To the Members of Usha Martin Education & Solutions Ltd.
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying stand alone financial statements of Usha MartinEducation & Solutions Ltd. ("the Company") which comprise i 2019 and thestatement of Profit and Loss (including income) statement of changes in equity andstatement of cash flows for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information(herein after referred to as "the stand alone financial statements).
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2019 and its loss changes in equity and its cash flows for theyear ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thestand alone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our au dit of the fi nancial statements of the current period. Thesematters were addressed in the context of our au dit of the fin ancial statements as awholeand in forming our opinion thereon and we do not provide a separate opinion onthese matters.
|Sr. No. ||Key Audit Matter ||Auditor's Response |
|1. ||Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) ||Principal A udit Procedures We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard.Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: |
| ||The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligationsdetermination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognised over a period.Additionallynew revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. || Evaluated the design of internal controls relating to implementation of the new revenue accounting standard. |
| || || Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation reperformance and inspection of evidence in respect of operation of these controls. |
| || || Tested the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard. |
| || || Selected a sample of continuing and new contracts and performed the following procedures: |
| || || Read analysed and identified the distinct performance obligations in these contracts. |
| || || Compared these performance obligations with that identified and recorded by the Company. |
| || || Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration |
| || || Samples in respect of revenue recorded for time and material contracts were tested using a combination of approved time sheets including customer acceptances subsequent invoicing and historical trend of collections and disputes. |
| || || In respect of samples relating to fixed price contracts progress towards satisfaction of performance obligation used to compute recorded revenue was verified with actual and estimated efforts from the time recording and budgeting systems. We also tested the access and change management controls relating to these systems. |
| || || Sample of revenues disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts. |
| || || Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings. |
| || || We reviewed the collation of information and the logic of the report generated from the budgeting system used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date |
|2. ||Accuracy of revenues and onerous obligations in respect of fixed price contracts involves critical estimates ||Principal Audit Procedures Our audit approach was a combination of test of internal controls and substantive procedures which included the following: |
| ||Estimated effort is a critical estimate to determine revenues and liability for onerous obligations. This estimate has a high inherent uncertainty as it requires consideration of progress of the contract efforts incurred till date and efforts required to complete the remaining contract performance obligations. || Evaluated the design of internal controls relating to recording of efforts incurred and estimation of efforts required to complete the performance obligations. |
| ||Refer Notes 1 (d) and NIL to the Standalone Financial Statements. || Tested the access and application controls pertaining to time recording allocation and budgeting systems which prevents unauthorised changes to recording of efforts incurred |
| || || Selected a sample of contracts and through inspection of evidence of performance of these controls tested the operating effectiveness of the internal controls relating to efforts incurred and estimated. |
| || || Selected a sample of contracts and performed a retrospective review of efforts incurred with estimated efforts to identify significant variations and verify whether those variations have been considered in estimating the remaining efforts to complete the contract. |
| || || Reviewed a sample of contracts with unbilled revenues to identify possible delays in achieving milestones which require change in estimated efforts to complete the remaining performance obligations. |
| || || Performed analytical procedures and test of details for reasonableness of incurred and estimated efforts. |
|3. ||Evaluation of uncertain tax positions & Recoverability of advance tax. ||Principal A udit Procedures Obtained details of completed tax assessments and demands for the year ended March 31 2019 from management. Involvement of our internal experts hardly found anything to challenge the management'sunderlying assumptions in estimating the tax provision and recoverability and advance tax. |
| ||The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Refer Notes 1 (i) and NIL to the Standalone Financial Statements || |
|4. ||Valuation of investments and impairment thereof. (a) . Non Current Investments in Body Corporate; (b) . Fixed Deposit with IDBI ||Held at cost. No impairment provision is called for in terms of latest balance sheet of investee Carried at cost. |
Responsibilities of Management's 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 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 (changes in equity) and cash flows 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 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. Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the 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 skepticism throughout the audit. We also:
Identify and asseses the risk 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 todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern. Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them on relationshipsand other matters that may reasonably be thought to bear on our independence and whereapplicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes 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 benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) order 2016 ('the Order') issued bythe Central Government of India in terms of Section 143(ii) of the Act we give in theAnnexure-2 a statement on the matters specified in paragraphs 3 and 4 of the order.
