TO THE MEMBERS OF MODERN SHARES AND STOCKBROKERS LIMITED
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
Opinion
1. We have audited the accompanying standalone financial statements of Modern Shares
& Stockbrokers Limited ("the Company"), which comprises the Balance Sheet as
at March 31, 2023, the Statement of Profit and Loss (including other Comprehensive Income)
for the year then ended, the Cash Flow Statement and the Statement of
Changes in Equity for the year then ended and a summary of the significant accounting
policies and other explanatory information (hereinafter referred to as the
"standalone financial statements").
2. 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 ("the Act") in the manner so required and give a true
and fair view in conformity with the Indian Accounting Standards prescribed under section
133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as
amended, ("Ind AS") and other accounting principles generally accepted in India,
of the state of affairs of the Company as at March, 31, 2023 and its profit, flows and the
changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the
Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013.
Our responsibilities under those Standards are further described in the Auditors
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 together with the ethical requirements that
are relevant to our audit of the financial statements under the provisions of the
Companies Act, 2013 and the Rules thereunder, and we have fulfilled responsibilities in
accordance with these requirements and the 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.
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most
significance in our audit of the standalone financial current period. We have determined
that there are no key audit matters to communicate in our report.
Information Other than the Standalone Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information. The other
information comprises the
Directors Report, but does not include the standalone financial statements and our Our
opinion on the standalone 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 standalone statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the
standalone financial audit or otherwise appears to be materially misstated.
Based on the work we have performed, we conclude that there is no material misstatement
of this other information, which we are required to report. We have nothing to report in
this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone
Financial Statements
1. Comprehensive loss, its cash The Companys 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 to give a true and
fair view of the financial including other comprehensive income, cash flows in accordance
with the Ind AS and other accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014.
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 andour otherethical 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 financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
2. In preparing the standalone financial statements, management is responsible for
assessing the
Companys 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.
Those Board of Directors are also responsible for overseeing the Companys financial
reporting process.
Auditors Responsibilities for the Audit of the 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 auditors 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 financial 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 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 may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances. Under section 143(3)(i)
of the Companies Act, 2013, we are also responsible for expressing our opinion on 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 managements 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 Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the 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 auditors
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 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
standalonestatements.financial statements that, individually or in aggregate, makes it
probable that the economic decisions of a reasonably knowledgeable user of the standalone
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 identifiedmisstatements in the
standalone 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
withastatementthatwehavecompliedwithrelevant ethical 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, weas on March,
31, determine those matters that were of most significance in the audit of the financial
statements of the current period and are therefore the key audit matters. We describe
these matters in our auditors 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. reporting.
Report on Other Legal and Regulatory Requirements
1. As required by ‘the Companies (Auditors Report) Order, 2020, issued by the
Central Government of India in terms of sub-section (11) of section 143 of the Act
(hereinafter referred to as the "Order"), and on the basis of such checks of the
books and records of the Company as we considered appropriate and according to the
information and explanations given to us, we give in 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 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 Other Comprehensive Loss, the Cash Flow
Statement and Statement of Changes in Equity dealt with this Report are in agreement with
the books of account. d) In our opinion, the aforesaid standalone financial statements
comply with the Indian Accounting Standards specified under Section 133 of the Act, read
with Rule 7 of the Companies (Accounts) Rules, 2014 as amended.
e) On the basis of the 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
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 B". Our report expresses an
unmodified opinion on the adequacy and operating effectiveness of the Companys internal
financial controls over financial g) With respect to the other matters to be included in
the Auditors 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 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 the other
matters to be included in the Auditors Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and
belief and according to the information and explanations given to us: i. The Company does
not have any pending litigations as at March 31, 2023 which would impact its financial
position in its Financial Statements. ii. The Company did not have any long-term contracts
including derivative contracts as at March 31, 2023. iii. There has been no delay in
transferring amounts, required to be transferred, to the Investor Education and Protection
Fund by the company. iv. (a) The Management has represented that, to the best of its
knowledge and belief, no funds (which are material either individually or in the
aggregate) have been advanced or loaned or invested (either from 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, whether, 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") guarantee,
security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no
funds (which are material either individually or in the aggregate) 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, whether, directly or indirectly, lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the Funding Party
("Ultimate Beneficiaries") provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate
in the circumstances, nothing has come to our notice that has caused us to believe that
the representations under sub-clause (i) and (ii) of
Rule 11(e), as provided under (a) and (b) above, contain any material misstatement. v.
As stated in the Note 2.38 of the
Standalone Financial Statements The company has not declared or paidor provide any any
dividend during the year as well as in the previous year and has not proposed final
dividend for the year. vi. 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 B D G & CO LLP
Chartered Accountants
FRN: 119739W/W100900 or
Sd/-
Vikas Agarwal
Partner
Membership No. 148465
UDIN: 23148465BGWRJT3451
Place: Mumbai
Date: 19th May, 2023
Annexure A to Independent Auditors Report
(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory
Requirements section of the Independent Auditors Report of even date to the members of
Modern Shares & Stockbrokers Limited on the standalone financial statements as of and
for the year ended March 31, 2023.)
