You are here » Home » Companies ยป Company Overview » 63 Moons Technologies Ltd

63 Moons Technologies Ltd.

BSE: 526881 Sector: IT
NSE: 63MOONS ISIN Code: INE111B01023
BSE 00:00 | 24 Apr 2020 63 Moons Technologies Ltd
NSE 05:30 | 01 Jan 1970 63 Moons Technologies Ltd

Notice: Undefined property: stdClass::$market_capital_for_nse in /usr2/unibs/application/modules/live-market/views/scripts/company/bs-new-bse-nse-block.php on line 17
OPEN 58.80
PREVIOUS CLOSE 60.30
VOLUME 3805
52-Week high 185.00
52-Week low 39.75
P/E
Mkt Cap.(Rs cr) 269
Buy Price 57.50
Buy Qty 430.00
Sell Price 58.30
Sell Qty 55.00
OPEN 58.80
CLOSE 60.30
VOLUME 3805
52-Week high 185.00
52-Week low 39.75
P/E
Mkt Cap.(Rs cr) 269
Buy Price 57.50
Buy Qty 430.00
Sell Price 58.30
Sell Qty 55.00

63 Moons Technologies Ltd. (63MOONS) - Auditors Report


Notice: Undefined variable: pattern in /usr2/unibs/application/modules/live-market/views/scripts/company/annual-report.php on line 72

Company auditors report

To the members of 63 moons technologies limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

QUALIFIED OPINION

We have audited the accompanying standalone financial statements of 63moons technologies limited (hereinafter referred as "the Company") whichcomprise the balance sheet as at 31 March 2019 the statement of profit and loss(including other comprehensive income) the statement of cash flows and the statement ofchanges in equity for the year then ended and notes to the standalone financialstatements including a summary of significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to theexplanations given to us except for the possible effects of the matter described inthe Basis for Qualified Opinion section of our report the aforesaid standalonefinancial statements give the information required by the Companies Act 2013 (hereinafterreferred as "the Act") in the manner so required and give a true and fair viewin conformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended (hereinafterreferred as "Ind AS") and other accounting principles generally accepted inIndia of the state of affairs (financial position) of the Company as at 31 March 2019and its profit / loss (financial performance including other comprehensive income) itscash flows and the changes in equity for the year ended on that date.

BASIS FOR QUALIFIED OPINION

Note no. 58 59 60 and 61 form basis for our qualified opinion. Asstated by the Management of the Company in Note 58 to the standalone financial statementsCivil Suits have been filed against the Company in relation to event occurred on NSEL'strading platform. These matters are pending at various stages of adjudication. As statedin the said note the Management of the Company does not foresee that the parties who havefiled Civil Suits would be able to sustain any claim against the Company. In addition asstated by the management in note 58 59 60 and 61 to the standalone financial statementsthere are First Information Reports / complaints / letters / orders / notices registered /received against various parties including the Company from / with the Economic OffencesWing of the Mumbai Police (EOW) Central Bureau of Investigation (CBI) Home Department -Government of Maharashtra under MPID Act the Directorate of Enforcement and the SeriousFraud Investigation Office (SFIO) closure report etc. Above matters are pending atvarious stages of adjudication / investigation.

In this regard the management and those charged with Governance haverepresented to us that other than as stated in the said notes to the standalone financialstatements there are no claims litigations potential settlements involving the Companydirectly or indirectly which require adjustments to / disclosures in the standalonefinancial statements and that the ability of the Company to carry out its day-to-dayoperations / activities is not seriously affected due to any such letters / orders /notices as aforesaid.

In the light of the above representations regarding the ongoinginvestigations and matters the outcome of which is not known and is uncertain at thisstage we are unable to comment on the consequential impact in respect of the same on thestandalone financial statements for the year ended 31 March 2019.

We conducted our audit in accordance with the Standards on Auditing(hereinafter referred as "SAs") specified under section 143(10) of the Act. Ourresponsibilities under those SAs are further described in the Auditor'sresponsibilities for the audit of the standalone financial statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our qualified audit opinion.

EMPHASIS OF MATTERS

A. We draw attention to Note 57 to the standalone financial statements.Government of India has filed the Company Petition before the Principal

Bench of the Company Law Board under the Companies Act 1956 seekinginter alia removal and super session of the Board of Directors of the Company. The matteris pending before National Company Law Appellate Tribunal ("NCLAT") and iscurrently sub-judice.

