REPORT TO THE MEMBERS OF MILESTONE FURNITURE LIMITED
Disclaimer of Opinion
We were engaged to audit the financial statements of MILESTONE FURNITURE LIMITED
("the entity"), which comprise the balance sheet as at March 31, 2023, the
statement of Profit and Loss, and statement of cash flows for the year then ended, and
notes to the financial statements, including a summary of significant accounting policies.
We do not express an opinion on the accompanying Ind AS financial statements of the
entity. Because of the significance of the matters described in the Basis for Disclaimer
of Opinion section of our report, we have not been able to obtain sufficient appropriate
audit evidence to provide a basis for an audit opinion on these financial statements.
Basis for Disclaimer of Opinion
We were appointed as auditors of MILESTONE FURNITURE LIMITED on 3rtf July
2023.There was a transition in the ownership and management of the said company as on
09.02.2023. The process of transition was not formal ie without any written agreement
between the parties concerned. The New Owners and Management did not get a formal Handover
from the Old owners and management. Further due to continuous communication gap between
the two, the New Owners and Management are unable to themselves comment or provide
verifiable evidence on the reliability of assets, liability and results of Financial
Operations. As on the date of our report the New management is still in the process of
seeking clarity on the financial position and operation of the Company from the previous
management and alternate means.
In view of the same we do not express an opinion on the accompanying financial
statements of the company. Because of the significance of the matter described above, we
have not been able to obtain sufficient appropriate audit evidence to provide a basis for
an audit opinion on these financial statements.
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the preparation of the other
information. The other information comprises the information included in the Boards
Report including Annexures to Boards Report, 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.
Responsibilities of Management and Those Charged with Governance for the Standalone
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 Ind AS 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 accounting principles generally accepted in India, including the Indian
Accounting Standards ("Ind AS") notified under Section 133 of the Act read with
the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.
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 Ind AS
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, the Board of Directors 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
the Board of Directors 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 responsibility is to conduct an audit of the entitys financial statements in
accordance with Standards on Auditing and to issue an auditors report. However, because
of the matters described in the Basis for Disclaimer of Opinion section of our report, we
were not able to obtain sufficient appropriate audit evidence to provide a basis for an
audit opinion on these financial statements. We are independent of the entity in
accordance with the ethical requirements in accordance with the requirements of the Code
of Ethics issued by ICAI and the ethical requirements as prescribed under the laws and
regulations applicable to the entity.
Report on Other Legal and Regulatory Requirements
1, As required by the Companies (Auditors Report) Order, 2016 ("the Order"),
as amended, issued by the Central Government of India in terms of sub-section (11) of
section 143 of the Act, we give in the "Annexure A" 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. As described in the Basis for Disclaimer of Opinion paragraph, we sought but were
unable to obtain all the information and explanations which to the best of our knowledge
and belief were necessary for the purpose of our audit;
b. Due to the possible effects of the matter described In the Basis for Disclaimer of
Opinion paragraph, we are unable to state whether 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. Due to the possible effects of the matter described in the Basis for Disclaimer of
Opinion paragraph, we are unable to state whether the Balance Sheet and the Statement of
Profit and Loss including other comprehensive income, the Cash Flow statement and the
statement of changes in equity dealt with by this Report are in agreement with the books
of account;
d. Due to the possible effects of the matter described in the Basis for Disclaimer of
Opinion paragraph, we are unable to state whether the Balance Sheet, Statement of Profit
and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books
of account.
e. Due to the possible effects of the matter described in the Basis for Disclaimer of
Opinion paragraph, we are unable to state whether the aforesaid financial statements
comply with the Accounting Standards under Section 133 of the Act read with Rule 7 of the
Companies (Accounts) Rules, 2014.
f. The matter described in the Basis for Disclaimer of Opinion paragraph above, in our
opinion, may have an adverse effect on the functioning of the Company.
