Independent Auditor’s Report

 Independent Auditor’s Report

 

To the Members of _________ Private Limited/ Limited

Report on the Audit of the Standalone Financial Statements

 

Opinion

 

We have audited the accompanying standalone financial statements of __________Limited, which comprise the balance sheet as at 31st March 2021, and the statement of profit and loss and cash flow for the year then ended, and a summary of significant accounting policies and other explanatory information.

 

In our opinion and to the best of our information and according to the explanations given to us, the  aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2021 and its profit for the year ended on that date.

 

Basis of Opinion

 

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

 

Information Other than the Financial Statements and Auditor’s Report Thereon

 

• The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Board's report, but does not include the financial 

statements and our auditor’s report thereon.

• Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon 

• In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. 

• If based on the work performed on the other information that we have obtained prior to the date of this auditor’s report, we conclude that is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard. 

 

Management’s Responsibility for the Standalone Financial Statements

 

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flow of the Company in accordance with the accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets ofthe Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent and relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

 

In preparing the standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

 

The Board of Directors are responsible for overseeing the Company’s financial reporting process.

 

Auditor’s Responsibility

 

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

 

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion 

on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

 

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

 

Report on Other Legal and Regulatory Requirements

 

1. As required by the Companies (Auditor’s Report) Order, 2016 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

 

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 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 been kept by the Company 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 statement dealt with by this Report are in agreement with the books of account;

 

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

 

(e) On the basis of the written representations received from the directors as on 31 March 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021 from being appointed as a director in terms of Section 164 (2) of the Act; and

 

(f) With respect to the adequacy of internal financial controls over financial reporting of the Company and the operating effectiveness of such controls is not applicable.

 

Or

 

With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

 

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of Section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. OR

 

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the Company has not paid / provided any remuneration to its directors during the year and hence the provisions of section 197(16) of the Companies Act, 2013 is not applicable to the Company.

 

(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its financial statements;

 

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses and

 

iii. There were no amounts which were , required to be transferred, to the Investor Education and Protection Fund by the Company.

 

For ____________.

Chartered Accountants

FRN: __________W

 

 

_____________ 

Name:

Membership NO

Place: 

City:

UDIN :

 

Annexure A to the Independent Auditors’ Report

 

The Annexure referred to in our Independent Auditors’ Report to the members of the Company on the standalone financial statements for the year ended 31st March 2021, we report that:

 

(i) (a) As per information and explanation given to us, the Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets (property, plant and equipment)

 

(b) The Company has a regular program of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

 

(ii) (a) The physical verification of inventory has been conducted at reasonable intervals by the management;

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business;

 

(C) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification;

 

(iii)The Company has not granted loans to bodies corporate covered in the register maintainedunder section 189 of the Companies Act, 2013.

 

(iv) The company has complied with the provisions of section185 and 186 of the Companies Act, 2013 in respect of loans, investment guarantees and security, to the extent applicable.

 

(v) The Company has not accepted any deposits during the year under section 73 to 76 of the Companies Act, 2013 and rules made thereunder.

 

(vi) The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company.

 

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, goods and services tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of employees’ state insurance and duty of excise.

 

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess , goods and services tax and other material statutory dues were in arrears as at 31stMarch 2020 for a period of more than six months from the date they became payable.

 

(c) The amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

 

(viii) The Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders during the year. . In our opinion and according to the information and the explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

 

(ix) . The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Hence reporting under clause 3 (ix) of the order is not applicable to the Company

 

(x) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

 

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not paid / not provided for managerial remuneration in the books of accounts. Accordingly reporting under clause 3 (xi) of the order is not applicable to the Company.

 

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly clause 3 (xii) of the Order is not applicable. 

 

(xiii) According to the information and explanations given to us, all transactions with related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

 

(xiv) The company has not made any preferential allotment or private placement of shares or full or partly convertible debentures during the year under review.

OR

 

(xiv) According to the information and explanations given to us, the Company has made preferential allotment and private placement of shares during the year under review. In respect of the above issue, we further report that

 a) the requirement of Section 42 of the Companies Act, 2013, as applicable, have been complied with; and

 

 b) the amounts raised have been applied by the Company during the year for the purposes for which the funds were raised. The Company has not made preferential allotment or private placement of fully or partly convertible debentures during the year under review

 

(xv) According to the information and explanations given to us and based on our examination of the record of the company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, clause (xv) of the Order is not applicable and hence not commented upon.

(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

 

For ____________.

Chartered Accountants

FRN: __________W

 

 

_____________

Name:

Membership NO

Place: 

City:

UDIN

 

ANNEXURE “B” TO THE INDEPENDENT AUDITOR’S REPORT 

 

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

 

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (“the Act”)

 

We have audited the internal financial controls over financial reporting of ________ Private Limited (“the Company”) as of March 31, 2021 in conjunction with our audit of the non Ind AS/ Ind AS financial statements of the Company for the year ended on that date.

 

Management’s Responsibility for Internal Financial Controls

 

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These 

responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

 

Auditor’s Responsibility

 

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 

Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. 

 

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal 

financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error

 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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 designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that

 

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

 

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

 

(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company'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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 

 

Opinion

 

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2021, based on the criteria for internal financial control over financial reporting established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. 

 

Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions. This is just the draft and do not constitute any legal outcome of any report. The Author is no where responsible and author does not constitute any conclusive report or format and thus shall not be liable in any Circumstances. Just for knowledge purpose.