B. We draw attention to Note 49 to the standalone financial statementsregarding utilisation of unexpired MAT credit entitlement by the Company.

The Company has a total MAT credit entitlement of Rs. 8950.29 lakhs asat 31 March 2019. Based on the projections made by the Company's Management regardingincome-tax liability of the Company Management is of the view that the Company will beable to utilise the unexpired MAT credit entitlement in eligible projected years.

Our opinion is not qualified in respect these matters of emphasis.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements taken as a whole in forming our opinion thereon and we do notprovide a separate opinion on these matters. We have determined the key audit matters asdescribed below: A. Determination of fair value of carrying amounts of investments B.Accounting treatment for contracts with customer C. C ontingent liabilities

A. Determination of fair value of carrying amounts of investments

Description of key audit matter

The company has investments net of provisionRs. 119421.29oflakhs asat 31 March 2019 consisting of Investments in the equity instruments of subsidiariesthird party bonds mutual funds other equity instruments etc. and are valued as per IndAS 109 "Financial instruments". By their nature these are subjected to variousfactors related to respective investee entities including but not limited to economicfactors business dynamics financial performance etc and impact a fair valuation of theseinvestments. Accordingly this necessitates a close monitoring by the management of thesesituations and judgement based on appropriate evaluation criteria to arrive at a fairvalue of carrying amounts of these assets as at balance sheet date. Against thisbackground this matter was of significance in the context of our audit.

Description of Auditor response

We have carried out a comparison between carrying value of investmentas at balance sheet date and net-worth as reflected by latest audited financials ofinvestee companies. Wherever carrying amount of investment is more than the net-worth ofinvestee company we have discussed and enquired with the management the process followedby them to identify permanent diminution if any in the value of investment and necessaryaccounting treatment adopted in the books. In addition management has provided us withthe future business plans and how in their business judgement such gap between investmentand net-worth of the investee is either compensated with improving business conditions orvaluations of such entities. In case of business valuations carried out by third partyprofessionals and provided to us by the management of some of the investee companies wehave verified reasonableness of the assumptions source data considered etc. whilearriving at valuation. Going forward our regular audit procedures are designed to keep afollow up on outcomes of these management assertions.

B. Accounting treatment for contracts with customer

Description of key audit matter

Revenue amounting Rs. 14719.07tolakhs reported in the company'sfinancial statements pertains to customer specific contracts and the same are required tosatisfy the recognition and measurement criteria as prescribed in IND AS 115‘Revenue from Contracts with Customers'. Company's revenue is bifurcated into twomain parts

(a) revenue from software products (IPR based licenses) and

(b) revenue from software services. Certain contracts necessarilyinvolve estimations and certain assumptions to be made by the management in determiningthe quantum of revenue to be recognised in specific period. This inherently createscertain uncertainties and results in complexities in accounting treatment whereinincorrect assumptions and estimates can lead to revenue being recognised in incorrectaccounting periods thereby impacting the results. Considering these factors in thecontext of our audit this matter was of significance and hence a key audit matter.

Description of Auditor's response

With a view to verify the reasonableness of the revenue accounting wecarried out following procedures:

a) Understanding the internal control environment for revenuerecognition and to test check with a view to verify its operating effectiveness;

b) Major contracts were read and analysed to verify correctness ofaccounting of revenue as calculated by the Company's Management;

c) Discussed with the management process of identification of variableconsideration and verified the working on test basis;

d) Verified the working of unbilled revenue and unearned revenue ontest basis;

e) Performed analytical procedures and obtained reasons for majorvariances;

f ) Ensured that revenue is recognized in accordance with accountingpolicy of the Company and Ind AS 115;

C. C ONTINGENT LIABILITIES

Description of key audit matter

C ontingent liabilities as at 31 March 2019 amounted Rs.23001.67tolakhs which mainly include pending income-tax matters and certain legal casesother than those forming basis for our qualified opinion. Contentious income tax mattersrelate to interpretational differences between the company and various tax authoritiescertain matters subjected to internal circulars and guidelines within tax authoritiesirrespective of stated legal provisions sometimes requiring decision making only by highertax authorities through appellate procedures resulting in delays in outcome. Given thecurrent legal and operational embargo that the company is facing it is subjected themultiple litigations by and on the company sub-judice at various courts and levelsrequiring the Company's Management to exercise significant judgement on these outcomes todetermine the liabilities that are contingent in nature. Considering these factors in thecontext of our audit this matter was of significance and hence a key audit matter.