g. Due to the possible effects of the matter described in the Basis for Disclaimer of
Opinion paragraph, we are unable to state whether any of the directors are disqualified as
on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the
Act.
h. With respect to adequacy of the internal financial control over the financial
reporting of the company and the operating effectiveness of such controls, refer to our
separate report in "Annexure B"
i. Due to the possible effects of the matter described in the Basis for Disclaimer of
Opinion paragraph, we are unable to state whether there is any violation of the provisions
of section 197 read with Schedule V to the Act, regarding managerial remuneration.
j. 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 information and according to the explanations given to us:
i. Due to the possible effects of the matter described in the Basis for Disclaimer of
Opinion paragraph, we are unable to state whether the Company has disclosed the impact of
pending litigations on its financial position in its financial statement;
ii. Due to the possible effects of the matter described in the Basis for Disclaimer of
Opinion paragraph, we are unable to state whether 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;
iii. There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company.
^Aanexure A" to.the Independent Auditors Report (Referred to in paragraph 1 under
the heading Report on Other Legal & Regulatory Requirement of our report of even
date to the financial statements of the Company for the year ended March 31, 2023)
Anncxure - A to the Auditors Report ( Figure in thousands)
The Annexure A referred to in Independent Auditors Report to the members of the
Company on the standalone financial statements for the year ended 31 March 2023, we report
that;
1) (a) We have not been able to obtain sufficient appropriate audit evidence as already
specified in the Basis for Disclaimer of Opinion paragraph to comment on existence,
valuation, Maintainence of records, physical verification, ownership and revaluation of
Property, Plant and Equipment as shown in the Financial Statements
(b) No proceedings have been initiated or are pending against the company for holding
any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and
rules made thereunder.
2) (a) Due to the possible effects of the matter described in the Basis for Disclaimer
of Opinion paragraph, we are unable to give an opinion on existence, ownership, valuation
and verification of Inventory as shown in the financial statements as on 31.03.2023.
(b) Due to the possible effects of the matter described in the Basis for Disclaimer of
Opinion paragraph we are unable to comment on whether during the year the company has been
sanctioned any working capital limits in excess of five crore rupees, in aggregate, from
banks or financial institutions on the basis of security of current assets .
3) Due to lack of credible audit evidence we are not in position to comment on whether
whether during the year the company has made investments in, provided any guarantee or
security or granted any loans or advances in the nature of loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships or any other parties.
4) Due to lack of credible audit evidence we are not in position to comment on whether
the company has advanced any loans, investments, guarantees, and security, in violation of
provisions of section 185 and 185 of the Companies Act.
5) In absence of appropriate audit evidence we are unable to comment on whether the
Company has accepted any deposits in violation of provisions of Section 73 and 76.
6) The maintenance of cost records as specified by the Central Government under
subsection (1) of section 148 of the Companies Act is not applicable on the Company.
7) (a) In absence of appropriate audit evidence we are unable to state whether the
company is regular in depositing undisputed statutory dues including Goods and Services
Tax, provident fund, employees state insurance, income-tax, duty of customs, value added
tax, cess and any other statutory dues to the appropriate authorities and on whether there
are any arrears of outstanding statutory dues as on the last day of the financial year
concerned for a period of more than six months from the date they became payable.
(b) Due to lack of audit evidence we cannot comment on whether there are any Statutory
dues referred to in sub-clause (a) that have not been deposited on account of any dispute.
8) Due to lack of credible audit evidence we are not in position to comment on whether
there are any transactions not recorded in the books of account that have been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act,
1961 (43 of 1961).
(9) (a) We have not been able to obtain sufficient appropriate audit evidence as
already specified in the Basis for Disclaimer of Opinion paragraph to comment on default
in payment of loans and borrowings by the Company, whether the Company has been declared a
willful defaulter by banks and Financial Institutions, diversion and term of use of Loan
funds.
(b) Due to lack of credible audit evidence we are not in position to comment on whether
whether the company has taken any funds from any entity or person on account of or to meet
the obligations of its subsidiaries, associates or joint ventures.
