To The Members of Uniinfo Telecom Services Limited Indore
Report on the Standalone Financial Statements
We have audited the standalone financial statements of UNIINFO TELECOM SERVICES LIMITED("the Company") which comprises the balance sheet as at 31st March 2019 andthe statement of Profit and Loss and the statement of cash flows for the year then endedand notes to the financial statements including a summary of significant accountingpolicies and other explanatory information.
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 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 and profit and its cash flows for the yearended 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 Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a 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 standalone 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.
The Key Audit matters
Accuracy of Revenues Recognition in respect of onerous obligation on service contractsinvolves significant judgment:
The company is engaged in rendering Contractual technical services relating to Networkoptimization Network planning drive test survey services etc. to OEM's and Telecomoperators. Such contractual services are complex to determine revenues and liability foronerous obligation. The recognition of Revenue and the estimation of the outcome ofservice contracts require significant management judgment in particular with respect toestimation the cost to complete and the amount of variation orders to be recognised. Thisestimate has a high inherent uncertainty as it requires consideration of progress of thecontract efforts incurred till date and efforts required to complete the remainingcontract performance obligations.
At the year end a significant amount of Work in progress (Contract assets andLiabilities) related to these service contracts is recognised on the balance sheet.
Refer Notes 2.5 and 2.15 to the standalone Financial Statements.
Our audit approach was a combination of test of internal controls and substantiveprocedures which included the following:
Evaluated the design of internal controls relating to recording of effortsincurred and estimation of efforts required to complete the performance obligations.
Tested the controls that the company has put in place over its process to recordservice contract costs and contract revenues and the calculation of the stage ofcompletion.
Selected a sample of service contracts and through inspection of evidence ofperformance of these controls tested the operating effectiveness of the internal controlsrelating to efforts incurred and estimated.
Assessed the appropriateness of Work-in progress (Contract assets) on balancesheet by evaluating the underlying documentation to identify possible delays in achievingmilestones which may require change in estimated costs to complete the remainingperformance obligations
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditors'report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
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 have performedknowledge obtained in the audit or otherwise appears to be materially misstated.
If based on the work we 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 Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate implementation and maintenance ofaccounting 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 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 for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the 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 or the override of internalcontrol.
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 hasadequate internal financial controls with reference to standalone financial statements inplace and the operating 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 ourauditors' 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 standalonefinancial statements including the disclosures and whether the standalone financialstatements represent 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 significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' 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
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 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.
(A) 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 our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books
c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 st March 2019 from being appointed as a director in terms ofSection 164 (2) of the Act. f) With respect to the adequacy of the internal financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".
(B) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements Refer Note XX to the financialstatements
ii. The Company did not have any Long Term Contracts including derivative contract forwhich there were any material foreseeable losses
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these standalone financial statements since they do not pertainto the financial year ended 31 March 2019.
(C) With respect to the matter to be included in the Auditors' Report under section197(16):
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.
| ||For APG & Associates |
| ||Chartered Accountants |
| ||Firm Reg. No 119598W |
|Place: Indore ||(CA ATUL SHARMA) |
|Date: 25th May 2019 ||Partner |
| ||Membership No 075615 |
Annexure "A" to the Independent Auditor's Report
(Referred to in Paragraph 1 under the heading of "report on other legal andregulatory requirements" of our report of even date)
Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the company and taking into theconsideration the information and explanations given to us and the books of accounts andother records examined by us in the normal course of audit and the best of our knowledgeand belies we report that:
i) In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The fixed assets have been physically verified by the management during the year andthere is a regular programme of verification of such assets which in our opinion isreasonable having regard to the size of the Company and the nature of its assets.
c) As informed no material discrepancies were noticed on such verification and thesame has been properly dealt with in the books of accounts.
ii) The Company is Service Company primarily rendering services to telecom companies;it does not hold any physical inventory. Accordingly the clause 3(ii) of the order is notapplicable to the company.
iii) According to the information and explanation given to us Company has during theyear not granted any loans secured or unsecured to companies firm and other partiescovered in the register maintained under Section 189 of the Companies Act 2013.Accordingly paragraph 3(iii) (a)(b)(c) of the Order is not applicable to the Company.
