TO THE MEMBERS OF
ATLAS JEWELLERY INDIA LIMITED Report on the Audit of the Financial Statements Opinion
We have audited the accompanying financial statements of Atlas Jewellery India Limited
(the "Company"), which comprise the Balance Sheet as at March 31, 2021, the
Statement of Profit and Loss (including Other Comprehensive Income), the Statement of
Changes in Equity and the Statement of Cash Flows for the year ended on that date and a
summary of significant accounting policies and other explanatory information (hereinafter
referred to as the "financial statements").
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects or possible effects of the matter described in the
Basis for Qualified Opinion section of our report, the aforesaid financial statements give
the information required by the Companies Act, 2013 (‘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, 2021,
the Loss and total comprehensive income, changes in equity and its cash flows for the year
ended on that date.
Basis for Qualified Opinion
A. Non-provision of the expected credit loss/impairment
The Company has not recognized provision for the expected credit loss/ impairment as
required under Ind-AS 109 relating to overdue overseas Trade Receivables - "M/S Satwa
Precious Metals & Bullion Trading (FZE)" of INR 15,270.23 Lakh (including
unrealized foreign currency exchange gain of INR 2,569.31 Lakh as per Ind AS 21). There
have been defaults in payment obligations by this overseas debtor on due date, which is
outstanding for more than six years. The matter is pending before the Court and the
recovery of this trade receivable is dependent upon outcome of the Court proceedings
initiated by the Company. Also, the Company has applied to RBI for further extension of
the timeline for realization of export proceeds (which was earlier granted up to 28th
February 2021), the same has not yet been granted. In our opinion, as a consequence of no
provision and non-recovery of trade receivables, the outstanding amount of the trade
receivables in the financial statements would have decreased by INR 15,270.23 Lakh and
would become INR 8.31 Lakh, accordingly the loss for the year would increase by INR
15,270.23 Lakh and would become loss of INR 15,770.37 Lakh; and retained earnings under
other equity would have decreased by INR 15,270.23 Lakh and would become negative.
B. Material Uncertainty related to going concern
The Companys operating results have been materially affected due to various factors
including non-realization of overseas trade receivables (which constitute more than 90% of
the total assets), notional unrealized foreign exchange gain/loss on overseas debtor,
reliance on cash sales for meeting out expenses and pending income tax demands with Income
Tax Authorities. These facts/events cause significant doubts on the ability of the Company
to continue as a going concern which is not only dependent on recoveries from overseas
trade receivable but also on the Companys ability to raise adequate finance from
alternative means to meet its obligations as and when they arise and as well as to
establish consistent business operation. In the absence of any convincing audit evidences
regarding certainty and time frame for recovery from trade receivables, outcome of pending
legal action initiated against debtor, impact of actions and forthcoming actions that may
be taken by income tax department cause a material uncertainty related to going concern as
stated above, our opinion is qualified to that extent due to their effects or possible
cumulative effect on the financial statements.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations
given to us, subject to the possible effects of the matters described in the Basis for
Qualified Opinion paragraphs, the 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 March 31, 2021, its losses, and its cash flows for the year ended on that date.
Emphasis of Matters
We draw attention to
i) Valuation of Inventory is based on determination of estimated net realizable value
and specific identification involving technical judgment of management and which has been
relied upon by us.
ii) Refer to Note No. 1( C) to the financial statements, which describes uncertainties
due to the outbreak of COVID - 19 pandemic, the company operations were impacted as all
its showrooms and offices were closed. The impact of these uncertainties on the Companys
operations is significantly dependent on future developments.
Our opinion is not modified in respect of above stated matters.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. We
have determined the matters described below to be the key audit matters to be communicated
in our report:
1. Due to the second wave of Covid - 19 pandemic and lockdowns imposed by the State
Governments and local authorities, the audit has been conducted remotely, through
coordination and obtaining information and data online in our Office located in Delhi
which has limited our ability to verify physically the documents/files and internal
controls. We have relied on various statements, data and information provided online by
the accounts team in our Office in Delhi. Under these circumstances, the opinion expressed
in the present report is based on the limited information, facts and input made available
to us in soft copy through electronic mails by the Company.