Description of Auditor's response

With a view to ensure that disclosures made by the company in Note no.31 are determined appropriately and prudently we obtained information of pendingincome-tax matters from the Company and have obtained / verified the documents includingthe communication with the departments provided by the Company. In addition we havecarried out comparison with respect to previous year and obtained / reviewed documentationfor additional tax matters arisen during the year. Our tax team has carried outdiscussions with the Company's internal tax team on these cases mainly with respect toissues raised by various tax authorities in their communication to the company tosubstantiate company's assessment that there are no present obligations perceived.

With respect to legal cases disclosed to us we have obtained updateson pending cases from the management and discussed it with the Company's internal legaldepartment wherever necessary. We carried out a comparison between the latest status andimmediate previous status. While comparing we have tried to ascertain theappropriateness without being judgemental of the management judgement exercised inupdating to the latest status and have tried to evaluate an impact on such ascertainmentof whether the company liabilities to which it is contingently liable are appropriatelyascertained with prudence principle.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS ANDAUDITOR'S REPORT THEREON HEREINAFTER REFERRED AS "OTHER INFORMATION"

The Company's Management and Board of Directors are responsible for theother information. The other information comprises the information included in theDirectors' Report including any annexures thereto Corporate Governance Report andManagement Discussion and Analysis but does not include the standalone financialstatements and our auditor's report thereon.

These reports are expected to be made available to us after the date ofthis auditor's report. Our opinion on the financial statements does not cover the otherinformation and we will not express any form of assurance conclusion thereon. Inconnection with our audit of the standalone financial statements our responsibility is toread the other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. When we read these reports if we conclude that there is materialmisstatement therein we are required to communicate the matter to those charged withgovernance and describe actions applicable as per applicable laws and regulations.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FORTHE STANDALONE FINANCIAL STATEMENTS

The Company's Management and Board of Directors are responsible for thematters stated in section 134(5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Ind AS. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements Company's Managementand Board of Directors are responsible for assessing the Company's ability to continue asa going concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company'sfinancial reporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIALSTATEMENTS

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:

A. 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.

B. Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances.

Under section 143(3)(i) of the Act we are also responsible forexpressing our opinion on whether the Company has adequate internal financial controlssystem in place and the operating effectiveness of such controls

C. Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

D. 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 evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

E. 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 that wehave 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 precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso 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 2016("the Order") issued by the Central Government of India in terms of section143(11) of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by section 143 (3) of the Act and based on our audit wereport that: a) We have sought and obtained all the information and explanations which tothe best of 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 beenkept by the Company so far as it appears from our examination of those books;

c) The balance sheet the statement of profit and loss (including othercomprehensive income) statement of changes in equity and the statement of cash flowsdealt with by this report are in agreement with the books of account;

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS 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 thedirectors as on 31 March 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2019 from being appointed as a director in termsof section 164(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 anunmodified opinion 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 the auditor'sreport in accordance with the requirements of section 197(16) of the Act as amended wereport that 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; and

h) With respect to the other matters to be included in the auditor'sreport in accordance with rule 11 of the Companies (Audit and Auditors) Rules

2014 in our opinion and to the best of our information and accordingto the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31March 2019 on its standalone financial statements to the extent it is ascertainable[Refer Note 31 to the standalone Ind AS financial statements and ‘Basis for QualifiedOpinion'].

ii. The Company does not have any outstanding long-term contractsincluding derivative contracts as on 31 March2019.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For Sharp & Tannan Associates

Chartered Accountants

Firm's Registration No.: 109983W

Tirtharaj Khot

Partner

Membership No.: (F) 037457

Mumbai: 27 May 2019

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 1 under the heading "Report on OtherLegal and Regulatory Requirements" of our report on even date:

i) In respect of the Company's property plant & equipment (fixedassets)

a) The Company is maintaining proper records showing full particularsincluding quantitative details and situation of all fixed assets.

b) as explained to us fixed assets are being physically verified by themanagement which in our opinion is reasonable having regard to the size of the Companyand nature of its assets. The frequency of physical verification is reasonable and nomaterial discrepancies were noticed on such verification.

c) the title deeds of immovable properties are held in the name of theCompany. ii) According to the process explained to us and as followed by the Company theCompany's inventory items are directly delivered to its customers on their procurement.Accordingly reporting on paragraph 3(ii) of the Order is not applicable.