(c ) In absence of appropriate audit evidence we are unable to state whether the
company has raised loans during the year on the pledge of securities held in its
subsidiaries, joint ventures or associate companies
10) (a) The Company during the year has not raised any money by way of initial public
offer or further public offer (including debt instruments) therefore clause relating to
diversion of said funds is not applicable.
(b) The company during the year has not made any preferential allotment or private
placement of shares or convertible debentures (fully, partially or optionally convertible)
during the year.
11) (a) We have not been able to obtain sufficient appropriate audit evidence as
already specified in the Basis for Disclaimer of Opinion paragraph to comment on fraud by
the company or fraud on the company during the year.
(b) Due to lack of credible audit evidence we are not in position to comment whether
any report under sub-section (12) of section 143 of the Companies Act has been filed by
the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors)
Rules, 2014 with the Central Government;
(c) Due to lack of audit evidence we cannot comment on whether any whistle-blower
complaints, have been, received during the year by the company;
12) The Company is not a Nidhi Company defined under section 406 of Companies Act 2013
13) Due to lack of audit evidence wc cannot comment on whether transactions with the
related parties are in compliance with section 177 and 188 of Companies Act, 2013 and
whether the details thereof have been disclosed in the financial Statements as required by
the applicable accounting standards.
14) (a) We have not been able to obtain sufficient appropriate audit evidence as
already specified in the Basis for Disclaimer of Opinion paragraph to comment on whether
the company has an internal audit system commensurate with the size and nature of its
business.
(b) Due to the possible effects of the matter described in the Basis for Disclaimer of
Opinion paragraph we could not consider the reports of the Internal Auditors for the
period under audit.
15) Due to lack of audit evidence we cannot comment on whether the company has entered
into any non-cash transactions with directors or persons connected with him.
16) (a) The company is not required to be registered under section 45-IA of the Reserve
Bank of India Act, 1934 (2 of 1934)
17) The company has incurred cash losses of 150in the current financial year and 13,698
in the / immediately preceding financial year.
18) Due to lack of audit evidence and lack of communication with the previous Auditor
we cannot comment on whether there has been a resignation of the statutory auditors during
the year and circumstances of it.
19) We have not been able to obtain sufficient appropriate audit evidence as already
specified in the Basis for Disclaimer of Opinion paragraph to comment on whether there is
any material uncertainty on the date of the audit report that company is 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.
20) Provisions of section 135 of the Companies Act 2013 relating to CSR activities
regarding are not applicable on the Company
21) Reporting on any qualifications or adverse remarks by the respective auditors in
the Companies (Auditors Report) Order (CARO) reports of the companies included in the
consolidated financial statements is not applicable in case of standalone financial
statements
"Annexure B" to the Independent Auditors Report (Referred to in paragraph
2(f) of the independent auditors report of even date on the financial statements of the
company for the year ended March 31, 2023.)
Report on the Internal Financial Controls 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 MILESTONE
FURNITURE LIMITED ("the Company") as of March 31, 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 are 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" (the "Guidance Note") issued by the Institute of
Chartered Accountants of India ("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 Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting 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) and the Standards on Auditing, to the extent applicable to an audit
of internal financial controls, both issued by the Institute of Chartered Accountants of
India and deemed to be prescribed under section 143(10) of the Act to the extent
applicable to an audit of internal financial controls both applicable to an audit of
Internal Financial Controls and, both issued by the Institute of Chartered Accountants of
India. 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 audit opinion on the Companys 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 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 authorisations 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
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
Due to the possible effects of the matter described in the Basis for Disclaimer of
Opinion paragraph, we are unable to state whether 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, 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 S. Agarwal & Co. Chartered Accountants FRN:
000808N |
| S.N. Agarwal Place: New Delhi (Partner) Date: 04-08-2023
M. No. : 012103 Udin: 23012103BGTOAE9891 |
+91-9892691696
