TO THE MEMBERS OF SWORD-EDGE COMMERCIALS LIMITED
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of SWORD-EDGECOMMERCIALS LIMITED ("the Company") which comprise the Balance Sheet as atMarch 31 2020 the statement of profit and loss (including other comprehensive income)the statement of changes in Equity and the statement of cash flows for the year thenended and notes to the financial statements including a summary of the significantaccounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ( "Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India including Indian Accounting Standards (Ind AS')specified under Section 133 of the Act of the state of affairs of the Company as at 31stMarch 2020 and its profit total comprehensive income its cash flows and the changes inequity for the year ended on that date.
BASIS OF OPINION
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under thosestandards are further described in the Auditors' Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI') together with the ethical requirements that arerelevant to our audit of the standalone financial statements under the provisions of theAct and the rules there under and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
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 the matters described below to be the key audit mattersto be communicated in our report.
Revenue recognition in view of adoption of Ind AS 115 "Revenuefrom Contracts with Customers" (new revenue accounting standard)
Revenue recognition is significant audit risk within the Company. Riskexists in determination of transaction price in off-market transfer of investment by thecompany. The application of the new revenue accounting standard involves certain keyjudgments relating to identification of distinct performance obligations determination oftransaction price of the identified performance obligations the appropriateness of thebasis used to measure revenue recognized over a period.
Principal Audit Procedures
- Our audit consisted testing of the design and operating effectivenessof the internal controls and substantive testing as follows:
- We evaluated the design of internal controls relating to revenuerecognition.
- We selected sample of Sales transactions and tested the operatingeffectiveness of the internal control relating to revenue recognition.
- We carried out a combination of procedures involving enquiry andobservation re performance and inspection.
- We have tested sample of Sale transactions to their respectivecustomer contracts underlying invoices and related documents.
- We have performed cut-off procedures for sample of revenuetransactions at year-end in order to conclude on whether they were recognized inaccordance with Ind-AS 115.
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 theCompany's Annual Report but does not include the Standalone financial statements andour Auditors' report thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information; we are required to report that fact. We have nothing to report in thisregard.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the state of affairs profit orloss and other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including the IndAS specified under Section 133 of the Act.
This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and 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 standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing theCompany's financial reporting process.
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. 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 standalone 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 thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
- Obtain an understanding of internal financial control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act 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 thereasonableness of accounting estimates and related disclosures made by the 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 standalone financial statements or if such disclosures areinadequate to modify 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 thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
- Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (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 standalone financialstatements.
- 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 thatwe have 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.
- From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order 2016issued by the Central Government of India in term of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure "A" a statement on the mattersspecified in the 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 purpose of our audit;
b) In our opinion proper books of account as required by law have beenkept by the Company so far as appears from our examination of those books
c) The Balance Sheet Statement of Profit and Loss and Cash FlowStatement 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 Rule 7 of theCompanies (Accounts) Rules 2014 and the Companies (Accounting Standards) Amendment Rules2016.
e) On the basis of written representations received from the directorsas on 31 March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of Section164(2) of the Act. f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.
g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended. In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.
h) 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 as amended in our opinion and to the best of our information and accordingto the explanations given to us:
i) The Company does not have any pending litigations which would impactits financial position. ii) The Company did not have any long-term contracts includingderivatives contracts for which there were any material foreseeable losses. iii) Therewere no amounts which required to be transferred to the Investor Education and ProtectionFund by the Company. iv) The disclosures in the consolidated financial statementsregarding holdings as well as dealings in specified bank notes during the period from 8November 2016 to 30 December 2016 have not been made in the financial statements sincethey do not pertain to the financial year ended 31 March 2019.
|For RISHI SEKHRI AND ASSOCIATES |
|Chartered Accountants |
|FRN: 128216W |
|CA RISHI SEKHRI |
|M.NO. 126656 |
|Place: Mumbai |
|Date: 30.07.2020 |
ANNEXURE "A" TO THE AUDITORS' REPORT
The Annexure referred to in paragraph 1 under Report on OtherLegal and Regulatory Requirements' section of Our Report of even date to the membersof M/s SWORD-EDGE COMMERCIALS LIMITED on the accounts of the company for the year ended 31stMarch 2020.
