To the Members of Usha Martin Education & Solutions Ltd.
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying stand alone financial statements of Usha MartinEducation & Solutions Ltd. ( the Company ) which comprise the balance sheet as at 31stMarch2020 and the statement of Profit and Loss (including other comprehensive income)statement of changes in equity and statement of cash flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (herein after referred to as the stand alone financialstatements).
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 2020 and its profit changes in equity and its cash flowsfor the year 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 audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
|. 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 Audit Procedures |
|The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. Additionally new 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. ||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: |
| || 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 re-performance 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 analyzed 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 |
|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. ||Our audit approach was a combination of test of internal controls and substantive procedures which included the following: |
|Refer Notes 1(d) and Nil to the Standalone Financial Statements. || Evaluated the design of internal controls relating to recording of efforts incurred and estimation of efforts required to complete the performance obligations. |
| || Tested the access and application controls pertaining to time recording allocation and budgeting systems which prevents unauthorized 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 Audit Procedures |
|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(j) and NIL to the Standalone Financial Statements ||Obtained details of completed tax assessments and demands for the year ended March 31 2020 from management. Involvement of our internal experts hardly found anything to challenge the management s underlying assumptions in estimating the tax provision and recoverability and advance tax. |
|4. Valuation of investments and impairment thereof. ||Held at cost. No impairment provision is called for in terms of latest balance sheet of investee Carried at cost. |
|(a). Non Current Investments in Body Corporate; || |
|(b). Fixed Deposit with IDBI || |
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 of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance (changes in equity) and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the accountingStandards specified under section 133 of theAct. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.
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 is 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 assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order 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 allrelationships 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 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 the Annexure-2a 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 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 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 2020 in conjunction with our audit of thestandalone financial statements of the company for the year ended on that date and ourreport dated June 22 2020 as per Annexure-1 expressed an unmodified report.
(g) Pursuant to Section-197(16) of Companies Act 2013 it is hereby confirmed thatremuneration paid to whole time Director has been very much within the limit laid downunder this section.
(h) 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 does not have any pending litigations which would impact its financialposition
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 NILto the financial statements; [or the Company did nothave any long-term contracts including derivative contracts for which there were anymaterial foreseeable
| ||For G.Basu & Company |
| ||Firm Registration Number:301174E |
|Place : Kolkata || |
| ||Chartered Accountants |
|Dated : 22nd June 2020 || |
| ||P.K.Chaudhuri Partner |
|UDIN : 20003814AAAAAF8302 || |
| ||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 UshaMartin Education & Solutions Limited ( the Company ) as of 31st March 2020in 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 deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting 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 the auditors judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe Company s internal financial controls system over 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 anddispositions 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 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 2020 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.
| ||Firm Registration Number:301174E |
| ||Chartered Accountants |
|Place : Kolkata || |
|Dated : 22nd June 2020 ||P.K.Chaudhuri Partner |
|UDIN : 20003814AAAAAF8302 ||Membership No. 003814 |
ANNEXURE 2 TO THE AUDITORS REPORT
THIS IS REFERRED TO IN PARAGRAPH 1OF OUR REPORT OF EVEN DATE
i) The body corporate has fixed assets during the year. The company has maintainedproper records showing full particulars including quantitative details and situation offixed assets. Physical Verification has not been conducted 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 189 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 otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
Hence paragraph 3(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) ofthe Order is not applicable.
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 regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Valueadded Tax Cess and any other statutory dues with the appropriate authorities. Accordinglyto the information and explanation given to us no undisputed amounts payable in respectof the above were in arrears as at 31st March 2020 for a period of more than six monthsfrom the date 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.
|Place : Kolkata ||For G.Basu & Company |
|Dated : 22nd June 2020 ||Firm Registration Number:301174E |
| ||Chartered Accountants |
|UDIN : 20003814AAAAAF8302 || |
| ||P.K.Chaudhuri Partner |
| ||Membership No. 003814 |