iv) According to the information and explanation given to us company has complied allthe provisions of Section 185 and 186 of the Companies Act 2013 as applicable.
v) The Company has not accepted any deposits from public. therefore the provisions ofclause 3 (v) of the order are not applicable to the Company.
vi) According to information and explanation given to us the Company is not requiredto maintain cost records under (Cost Records & Audit) Rules 2014 prescribed by theCentral Government under Section 148 (1) of the Companies Act 2013.
vii) According to the information and explanation given to us in respect of Statutorydues:
a) The company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including Provident fund Employees state insurance income taxGoods and Service Tax sales tax service tax custom duty excise duty value addedtax cess and other statutory dues to the extent applicable to it though there has beenslight delay in few cases of TDS PF and ESIC. b) According to the information andexplanation given to us there are no material dues in respect of Provident Fund EmployeesState Insurance Income tax sales tax Goods and Service Tax duty of excise duty CustomDuty Service Tax cess and Value added tax which have not been deposited on account ofany dispute except Income Tax which have not been deposited as at 31st March2019 on account of dispute as under:-
|Nature of Statute ||Nature of Dues ||Forum where Matter is Pending ||Period to which the Amount relates ||Amount (In Rupees ) |
|The Income Tax Act1961 ||Income Tax ||Commissioner of Income Tax -Appeals ||Asst. Year 2017-18 ||512587 |
viii) In our opinion and according to the information and explanations given to us thecompany has not defaulted in the repayment of dues to financial institution or bank. Thecompany has not taken any loan from the government and has not issued any debentures.
ix) According to the information and explanations given to us on an overall basisfund raised by way of public offer (IPO) during preceding Financial year i.e. 2017-18 weresubsequently utilised during the year at various dates for the purpose for which they wereobtained and balance amount remained unutilised at March 31 2019 are kept undertemporarily bank fixed deposits mutual funds and bank accounts.
Further term loan have been applied for the purpose for which it was raised.
x) Based upon the audit procedures performed and according to information andexplanations given to us we report that no fraud on or by the company has been noticed orreported during the year or on the company by its officers or employees.
xi) Based on the information and explanation given to us the Managerial remunerationhas been paid in accordance with the requisite approvals as mandated by the provisions ofSection 197 read with the schedule V to the Companies Act 2013.
xii) In our opinion and according to the information and explanation given to us thecompany is not 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 of the records of the company all the transaction with the related partiesare in the compliance with the section 177 and 188 of the Companies Act 2013 and thedetails have been disclosed in the financial statement etc. as required by the applicableAccounting Standards.
xiv) During the year the company had not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures hence reporting underclause 3 (ixv) of the order is not applicable to the company.
xv) Based upon the audit procedure performed and the information and explanations givenby the management the company has not entered into any non cash transaction with thedirectors persons concerned with directors. Accordingly the provisions of paragraph 3(xv)of the order are not applicable to the company.
xvi) The company is not required to take registration under section 45IA of RBI Act1934 and accordingly the clause 3(xvi) of the order is not applicable to the Company.
| ||For APG & Associates |
| ||Chartered Accountants |
| ||FRN No. 119598W |
| ||(CA ATUL SHARMA) |
|Place: Indore ||Partner |
|Date: 25/05/2019 ||Membership No 075615 |
Annexure- B to the Auditor's Report
(Referred to is paragraph 2(e) under "Report on other legal and regulatoryrequirements section of our report to the members of Uniinfo Telecom Services Limited ofeven date)
Report on the Internal Financial Controls under Clause (i) of the Sub-section 3 ofSection 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of the M/sUniinfo Telecom Services Ltd. ("the Company") as of 31 March 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 over financial reporting criteriaestablished by the Company considering the essential components of the internal controlstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly andefficiently 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 over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting("the Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 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 systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddisposition of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 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 to be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion 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 31 March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
|For APG & Associates || |
|Chartered Accountants || |
|FRN No. 119598W || |
| ||(CA ATUL SHARMA) |
| ||Partner |
|Place: Indore ||Membership No. 075615 |
|Dated: 25th May 2019 || |