To the Members of Palred Technologies Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Palred TechnologiesLimited ("the Company") which comprise the standalone balance sheet as at March31 2021 the standalone statement of Profit and Loss (including other comprehensiveincome) thestandalone statement of changes in equity and the standalone statement of CashFlows for the year then ended and notes tothe standalonefinancial statements including asummary of significant (herein after referred to as the "standalone financialstatements").
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 sorequired and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amended("IND AS") and other accounting principles generally acceptedin India of thestate of affairs of the Company as at March 31 2021 theloss including othercomprehensive income changes in equityand its cash flows for the year ended on that date.
We conducted our audit in accordance with the standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's responsibilities for the Audit of the standalone 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 (ICAI) togetherwith the ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.
Emphasis of matter
As disclosed in Note no. 32 to the standalone financial statements the management hasmade an assessment of the impact of COVID-19 on the Company's operations financialperformance and position as at and for the year ended March 312021 and has concluded thatno there is no impact which is required to be recognised in the financial statements.Accordingly no adjustments have been made to the financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgement 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.
|S. No. Key audit Matters (Risk) ||How Was the Key Audit Matter Addressed in the Audit |
|1. Valuation of Investments in Equity Shares of Subsidiaries ||Our audit procedures in respect of this area included: |
|Refer to the disclosures related to Investments in Note 5 of the standalone financial statements for the year ending March 31 2021. ||1. Obtained an understanding and assessed management's process and controls with respect to determining valuation of investments. |
|The company has made investments in equity shares of its subsidiary companies amounting to Rs. 565800000/-. Such investments are accounted for at cost in accordance with Ind AS 27 Separate Financial Statements. Subsequently the company impaired its investment in subsidiaries by Rs. 477723100 in financial year 2018-19 and invested Rs. 40000000 in financial year2019-20.assesses the recoverable amount of the investment when impairment indicators exist by comparing the fair value (less costs of disposal) and carrying amount of the investment as on the reporting date. The investments are tested for impairment on account of continuous losses incurred by the subsidiary entity. The process for measuring and recognizing impairment loss is complex and requires management judgement. The key assumptions underpinning management's assessment of valuation include but are not limited to projections of recoverable amounts of recognized assets and liabilities revenue projections and market valuation of the company. The recovery of investments of the company depends on subsidiaries establishing profitable business in future. ||2. Evaluated and tested the design and TheCompany the operating effectiveness of the key controls in relation to valuation. |
|Based on the above impairment testing the management has provided for impairment of the carrying value of the investment in Palred Technologies Services Private Limited for Rs. Rs. 47514438. ||3. Verifiedthe assumptions & arithmetical accuracy for the value per share of the subsidiaries in which investment is made by the company. |
|Considering the materiality complexity and significance of judgement involved the valuation of aforesaid investments has been considered to be a key audit matter for current year's audit. ||4. Compared the pro rata share of net assets of each of the subsidiaries to the investment held by the Company and market value of the company to the consolidated net worth. |
| ||5. Evaluated the appropriateness of the disclosures made in the financial statement in relation to such investments as required by applicable accounting standards. |
Information other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual reportbut does not includethe standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion there on.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting 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 anddetectingfrauds 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 thatwereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalonefinancial statementthat misstatement whether due to fraud or error.
In preparing the standalonefinancial statements the Board of Directors is responsiblefor assessing the Company's abilityto continue as a going concern disclosing asapplicable matters related to going concern and usingthe going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company ortocease operationsor has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's fi nancialreportingprocess.
Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefimisstatement whether due to fraud or error and to issue an auditor's reportthat includesour opinion. Reasonable assurance is a high level of assurance but is not a guarantee thatan audit conducted in accordance with SAs will always detect a material misstatement whenit exists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalonefinancial statements.
We give in "Annexure A" a detailed description of Auditor's responsibilitiesfor Audit of the StandaloneFinancial Statements.
Report on Other Legal and Regulatory Requirements
1. 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 ofthe Act we givein the "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
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 ouropinion proper books of account as required by law have been kept by the Company so faras it appears from our examination of those books;
(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in
Equity and the Statement of Cash Flow dealt with by this Report are in agreement withthe books of account;
(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards
Section 133 of the Act;
(e) On the basis of the written representations received from the directors as on March312021 taken on record by the Board of
Directors none of the directors is disqualified as on 31st March 2021 from beingappointed as a director in terms of Section
164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure C"; and (g) With respect tothe other matters to be included in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us: i. The Company has disclosedthe impact of pending litigations on its financial position inits Refer Note 29 to thestandalonefinancial statements; ii. TheCompany did nothave any long-term contractsincluding derivative contracts for which there were anymaterial foreseeable losses; andiii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
3. As required by The Companies (Amendment) Act 2017 in our opinion according toinformation explanations given to us the remuneration paid by the Company to itsdirectors is within the limits prescribed under Section 197 of the Act and the rulesthereunder.