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information. The other
information comprises the information included in the Management Discussion and Analysis,
Boards Report including Annexures to Boards Report, Business Responsibility Report,
Corporate Governance and Shareholders Information, but does not include the financial
statements and our auditors 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 we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Managements Responsibilities for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in section
134(5) of the Act with respect to the preparation of these financial statements that give
a true and fair view of the financial position, financial performance, including other
comprehensive income, changes in equity and cash flows of the Company in accordance with
the Ind AS and other 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 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 financial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or
error.
In preparing the 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.
The Board of Directors are responsible for overseeing the Companys financial reporting
process.
Auditors Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 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 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 financial control 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 the 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 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
with relevant 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, we 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.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and except for the effects or possible effects of the matters
described in the Basis for Qualified Opinion paragraph, obtained all the information and
explanations which to the best of our knowledge and belief were necessary for the purpose
of our audit;
b) Except for the effects or possible effects of the matters described in the Basis for
Qualified Opinion, in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those books;
c) The Balance Sheet, Statement of Profit and Loss including Other Comprehensive
Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this
Report are in agreement with the books of accounts;
d) Except for the effects or possible effects of the matters described in Basis for
Qualified Opinion paragraph, the aforesaid financial statements comply with the Accounting
Standards specified under section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014, Companies (Indian Accounting Standards) Rules, 2015, as amended;
e) The matters described in the Basis for Qualified Opinion paragraph and Emphasis of
Matters paragraph above, in our opinion, may have an adverse effect on the functioning of
the Company;
f) On the basis of written representations received from the directors as on March 31,
2021, and taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2021, from being appointed as a director in terms of Section 164(2) of the
Act;
g) 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" to this report;
h) 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.
i) 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, as amended in
our opinion and to the best of our information and according to the explanations given to
us:
(a) Except for the effects or possible effects of the matter described in the Basis for
Qualified Opinion paragraph and Emphasis of Matter paragraph, the Company has disclosed
the impact of pending litigations on its financial position in its financial statements;
(b) The Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term contracts including
derivative contracts;
(c) There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company
2. As required by the Companies (Auditors Report) Order, 2016 ("the Order")
issued by the Central Government in terms of Section 143(11) of the Act, we give in
"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the
Order.
| For Tarun Kandhari & Co LLP |
|
| Chartered Accountants |
|
| FRN - 006108C/N500042 |
|
|
Sd/- |
|
Renu Suri |
|
Partner |
| Place: New Delhi |
M No. 091662 |
| Date: 11th August 2021 |
UDIN: 21091662AAAACI4A33 |
ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 (f) under ‘Report on Other Legal and Regulatory
Requirements section of our report to the Members of Atlas Jewellery India 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 Atlas
Jewellery India Limited (the "Company") as of March 31, 2021 in conjunction with
our audit of the Ind AS financial statements of the Company for the year ended on that
date.
Managements Responsibility for Internal Financial Controls
The Management 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 (the "ICAI"). 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 companys 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.
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 ICAI 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 auditors 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 qualified audit opinion on the Companys internal financial
controls 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
(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
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 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 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 Tarun Kandhari & Co LLP |
|
| Chartered Accountants |
|
| FRN - 006108C/N500042 |
|
|
Sd/- |
|
Renu Suri |
|
Partner |
| Place: New Delhi |
M No. 091662 |
| Date: 11th August 2021 |
UDIN: 21091662AAAACI4A33 |
ANNEXURE ‘B TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory
Requirements section of our report to the Members of Atlas Jewellery India Limited of
even date)
i. In respect of the Companys fixed assets:
(a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
(b) As explained to us, fixed assets have been physically verified by the management at
regular intervals, which in our opinion is reasonable, having regard to the size of the
company and nature of its business. No material discrepancies were noticed on such
physical verification;
(c) According to the information and explanations given to us and the records (lease
and license agreement) examined by us, in respect of immovable properties that been taken
on lease and disclosed as property, plant and equipment in the Ind AS financial
statements, the lease agreements are in the name of the Company.
ii. In respect of its inventories:
(a) The Inventories of the Company have been physically verified by the management at
reasonable intervals during the year.