To the best of our information and according to the explanations provided to us by the
Company and the books of account and records examined by us in the normal course of audit,
we state that:
1. In respect of the Companys Property, Plant and Equipment and Intangible Assets: a.
(A) The Company is maintaining proper records showing full particulars, including
quantitative details and situation of Property, Plant and Equipment.
(B) The Company has maintained proper records showing full particulars of intangible
assets. b. The Company has a program of physical verification reasonable intervals so as
to cover all the assets, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. Pursuant to the program, certain Property, Plant and
Equipment were due for verification during the year and were physically verified by the
Management during the year. According to the information and explanations given to us,
no material discrepancies were noticed on such verification. c. The immovable properties,
as disclosed in Note 2.10 on Property, Plant and Equipment to the financial statements,
are held in the name of the Company. d. The Company has not revalued any of its
Property, Plant and Equipment (including right of-use assets) and intangible assets
during the year. e. No proceedings have been initiated during the year or are pending
against the Company as at March 31, 2023 for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.
2. a. The Company is in the business of rendering services, and consequently, does not
hold any physical inventory. Therefore, the provisions of Clause 3(ii) of the said
Order are not applicable to the Company. b. The Company has not been sanctioned working
capital limits in excess of 5 crore, in aggregate, at any points of time during the year,
from banks or financial institutions on the basis of security of current assets and hence
reporting under clause 3(ii)(b) of the Order is not applicable.
3. The Company has made investments in, companies, firms, Limited Liability
Partnerships, but not granted any unsecured loans to other parties, during the year, in
respect of which: a. The Company has not provided any loans or advances in the nature of
loans or stood guarantee, or provided security to any other entity during the year, and
hence reporting under clause 3(iii)(a) of the Order is not applicable. b. In our opinion,
the investments made and the terms and conditions of the investments, during of Property,
Plant and Equipment the year are, prima facie, not prejudicial to the Companys interest.
c. The company has not granted any loans, and hence reporting under clause 3(iii)(c) of
the Order is not applicable. d. The company has not granted any loans, therefore there is
no overdue amount remaining outstanding as at the balance sheet date to other entities. e.
No loan granted by the Company which has fallen due during the year, has been renewed or
extended or fresh loans granted to settle the overdues of existing loans given to the same
parties. f. The Company has not granted any loans or advances in the nature of loans
either repayable on demand or without specifying any terms or period of repayment during
the year. Hence, reporting under clause 3(iii)(f) is not applicable.
The Company has not provided any guarantee or security or granted any advances in the
nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships
or any other parties.
4. The Company has not granted any loans or made any investments, or provided any
guarantees and security to the parties covered under section
185 and 186. Therefore, the provisions of Clause 3(iv) of the said Order are not
applicable to the
Company.
5. The Company has not accepted statements of theany deposits from the public within
the meaning of Sections
73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
6. As informed to us by the management, the Central Government of India has not
specified the maintenance of cost records under subsection (1) of Section 148 of the Act
for any of the services/activities rendered by Company.
7. In respect of statutory dues: a. According to the information and explanations given
to us and according to the records of the Company examined by us, in our opinion, the
Company is generally regular in depositing undisputed statutory dues including Provident
Fund, Income Tax, Goods and Services Tax and any other statutory dues with the appropriate
authorities, wherever applicable.
According to the information and explanation given to us, no undisputed amounts payable
in respect of aforesaid dues were outstanding as at March 31, 2023 for a period of more
than 6 months from the date they became payable. b. According to the information and
explanations given to us and records examined by us, there are no dues of Income Tax,
Goods and Services Tax which have not been deposited on account of any dispute.
8. There were no transactions relating to previously unrecorded income that have been
surrendered or disclosed as income during the year in the tax assessments under the Income
Tax Act, 1961.
9. a. In our opinion, the company has not defaulted in the repayment of loans or other
borrowings or in the payment of interest thereon to any lender during the year. b. The
Company has not been declared wilful defaulter by any bank or financial institution or
government or any government authority.
c. According to the information and explanation given to us, in our opinion, overdraft
facilities availed by the Company were, applied by the Company for the purposes for which
the loans were obtained during the year. d. On an overall examination of the standalone
funds financial raised on short-term basis have, prima facie, not been used for long-term
purposes by the Company during the year. e. On an overall examination of the financial
statements of the Company, the Company has not taken any funds from any entity or person
on account of or to meet the obligations of its subsidiaries and an associate. f. The
Company has not raised loans during the year on the pledge of securities held in its
subsidiaries and associate.