iii) The Company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under Section 189 of the Act. Accordingly reporting on paragraph 3(iii) of theOrder is not applicable. iv) In respect of loans investments guarantees and securityprovisions of section 185 and section 186 of the Act have been complied with to theextent applicable.

v) According to information and explanation provided to us the Companyhas not accepted deposits from the public and accordingly reporting on para 3(v) of theOrder is not applicable. vi) Maintenance of cost records has not been specified by theCentral government under section 148(1) of the Act. Accordingly reporting on paragraph 3(vi) of the Order is not applicable.

vii) a) According to the information and explanations given to us andthe records of the Company examined by us in our opinion the Company is generallyregular in depositing undisputed statutory dues including provident fund employees' stateinsurance income-tax goods and service tax duty of customs cess and any other materialstatutory dues as applicable with the appropriate authorities. According to theinformation and explanation given to us no undisputed amounts payable in respect ofprovident fund employees' state insurance income-tax goods and service tax duty ofcustoms cess and any other material statutory dues as at 31 March 2019 for a period ofmore than six months from the date they became payable.

b) According to the information and explanation given to us and therecords of the Company examined by us the particulars of service tax excise duty andsales tax as at 31 March 2019 which have not been deposited because of any dispute exceptthe following:

Name of the Statue Nature of the disputed dues

Amount (Rs. in lakhs)

Period to which the amount relates

Forum where disputes are pending
Finance Act 1994 Tax penalty and interest

165.92

2007-08

Commissioner of Service Tax
Central Excise Act 1944 Tax penalty and interest

257.43

2005-06

Superintendent Central Excise
Income Tax Act 1961 Tax penalty and interest

2572.82

2010-11

Commissioner of Income Tax Appeals

viii) According to the records of the Company examined by us and theinformation and explanation given to us during the year the Company has not defaulted inrepayment of loans or borrowings to any bank. The Company has not availed any loans orborrowings from financial institution government and debenture holder.

ix) According to information and explanation given to us no money hasbeen raised by way of further public offer (including debt instruments) however term loanbeing external commercial borrowing has been applied for the purpose for which they wereraised.

x) Except for the matters(s) referred in the ‘Basis forQualified Opinion' of our audit report which are sub-judice and hence are inconclusive tothe best of our knowledge and information and explanations given to us no fraud by theCompany or any fraud on the Company by its officers or employees has been noticed orreported during the year

xi) Managerial remuneration has been paid / provided in accordance withthe requisite approvals mandated by the provisions of Section 197 read with Schedule V tothe Act.

xii) The Company is not a Nidhi Company. Accordingly reporting on para3(xii) is not applicable.

xiii) All transactions with related parties are in compliance withSections 177 and 188 of the Act and the details have been disclosed in the standalonefinancial statements as required by the applicable accounting Standards.

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 1 under the heading "Report on OtherLegal and Regulatory Requirements" of our report on even date:

xiv) The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview accordingly reporting on paragraph 3 (xiv) of the Order.

xv) The Company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly reporting on paragraph

3 (xv) of the Order is not applicable.

xvi) The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934. Accordingly reporting on paragraph

3 (xvi) of the Order is not applicable.

For Sharp & Tannan Associates

Chartered Accountants

Firm's Registration No.: 109983W

Tirtharaj Khot

Partner

Membership No.: (F) 037457

Mumbai: 27 May 2019

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 2(f) under the heading "Report on otherlegal and regulatory requirements" of our report on even date:

REPORT ON THE INTERNAL FINANCIAL CONTROLS

UNDER CLAUSE i OF SUB SECTION 3 OF SECTION 143 OF THE COMPANIES ACT2013 "THE ACT"

OPINION

We have audited the internal financial controls over financialreporting of 63 moons technologies limited (hereinafter referred as "theCompany") as of 31 March 2019 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.

In our opinion and to the best of our information and according to theexplanations given to us 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 onthe internal financial control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting (hereinafterreferred as "the guidance note") issued by the Institute of CharteredAccountants of India (hereinafter referred as "ICAI").

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's Management and Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the guidance note. 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 the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the guidance note and the SAs issued by ICAI and deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls. Those SAs 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud 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 internal financialcontrols 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 standalone financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial 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.

For Sharp & Tannan Associates

Chartered Accountants

Firm's Registration No.: 109983W

Tirtharaj Khot

Partner

Membership No.: (F) 037457

Mumbai: 27 May 2019

 


Notice: Undefined variable: mediaAbsUrl in /usr2/unibs/application/modules/live-market/controllers/CompanyController.php on line 6061