M/S SURANA TELECOM AND POWER LIMITED
Report on the Audit of Standalone Financial Statements
Opinion
We have audited the accompanying Standalone financial statements of SURANA TELECOM AND POWER LIMITED (“the
Company”), which comprise the Balance Sheet as at 31st March, 2023, the Statement of Profit and Loss (including the
statement of Other Comprehensive Income), the Cash Flow Statement and the statement of change in Equity for the year
then ended and notes to the Standalone Financial Statements, including a summary of the significant accounting policies
and other explanatory information (“The Standalone Financial Statements”).
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 Companies Act, 2013 as amended (‘the Act”) in the manner so
required and give a true and fair view in conformity with accounting principles generally accepted in India, of the state of
affairs of the company as at March 31 , 2023 , of total comprehensive income (comprising of profit and other comprehensive
income), standalone changes in equity andits standalone cash flows for the year ended .
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs)
specified under section 143(10) of the Act. 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 ethical requirements that are relevant to our Audit of the Standalone Financial Statements under the provision 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 obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Standalone Financial Statements.
Emphasis of matter
We draw attention to the following matter:
(a) Note No.52 of the accompanying Standalone Financial Statements wherein, balances under the head Claims
Recoverable, Loans & Advances, Deposits from and with various parties and certain balances of trade receivables,
trade payables and other current liabilities have not been confirmed as at March 31, 2023, although letters have
been sent by the Company seeking confirmation of balances. Consequential impact upon receipt of such confirmation
/ reconciliation / adjustments of such balances, if any is not ascertainable at this stage.
Key Audit Matters
1. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
standalone financial statements of the current period. These matters were addressed in the context of our audit of the
standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided
in that context:
|
Descriptions of Key Audit Matter
|
How we addressed the matter in our audit
|
|
1. Accuracy and completeness of revenue recognized.
Refer to note 25 to the Standalone Financial
Statements, The Company reported revenue of
' 1710.93 Lakhs from sale of solar modules. The
application of revenue recognition accounting standards
is complex and involves a number of key judgments
and estimates. Due to the estimates and judgment and
complexity involved in the application of the revenue
recognition accounting standards, we have considered
this matter as a key audit matter. The Company's
accounting policies relating to revenue recognition
are presented in note 13 to the financial statements.
|
We addressed the Key Audit Matter as follows :-
1. As part of our audit, we understood the Company's
policies and processes, control mechanisms and
methods in relation to the revenue recognition and
evaluated the design and operating effectiveness of
the financial controls from the above through our test
of control procedures.
|
|
Descriptions of Key Audit Matter
|
How we addressed the matter in our audit
|
| |
2.
|
Assessed the Company's revenue recognition
accounting policies in line with Ind AS 115 (“Revenue
from Contracts with Customers”) and tested thereof.
|
| |
3.
|
Review the company's judgment in determining whether
the performance obligation is satisfied at a point in
time or over a period of time.
|
| |
4.
|
Tested a sample of sales transactions for compliance
with the Company's accounting Principles to assess
the completeness and accuracy of revenue recorded.
|
| |
5.
|
We evaluated the management's process to recognize
revenue over a period of time, total cost estimates,
status of the projects and re-calculated the arithmetic
accuracy of the same.
|
| |
6.
|
Evaluated management assessment of the impact on
revenue recognition.
|
| |
7.
|
We examined contracts with exceptions including
contracts with low or negative margins, loss making
contracts, etc to determine the level of provisioning.
|
| |
8.
|
Our tests of detail focused on transactions occurring
within proximity of the year end and obtaining
evidence to support the appropriate timing of revenue
recognition, based on terms and conditions set out in
sales contracts and delivery documents. We considered
the appropriateness and accuracy of any cut-off
adjustments.
|
| |
9.
|
Performed analytical procedures over revenue and
receivables. Compared revenue with historical trends
and where appropriate, conducted further enquiries
and testing.
|
| |
10.
|
Traced disclosure information to accounting records
and other supporting documentation.
|
| |
11.
|
Assessed disclosures in financial statements in respect
of revenue, as specified in Ind AS 115.
|
| |
12.
|
Our Observation:
|
| |
|
Based on the audit procedures performed we did
not identify any material exceptions in the revenue
recognition.
|
|
2. Valuation of Inventories.
|
We addressed the Key Audit Matter as follows
|
|
Refer to note 9 to the Standalone Financial Statements,
the Company is having the Inventories of ' 115.96
Lakhs as on 31st March 2023. As described in the
accounting policies in note 2 to the standalone financial
statements, inventories are carried at the lower of cost
and net realisable value. As a result, the management
applies judgment in determining the appropriate
provisions for obsolete stock based upon a detailed
analysis of old inventory, net realisable value below
cost based upon future plans for sale of inventory.
|
|
We obtained assurance over the appropriateness of
the management's assumptions applied in calculating
the value of the inventories and related provisions
and management assertion regarding existence and
ownership by:-
|
| |
1.
|
Completed a walkthrough of the inventory valuation
process and assessed the design and implementation
of the key controls addressing the risk.
|
|
Descriptions of Key Audit Matter
|
How we addressed the matter in our audit
|
| |
2. Verifying the effectiveness of key inventory controls
operating over inventories;
|
|
3. Reviewing the physical verification documents related
to inventories conducted during the year.
|
|
4. Verifying for a sample of individual products that costs
have been correctly recorded.
|
|
2. Comparing the net realisable value to the cost price of
inventories to check for completeness of the associated
provision.
|
|
3. Reviewing the historical accuracy of inventory
provisioning and the level of inventory write-offs during
the year.
|
|
4. Re-computing provisions recorded to verify that they
are in line with the Company policy.
|
|
5. Our Observation:
Based on the audit procedures performed we did
not identify any material exceptions in the Inventory
valuation and existence.
|
Information Other than the Standalone Financial Statements and Auditor’s Report Thereon
The Company's Board of Directors is responsible for the other information. The other information comprise the information
included in the annual report, but does not include the financial statements and our auditor's report thereon. The annual
report is expected to be made available to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information and we will 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 identified above
when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the
standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be
materially misstated.
