our examination of the records of the Company the Company has not made privateplacement of shares during the year. Accordingly paragraph 3(xiv) of the Order is notapplicable.
(xiv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.
(xv) The Company is not required to be registered under section 45 -IAof the Reserve Bank of India Act 1934.
Annexure - B to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of MUZALI ARTS LIMITED (Formerly known as "Welcon internationalLimited") ("the Company") as of 31 March 2021 in conjunction with ouraudit 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 andmaintaining internal financial controls 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(ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies 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 Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2021 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.