10. a. The Company has not raised any moneys by way of initial public offer, further
public offer (including debt instruments) and term loans. Accordingly, the provisions of
Clause 3(ix) of the Order are not applicable to the Company. b. During the year, the
Company has not made any preferential allotment or private placement of shares or
convertible debentures (fully or partly or optionally) and hence reporting under clause
3(x)(b) of the Order is not applicable.
11. During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing practices in India, and
according to the information and explanations given to us, we have neither come across any
instance of material fraud by the Company or on the Company by its officers or employees,
noticed or reported during the year, nor have we been informed of any such case by the
Management.
12. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable
to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
13. The Company has entered into transactions with related parties in compliance with
the provisions of Sections 177 and 188 of the Act. The details of such related party
transactions have been disclosed in the financial statements as required under Accounting
Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read
with Rule 7 of the Companies (Accounts) Rules, 2014.
14. a. In our opinion the Company has an adequate internal audit system commensurate
with the size and the nature of its business. b. We have considered, the internal audit
reports for the year under audit, issued to the Company during the year and till March
2023, in determining the nature, timing and extent of our audit procedures.
15. The Company has not entered into any non-cash transactions with its directors or
persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are
not applicable to the Company.
16. a. The Company is not required to be registered under Section 45-IA of the Reserve
Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not
applicable to the Company. b. In our opinion, there is no core investment company within
the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016)
and accordingly reporting under clause 3(xvi)(d) of the Order is not applicable.
17. The Company has not incurred cash losses during the financial year covered by our
audit and the year. immediately preceding financial
18. There has been resignation of the statutory auditors of the Company during the
year. There were no issues, observations or concerns raised by the outgoing auditors.
19. On the financialratios, ageing basis of the and expected dates of realization of
financial assets and payment of financial liabilities, other information accompanying the
financial statements and our knowledge of the Board of Directors and Management plans and
based on our examination of the evidence supporting the assumptions, nothing has come to
our attention, which causes us to believe that any material uncertainty exists as on the
date of the audit report indicating that Company is not capable of meeting its liabilities
existing at the date of balance sheet as and when they fall due within a period of one
year from the balance sheet date.
We, however, state that this is not an assurance as to the future viability of the
Company. We further state that our reporting is based on the facts up to the date of the
audit report and we neither give any guarantee nor any assurance that all liabilities
falling due within a period of one yar from the balance sheet date, will get discharged by
the Company as and when they fall due.
20. a. The company does not meet the criteria set in the section 135 of the Companies
Act 2013 regarding the Corporate Social Responsibility accordingly, the unspent amount
towards Corporate Social Responsibility on other than projects requiring a transfer to a
Fund specified the companiesinschedule
Act in compliance with second proviso to a sub-section (5) of section 135 of the said
Act. b. There are no unspent amounts towards
Corporate Social Responsibility (CSR) on the ongoing projects requiring a transfer to a
Fund specified in Schedule VII to the
Companies Act in compliance with second proviso to sub-section (6) of Section 135 of
the said Act. Accordingly, reporting under clause 3(xx)(b) of the Order is not applicable
for the year.
For B D G & CO LLP
Chartered Accountants
FRN: 119739W/W100900
Sd/-
Vikas Agarwal
Partner
Membership No. 148465
UDIN: 23148465BGWRJT3451
Place: Mumbai
Date: 19th May, 2023
Annexure "B" to the Independent Auditors Report
(Referred to in paragraph 2 (f) under ‘Report on other legal and regulatory
requirements section of our report to the Members of Modern Shares & Stockbrokers
Limited of even date) Report on the internal financial controls over financial reporting
under clause (i) of sub section 3 of section 143 of the Companies Act, 2013 ("the
Act") We have audited the internal financial controls over financial reporting of
Modern Shares & Stockbrokers Limited ("the Company") as at 31st March, 2023,
in conjunction with our audit of the financial statements of the Company for the year
ended on that date.
Managements responsibility for internal financial controls
The board of directors of the Company 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, 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.
Auditors responsibility
Our responsibility is to express an opinion on the Companys 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 were 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 auditors judgement, including the assessment of the risks of
material misstatement in 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 Companys internal financial control system over
financial reporting.
Meaning of internal financial controls over financial reporting
A companys 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 companys internal financial control over financial
reporting includes those policies and procedures that (i) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) 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 (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the
companys 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 of 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 and according to the information and explanations given to us, the
Company has, in all material respects, an adequate internal financial control system over
financial reporting and such internal financial controls over financial reporting were
operating effectively as at March 31, 2023, 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.
For B D G & Co LLP
Chartered Accountants
FRN: 119739W/W100900
Sd/-Vikas Agarwal
Partner
Membership No. 148465 UDIN: 23148465BGWRJT3451
Place: Mumbai
Date: 19th May 2023
+91-9892691696