Annexure - A to the Independent Auditor's Report on even date on the StandaloneFinancial Statements of Palred Technologies Limited
Auditor's Responsibilities for the Audit of the Standalone 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 standalone 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 todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasinternal financial controls with reference to financial statements 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
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 in the audit of the standalone financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation procedures public disclosure about the matter orwhen 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 benefi ts of such communication.
Annexure - B to the Independent Auditor's Report of even date on the StandaloneFinancial Statements of Palred Technologies Limited for the Year Ended 31st March 2021
[Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report]
(a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets
(Property Plant and Equipment).
(b) Fixed assets (Property Plant and Equipment) have been physically verified by themanagement during the year and no material discrepancies were identified on suchverification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
ii. The Company is involved in the business of rendering services. Accordinglythe provisions stated in paragraph 3(ii) of the Order are not applicable to the Company.
iii. The Company has not granted any loans secured or unsecured to CompaniesFirms Limited Liability Partnerships (LLP) or other parties covered in the registermaintained under section 189 of the Companies Act 2013 (the Act'). Accordingly theprovisions stated in paragraph 3 (iii) (a) to (c) of the Order are not applicable to theCompany.
iv. In our opinion and according to the information and explanations given tous the Company has complied with the provisions of section 186 of the Act in respect ofinvestments made. Further in our opinion the Company has not entered into any transactioncovered under Section 185 and Section 186 of the Act in respect of loans investmentsguarantees and security made.
v. In our opinion and according to the information and explanations given to usthe Company has not accepted any deposits from the public within the meaning of Sections73 74 75 and 76 of the Act and the rules framed there under. Accordingly the provisionsof clause 3(v) of the order are no applicable.
vi. The provisions of sub-section (1) of section 148 of the Act are not applicableto the Company as the Central Government of India has not specifiedthe maintenance of costrecords for any of the products of the Company. Accordingly the provisions stated inparagraph 3 (vi) of the Order are not applicable to the Company. vii.
(a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is regular in depositing undisputedstatutory dues with appropriate authorities including provident fund employees' stateinsurance income-tax goods and service tax cess and other statutory dues applicable toit.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-taxgoods andservice tax duty of customs cess and other statutory dues which were outstanding at theyear end for a period of more than six months from the date they became payable.
(c) According to the information and explanation given to us and examination of recordsof the Company the outstanding dues of income-tax goods and service tax customs dutycess and any other statutory dues on account of any dispute are as follows:
viii. The Company has no loans or borrowings payable to a financial institution ora bank or government and no dues payable to debenture holders during the year.Accordingly the provisions of clause 3(viii) of the Order are not applicable.
ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordingly theprovisions stated in paragraph 3 (ix) of the Order are not applicable to the Company.
x. During the course of our audit examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees.
xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the
Company has paid/ provided for managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to usthe Company is not a Nidhi Company. Accordingly the provisions stated in paragraph 3(xii)of the Order are not applicable to the Company.
xiii. 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 sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv. 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 preferential allotment or private placement of shares or fullyor partly convertible debentures during the year. Accordingly the provisions stated inparagraph 3 (xiv) of the Order are not applicable to the Company. \
xv. 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-cash transactions with directors or persons connectedwith him. Accordingly provisions stated in paragraph 3(xv) of the Order are notapplicable to the Company.
xvi. In our opinion the Company is not required to be registered under section 45IA of the Reserve Bank of India Act 1934 and accordingly the provisions stated inparagraph clause 3 (xvi) of the Order are not applicable to the Company.
Annexure - C to the Independent Auditor's Report on even date on the StandaloneFinancial Statements of Palred Technologies Limited
[Referred to in paragraph (g) under Report on Other Legal and RegulatoryRequirements' in the Independent 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 with reference to standalone financialstatements ofPalred Technologies Limited("the Company") as of March 31 2021 inconjunction with our audit of thestandalonefinancialstatements of the Company for the yearended 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 with reference to standalone financialstatements 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) (the"Guidance Note"). 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 of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingissued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial
Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whetherinternalfinancialcontrols with reference to standalone financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to standalonefinancial statements and their operatingeffectiveness. Our audit of internalfinancialcontrols with reference to standalonefinancial statements included obtaining an understanding of internal financial controlswith reference to standalone financial statements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thestandalone 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 withreference to standalone financialstatements.
Meaning of Internal Financial Controls with Reference to Standalone FinancialStatements
A Company's internal financial control with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A Company's internalfinancial control with reference to standalonefinancial statements includes those policiesand procedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflectthe transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterialeffectonthestandalonefinancial . statements
Inherent Limitations of Internal Financial Controlswith Reference to StandaloneFinancial Statements
Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an internal financialcontrolswith reference to standalone financial statements and such internal financialcontrols with reference to standalone financial statements were operating effectively asat March 31 2021 based on the internal control with reference to standalone financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note.
|For MSKA & Associates |
|Chartered Accountants |
|ICAI Firm Registration No. 105047W |
|Amit Kumar Agarwal |
|Membership No. 214198 |
|Place: Hyderabad |
|Date:June 26 2021 |