(b) The discrepancies between physical stocks and the book stocks, which have been
properly dealt with, were not material.
iii. The Company has not granted any loan, secured or unsecured to companies, firms
Limited Liability partnerships or other parties covered in the Register maintained under
section 189 of the Act. Accordingly, the provisions of clause 3 (iii) (a) to (C) of the
Order are not applicable to the Company and hence not commented upon
iv. In our opinion and according to the information and explanations given to us, the
company has not made any loans, investments, guarantees and security as per the provision
of section 185 and 186 of the Companies Act, 2013.
v. The company has not accepted deposits during the year and does not have any
unclaimed deposits as at March 31, 2021 and therefore, the provisions of the clause 3 (v)
of the Order are not applicable to the Company.
vi. The maintenance of cost records has not been specified by the Central Government
under section 148(1) of the Companies Act, 2013 for the business activities carried out by
the Company. Thus, reporting under clause 3(vi) of the order is not applicable to the
Company.
vii. According to the information and explanations given to us, in respect of statutory
dues:
(a) The Company has generally been regular in depositing undisputed statutory dues,
including Provident Fund, Employees State Insurance, Income Tax, Goods and Service Tax,
Customs Duty, Cess and other material statutory dues applicable to it with the appropriate
authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employees
State Insurance, Income Tax, Goods and Service Tax, Customs Duty, Cess and other material
statutory dues in arrears as at March 31, 2021 for a period of more than six months from
the date they became payable.
(c) Details of dues of Income Tax, Sales Tax, Service Tax, Excise Duty, Value Added Tax
and Goods and Service Tax which have not been deposited as at March 31, 2021 on account of
dispute are given below:
| Nature of the statute |
Nature of Dues |
Forum where Dispute is Pending |
Period to which the Amount Relates |
Amount Lakh |
| The Income Tax Act, 1961 |
Income Tax |
ITAT |
A.Y. 2014-15 |
39.07 |
|
Income Tax |
Income Tax Authority upto Commissioners Level for Appeal |
A.Y. 2017-18 |
199.13 |
viii. The Company has not taken any loans or borrowings from financial institutions,
banks and government or has not issued any debentures. Hence reporting under clause 3
(viii) of the Order is not applicable to the Company.
ix. The Company has not raised money by way of initial public offer or further public
offer (including debt instruments) or term loans and hence reporting under clause 3 (ix)
of the Order is not applicable to the Company.
x. For the year ended March 2021, the company had identified one case of
misappropriation and recovered Rs.12,06,239/ - and the balance recoverable amount as on
31.03.2021 stands at Rs.27,28,529/-. The company further under its fidelity cover of Rs.5
Crore had already filed a claim with the insurance company as well as police complaint
regarding the same.
xi. In our opinion and according to the information and explanations given to us, the
managerial remuneration has been paid or provided in accordance with the requisite
approvals mandated by the provisions of section 197 read with Schedule V to the Act
xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the
Order is not applicable to the Company.
xiii. The Company has not made any related party transactions prescribed with the
provision of section 177 and 188 of the Companies Act 2013.
xiv. During the year, the Company has not made any preferential allotment or private
placement of shares or fully or partly paid convertible debentures and hence reporting
under clause 3 (xiv) of the Order is not applicable to the Company.
xv. In our opinion and according to the information and explanations given to us,
during the year the Company has not entered into any non-cash transactions with its
Directors or persons connected to its directors and hence provisions of section 192 of the
Companies Act, 2013 are not applicable to the Company.
xvi. The Company is not required to be registered under section 45-IA of the Reserve
Bank of India Act, 1934.
| For Tarun Kandhari & Co LLP |
|
| Chartered Accountants |
|
| FRN - 006108C/N500042 |
|
|
Sd/- |
|
Renu Suri |
|
Partner |
| Place: New Delhi |
M No. 091662 |
| Date: 11th August 2021 |
UDIN: 21091662AAAACI4A33 |
+91-9892691696