When we read the annual report, If we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance and take appropriate action as applicable under the relevant
laws and regulations.
Management Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“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 including other comprehensive income, cash flows and changes in equity of the Company
in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind
AS) specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the companies
(Indian Accounting Standards) Rule, 2015, as amended. This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding of the assets of the 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 design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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 is also responsible for overseeing the company's financial reporting process.
Auditor’s Responsibilities for the Audit of Standalone Financial Statements.
Our objectives are to obtain reasonable assurance about
whether the standalone financial statements as a whole
are free from material misstatement, whether due 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 audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users
taken on the basis of these Standalone financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement
of the standalone financial statements, whether due to
fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error, as fraud any involve collusion,
forgery, intentional omissions, misrepresentations, or
the override of internal control.
• Obtain an understanding of internal financial controls
relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under
section 143(3)(i) of the Act, we are also responsible
for expressing our opinion on whether the Company
has adequate internal financial controls system in place
and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of management's use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the Company's ability
to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures
in the standalone 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's report. However, future
events or conditions may cause the Company to cease
to continue as a going concern.
• Evaluate the overall presentation, structure and content
of the standalone financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in a
manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the
standalone financial statements that, individually or in
aggregate, makes it probable that the economic decisions of
a reasonably knowledgeable user of the financial statements
may be influenced. We consider quantitative materiality
and qualitative factors in (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
financial statements.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with
a statement that we have complied withrelevantethical
requirements regarding independence, and to communicate
with them all relationships and other
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditor's report unless law
or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because
the adverse consequences of doing so would reasonably
be 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,
2023 (the “Order”) issued by the Central Government
of India in terms of sub-section (11) of section 143 of
the Act, we give in the “Annexure B” statement on the
matters Specified in paragraphs 3 and 4 of the Order.
2) As required by section 143(3) of the Act, based on our
audit 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 including the statement of Other
Comprehensive Income, the Cash Flow Statement
and Statement of Changes in Equity dealt with
by this Report are in agreement with the books
of account.
d. In our opinion, the aforesaid financial statements
comply with the Ind AS specified under section
133 of the Act.
e. On the basis of written representations received
from the directors as on March 31, 2023 taken
on record by the Board of Directors, none of the
directors is disqualified as on March 31, 2023
from being appointed as a director in terms of
Section 164(2) of the Act.
f. 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
A”. 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 the explanations given to us,
the remuneration has been paid by the Company
to its directors during the year is in accordance
with the provisions of section 197 of the Act.
h. With respect to 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 Standalone Financial Statements.
(ii) The Company did not have any long-term
contracts including derivative contracts for
which there were any material foreseeable
losses as on March 31,2023 .
(iii) There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund.
(iv) a) The Management has represented to
us, to the best of their knowledge and
belief, no funds have been advanced
or loaned or invested (either from the
borrowed funds or share premium or
any other sources or kind of funds)
by the Company to or in any other
person or entity including foreign
entity (“Intermediaries”), with the
understanding, whether recorded
in writing or otherwise, that the
Intermediary shall directly or indirectly
lend or invest in other persons or
entities identified in any manner
whatsoever by or on behalf of the
Company (“Ultimate beneficiaries”)
or provide any guarantee, security
or the like on behalf of the Ultimate
beneficiaries;
b) The Managementhas represented
to us, to the best of the knowledge
and belief, no funds have been
received by the company from any
person or entity, including foreign
entity (“Funding parties”) with the
understanding, whether recorded in
writing or otherwise, that the Company
shall directly or indirectly, lend or invest
in other persons or entities identified
in any manner what's the whatsoever
by or on behalf of the funding party
(“Ultimate beneficiaries') or provide
any guarantee, security or the like on
behalf of the Ultimate Beneficiaries;
and
c) Based on audit procedures that have
been considered reasonable and
appropriate in the circumstances
performed by us on the Company,
nothing has come to our notice that
has caused us to believe that the
representations are under sub clause
(i) and (ii) of Rule 11(e), as provided
under (a) and (b) above, contain any
material misstatement
3) The company has not declared any dividend in the
previous financial year which has been paid in current
year. Further, no dividend has been declared/ proposed
for the current year accordingly the section 123 of the
Act is not applicable to the company.
4) Proviso to Rule 3(1) of the Companies (Accounts)
Rules, 2014 for maintaining books of account using
accounting software which has a feature of recording
audit trail (edit log) facility is applicable to the company
with effect from April 1, 2023, and accordingly, reporting
under Rule 11(g) of Companies (Audit and Auditors)
Rules, 2014 is not applicable for the financial year
ended March 31, 2023.
For Luharuka & Associates
Chartered Accountants
Firm Reg No: - 01882S
Naveen Lohia
(Partner)
Place: Secunderabad Membership No.: 214548
Date: 30th May, 2023 UDIN: 23214548BGWOPL7093
|