2. As required by Section 143(3) of Indian 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 standalone financial statements comply with theAccounting Standards specified under Section 133 of 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 31 stMarch 2019 taken on record by the Board of Directors none of the Directors arediqualified as at 31st March 2019 from being appointed as a director
(f) We have audited the Internal Financial Controls over Financial Reporting (IFCOFR)of the company as on 31st March 2019 in conjunction with our audit of thestandalone financial statements of the company for the year ended on that date and ourreport dated May 28 2019 as per Annexure-1 expressed an unmodified report.
(g) 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 financial statements - Refer Note 2(e) to the financial statements; [orthe Company does not have any pending litigations which would impact its financialposition9]
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer Note NIL to the financial statements; [or the Company did nothave any long- term contracts including derivative contracts for which there were anymaterial foreseeable losses.10]
| ||For G.Basu & Company |
| ||Firm Registration Number:301174E |
|Place : Kolkata ||Chartered Accountants |
|Dated : 28th May 2019 ||P.K.Chaudhuri Partner Membership No. 003814 |
ANNEXURE "1" TO THE AUDITORS' REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Usha MartinEducation & Solutions Limited ("the Company) as of 31st March2019 in conjunction with our audit of the financial statements 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 over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.
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 generally acceptedaccounting principles. A company's internal financial control over financialreporting includes those policies and procedures that
(1 ) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions 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 31st March 2019based on 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 of
|Chartered Accountants of India. ||For G.Basu & Company |
| ||Firm Registration Number:301174E |
|Place : Kolkata ||Chartered Accountants |
|Dated : 28th May 2019 ||P.K.Chaudhuri Partner Membership No. 003814 |
ANNEXURE "2" TO THE AUDITORS' REPORT
THIS IS REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE
i) The body corporate has fixed assets during the year.
The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. Physical Verification has not beenconducted during the year under audit.
ii) The company is a service company. Accordingly it does not hold any physicalinventories. Thus paragraph 3(ii) of the Order is not applicable.
iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the Register maintained undersection 1 89 of the Act. Accordingly the provisions of paragraph 3(iii)(a) to (c) of theOrder are not applicable to the Company.
iv) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Section 73 to 76 or any
of Deposit) Rules 2015 with regard to the deposits accepted from the public are notapplicable. Hence paragraph3(V) of the Order is not applicable.
v) The clause relating to maintenance of cost records under sub-section (1) of section148 of the Companies Act 2013 is not applicable to the company. Hence paragraph 3(vi
vi) (a) Accordingly to information and explanations given to us and on the basis of ourexamination of the
books of account and records the Company has been generally regular in depositingundisputed statutory dues including Provident Fund Employees State Insurance Income-TaxSales tax Service Tax Duty of Customs Duty of Excise Value added Tax Cess and anyother statutory dues with the appropriate authorities. Accordingly to the information andexplanation given to us no undisputed amounts payable in respect of the above were inarrears as at 31 st March 2019 for a period of more than six months from thedate on when they become payable.
(b) According to the information and explanation given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added taxoutstanding on account of any dispute.
vii) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to financialinstitution bank government or dues to debenture holders ( there is no debenture holders).
viii) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the company has not raised moneys by way ofinitial public offer or further public offer including debt instruments and term loans.Accordingly paragraph 3(xi) of the order is not applicable to the Company.
ix) According to the information and explanations given to us no fraud by the Companyor on the company by its offers or employees has been noticed or reported during the year.
x) Accordingly to the information and explanations given to us and on the basis of ourexamination of the records of the company 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.
xi) In our Opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.
xii) According to the information and explanations given to us and on the basis of ourexamination of the records of the company transactions with the related parties are incompliance with section 177 and 188 of Companies Act 2013 where applicable and details ofsuch transactions have been disclosed in the Financial Statements as required by theapplicable accounting standards.
xiii) Accordingly to the information and explanations given to us and on the basis ofour examination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review. Accordingly paragraph 3(xiv) of the Order is not applicable to theCompany.
xiv) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe order is not applicable to the company
|xv) Other clauses of the Order are not applicable to the Company. ||For G.Basu & Company |
| ||Firm Registration Number:301174E |
| ||Chartered Accountants |
|Place : Kolkata ||P.K.Chaudhuri Partner |
|Dated : 28th May 2019 ||Membership No. 003814 |