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63 Moons Technologies Ltd.

BSE: 526881 Sector: IT
NSE: 63MOONS ISIN Code: INE111B01023
BSE 15:53 | 27 Mar 2018 63 Moons Technologies Ltd
NSE 05:30 | 01 Jan 1970 63 Moons Technologies Ltd
OPEN 90.50
PREVIOUS CLOSE 89.05
VOLUME 85729
52-Week high 166.00
52-Week low 53.80
P/E 6.29
Mkt Cap.(Rs cr) 419
Buy Price 0.00
Buy Qty 0.00
Sell Price 90.85
Sell Qty 39.00
OPEN 90.50
CLOSE 89.05
VOLUME 85729
52-Week high 166.00
52-Week low 53.80
P/E 6.29
Mkt Cap.(Rs cr) 419
Buy Price 0.00
Buy Qty 0.00
Sell Price 90.85
Sell Qty 39.00

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

Company auditors report

TO THE MEMBERS OF FINANCIAL TECHNOLOGIES (INDIA) LIMITED

Report on the standalone financial statements

We have audited the accompanying standalone financial statements of FinancialTechnologies (India) Limited (Rs.the Company') which comprise the balance sheet as atMarch 31 2015 the statement of profit and loss and the cash flow statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.

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 (Rs.the Act') with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements 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 statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor’s responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the standalone financial statements.

Basis for Qualified Opinion

As stated by the Management of the Company in Note 57 to the standalone financialStatement Writ Petitions (WP) Public Interest Litigation (PIL) Civil Suits have beenfiled against the Company in relation to NSEL event wherein the Company has been made aparty in the WP and Civil Suits. These matters are pending at various stages ofadjudication. As stated in the said note based on legal advice the management of theCompany does not foresee that the parties who have filed the WP PIL Civil Suits would beable to sustain any claim against the Company. In addition as stated by the management innote 57 and 59 to the standalone financial Statement there are First Information Reportsregistered against various parties including the Company with the Economic Offences Wingof the Mumbai Police (EOW) Central Bureau of Investigation (CBI) and MIDC PoliceStation Mumbai District.

In this regard the Management and those charged with Governance have represented to usthat other than as stated in the said note to the Statement there are no claimslitigations potential settlements involving the Company directly or indirectly whichrequire adjustments to/disclosures in the Statement.

In the light of the above representations regarding the ongoing investigations andmatters the outcome of which is not known and is uncertain at this stage we are unableto comment on the consequential impact in respect of the same on the results for the yearended March 31 2015.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter specified under ‘Basis forQualified Opinion' paragraph the aforesaid standalone financial statements give theinformation required by the Act 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 2015 and its profit and its cash flows for theyear ended on that date.

Emphasis of Matter

1. We draw attention to Note 61 to the standalone financial statements regardingutilisation of unexpired MAT credit entitlement by the Company. The Company has a totalMAT credit entitlement of Rs. 19270.02 Lakhs as at March 31 2015 including recognitionof Rs. 10081.20 Lakhs during the year ended March 31 2015. Based on the projections asmade by the Company's management regarding income-tax liability of the Company Managementis of the view that the Company will be able to utilise the unexpired MAT creditentitlement in projected years.

2. We draw attention to Note 55 to the standalone financial statements which describethe receipt of the draft order proposing amalgamation of National Spot Exchange Limitedwith the Company. The Company has filed a Writ Petition before the Honourable Bombay HighCourt challenging the said order.

3. We draw attention to Note 56 to the standalone financial statements. Government ofIndia has filed a petition with Company Law Board under the Companies Act 1956 seekinginter alia removal and supersession of the Board of Directors of the Company which hasbeen protested by the Company and the matter is pending before CLB for consideration.

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

Other Matters

The financial statements of the Company for the year ended March 31 2014 were auditedby another auditor whose report dated May 30 2014 expressed modified opinion on thosestatements.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor's Report) Order 2015 (the ‘Order')issued by the Central Government of India in terms of Section 143(11) of the Act we givein the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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 standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with rule 7 of theCompanies (Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on March31 2015 taken on record by the board of directors none of the directors is disqualifiedas on March 31 2015 from being appointed as a director in terms of section 164 (2) of theAct.

f) 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 29);

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; and

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

For Sharp & Tannan Associates
Chartered Accountants
Firm's Registration no. 109983W
by the hand of
Tirtharaj Khot
Partner
Mumbai May 22 2015 Membership No. (F) 037457

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in ‘other matters’ and paragraph 1 under ‘Report on otherlegal and regulatory requirements’ of our report of even date)

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management in accordance witha phased programme of verification which in our opinion is reasonable having regard tothe size of the Company and nature of its assets. The frequency of physical verificationis reasonable and no material discrepancies were noticed on such verification.