1. The company does not have any fixed assets. Hence clause (i) (a)(b) & (c) are not applicable to the Company.
2. The company does not have any inventory. Hence clause (ii) (a)& (b) are not applicable to the Company.
3. As per information and explanation given to us the company has notgranted loans to parties covered in the register maintained under section 189 of theCompanies Act hence clause (iii) (a) to (c) are not applicable to the company.
4. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theAct with respect to the loans and investments made.
5. According to the information and explanations given to us theCompany has not accepted any deposits from the public. Therefore the directives issued bythe Reserve Bank of India and the provisions of sections 73 to 76 or any other relevantprovisions of the Companies Act and the rules framed there under are not applicable to theCompany.
6. As informed to us Central government has not prescribed maintenanceof cost records under sub-section (1) of section 148 of the Companies Act in respect ofproducts of the company.
7. In respect of Statutory dues:
a) As per information & according to explanation given to us thecompany is generally regular in depositing statutory dues with the appropriate authoritiesduring the year. According to the information and explanations given to us no undisputedamounts payable in respect of the above were in arrears as at March 31 2020 for a periodof more than six months from the date on when they become payable
b) As per information & according to explanation given to us thereare no cases of non deposit with the appropriate authorities of disputed dues ofIncome-tax and any other statutory dues with the appropriate authorities during the year.
8. In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in the repayment of dues to banks. The Companyhas not taken any loan either from financial institutions or from the government and hasnot issued any debentures.
9. Based upon the audit procedures performed and the information andexplanations given by the management the company has not raised moneys by way of initialpublic offer or further public offer including debt instruments and term Loans.Accordingly the provisions of clause 3 (ix) of the Order are not applicable to theCompany and hence not commented upon.
10. Based upon the audit procedures performed and the information andexplanations given by the management we report that no fraud by the Company or on thecompany by its Officers or employees has been noticed or reported during the year.
11. Based upon the audit procedures performed and the information andexplanations given by the management the managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act;
12. In our opinion the Company is not a Nidhi Company. Therefore theprovisions of clause 3 (xii) of the Order are not applicable to the Company.
13. In our opinion all transactions with the related parties are incompliance with section 177 and 188 of Companies
Act 2013 and the details have been disclosed in the FinancialStatements as required by the applicable accounting standards.
14. Based upon the audit procedures performed and the information andexplanations given by the management the company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures during the yearunder review. Accordingly the provisions of clause 3 (xiv) of the Order are notapplicable to the Company and hence not commented upon.
15. Based upon the audit procedures performed and the information andexplanations given by the management the company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly the provisions ofclause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.
16. In our opinion the company is not required to be registered undersection 45 IA of the Reserve Bank of India Act
1934 and accordingly the provisions of clause 3 (xvi) of the Order isnot applicable to the Company and hence not commented upon.
|For RISHI SEKHRI AND ASSOCIATES |
|Chartered Accountants |
|FRN: 128216W |
|CA RISHI SEKHRI |
|M.NO. 126656 |
|Place: Mumbai |
|Date: 30.07.2020 |
Annexure "B" to the Auditors' Report
Report on the internal financial controls with reference to theaforesaid standalone financial statements under section 143(3)(i) of the Companies Act2013
We have audited the internal financial controls with reference tofinancial statements of SWORD-EDGE COMMERCIALS LIMITED ("the Company") asof March 31 2020 in conjunction with our audit of the Ind AS financial statements of theCompany 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 (the "Guidance Note") issued by the Institute of CharteredAccountants 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 the Company's business includingadherence to Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and Standards on Auditingprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to financial statements. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to financial statements were established and maintained andwhether such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the Auditors'judgment including the assessment of the risks of material misstatement of the standalonefinancial 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 themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) 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.
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 March 31 2019 basedon the 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.
|CA RISHI SEKHRI |
|M.NO. 126656 |
|Place: Mumbai |
|Date: 30.07.2020 |