(ii) According to the process explained to us as followed by the Company the Company'sinventory items are directly delivered to its customers on their procurement. Thereforethe Company does not carry any inventory on a regular basis. Accordingly reporting onParagraph 3 (ii) (a) (b) and (c) is not required. On the basis of our examination in ouropinion the Company has maintained proper records of its inventories.

(iii) The Company has not granted any loans secured or unsecured to companies firmsor other parties covered in the register maintained under Section 189 of the Act.Accordingly the Paragraph 3 (iii) (a) and (b) of the Order are not applicable.

(iv) On the basis of verification of transactions carried out by us we report thatthere is an adequate internal control system commensurate with the size of the Company andthe nature of its business for the purchase of inventory and fixed assets and the sale ofgoods and services. Further we have neither come across nor have been informed of anycontinuing failure to correct major weaknesses in internal control system.

(v) According to the information and explanations given to us and records verified byus the Company has not accepted any deposits during the year from the public to which thedirectives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 andany other relevant provisions of the Act and the rules framed thereunder apply.Accordingly the Paragraph 3 (v) of the Order is not applicable.

(vi) The Central Government has not prescribed maintenance of cost records underSection 148(1) of the Act. Accordingly the Paragraph 3 (vi) of the Order is notapplicable.

(vii) (a) According to the records verified by us the Company is generally regular indepositing undisputed statutory dues including provident fund investor education andprotection fund employees' state insurance income tax sales tax wealth tax servicetax customs duty excise duty value added tax cess and other material statutory duesas applicable to the Company with the appropriate authorities. There are no arrears ofoutstanding statutory dues as at the last day of the financial year for a period of morethan six months from the date they became payable.

(b) According to the information and explanations given to us and the records of theCompany examined by us the details of dues of income tax sales tax service tax andexcise duty as at March 31 2015 which have not been deposited on account of a disputepending are as under:

Name of Statute Nature of Dues Amount involved* (Rs. Lakhs) Period to which the amount relates Forum where dispute is pending
Finance Act 1994 Service Tax 165.92 2007-2008 Commissioner of Service Tax
Central Excise Act1944 Excise duty #221.60 2005-2006 Superintendent Central Excise
Maharashtra Value Added Tax Act 2002 Value Added Tax 124.90 2005-2006 to 20102011 Joint Commissioner of Sales Tax (Appeal)
Central Sales Tax Act 1956 Central Sales Tax 3.12 2006-2007 Joint Commissioner of Sales Tax (Appeal)
Income-Tax Act 1961 Income-tax 592.17 AY 2009 -2010 Commissioner of Income Tax (Appeals)

*Amounts are net of pre-deposit paid in getting the stay/ appeal admitted if any;

# amount is including interest.

(c) During the year there has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company in accordancewith the relevant provisions of the Companies Act 1956 and the rules made thereunder.

(viii) Without considering the possible effects of our audit qualification reported inthe ‘Basis for Qualified Opinion' in our accompanying Audit Report which is notquantifiable the Company does not have accumulated losses as at March 31 2015 and it hasnot incurred cash losses during current financial year and in the immediately precedingfinancial year.

(ix) According to the information and explanations given to us and as per the recordsof the Company examined by us the Company has not defaulted in repayment of dues tobanks. The Company has neither availed any assistance from financial institutions nor hasissued any debentures. Accordingly the additional reporting under Paragraph 3 (ix) of theOrder is not applicable.

(x) In our opinion and according to the information and explanations given to us theterms and conditions of the guarantees given by the Company for loans taken by itssubsidiary companies from banks and financial institutions are not prima facieprejudicial to the interests of the Company.

(xi) During the year the Company has not availed any additional term loan. As per therecords of the Company examined by us there has been no additional utilization of theterm loan being external commercial borrowing by the Company during the year.

(xii) Except for the matter(s) referred in the ‘Basis for Qualified Opinion' ofour audit report which are subjudice and hence are inconclusive to the best of ourknowledge and according to the information and explanations gives to us no fraud by theCompany and no material fraud on the Company has been noticed or reported during the year.

For Sharp & Tannan Associates
Chartered Accountants
Firm's Registration no. 109983W
by the hand of
Tirtharaj Khot
Partner
Mumbai May 22 2015 Membership No. (F) 037457