To The Members of
20 Microns Limited Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of 20 Microns Limited(the Company') which comprise the Balance Sheet as at March. 312021 theStatement of Profit and Loss (including other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and a summary ofsignificant accounting policies and other explanatory information (herein after referredto as standalone financial statements'). In our opinion and to the best of ourinformation and according to the explanations given to us the aforesaid standalonefinancial statements give the information required by the Companies Act 2013 ("theAct") in the manner so required and give a true and fair view in conformity with theIndian Accounting Standards prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended ("Ind AS") andother accounting principles generally accepted in India of the state of affairs of theCompany as at March. 31 2021 the profit and total comprehensive income changes inequity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto 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 judgment were of mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Sr.No. Key Audit Matter ||Auditor's Response |
|1. Aspects of Revenue Recognition ||Our audit approach was a combination of test of internal controls and substantive procedures which included the following: |
|The Company has large product and customer portfolio and multiple business locations. The nature of the risk associated with the accurate recording of revenue varies. We recognise that revenue is a key metric upon which the Company is judged that the Company has annual internal targets and that the Company has incentive schemes that are partially impacted by revenue growth. We have determined that there is a risk of material misstatement in recognition of revenue considering the above. We have determined this to be a key audit matter in view of exercise of management judgement and estimates and the significance of the amounts involved. || |
| || We evaluated the design of internal controls relating to revenue recognition. |
| || We performed full and specific scope audit procedures over this risk area in major locations which covered majority of the risk amount. |
| || We assessed the processes and tested controls over each significant revenue stream. We carried out a combination of procedures involving enquiry and observation reperformance and inspection of evidence in respect of operation of the controls. |
| || We evaluated the appropriateness of journal entries impacting revenue as well as other adjustments made in the preparation of the standalone financial statements. We considered unusual journals such as those posted outside of expected days or by unexpected individuals. |
| || We also evaluated management's controls over such adjustments. |
| || We inspected a sample of contracts to check that revenue recognition was in accordance with the contract terms and the Company's revenue recognition policies. |
| || We tested a sample of transactions around period end to test that revenue was recorded in the correct period. |
| || For revenue streams which have judgemental elements we evaluated management's assumptions. Basis the procedures performed we have not noted any significant exceptions in the management assessment of Revenue Recognition. |
|2. Assessment of contingencies in respect of statutory claims and claims against company not acknowledged as debt ||Our procedures included the following: |
|The company has various ongoing material uncertain statutory claims and claims against company not acknowledged as debt under dispute. Refer Note 41 to the Standalone Financial Statements. || Understanding and evaluating the design of operating effectiveness of controls in respect of the legal matters. Reading the orders received by the company from authorities. |
|The assessment of the likely outcome of the matters and related outflow of resources involves significant judgement on the positions taken by the management which are based on the application and interpretation of law. || Discussing ongoing matters under dispute and developments with the management and the audit committee. |
|We have considered these matters to be a key audit matter given the materiality of the potential outflow of economic resources and uncertainty of the possible outcome. || Where relevant reading opinions of Managements' external consultants on the tax matters. |
| || Independently assessing the Management's judgement on contingencies and provisions of statutory claims and other claims. |
| || Assessing adequacy of disclosure in the standalone financial statements. |
| ||Based on the above procedures the management's assessment of contingencies in respect of statutory claims and claims against company not acknowledged as debt was considered to be appropriate. |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon. The Board'sReport and Shareholder's Information is expected to be made available to us after the dateof this auditor's report. Our opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusionthereon. In connection with our audit of the standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. When we read the Board's Report and Shareholder's Information if weconclude that there is a material misstatement therein we are required to communicate thematter to those charged with governance as required under SA 720 The Auditor'sresponsibilities Relating To Other Information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Financial Statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Ind AS specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate implementationand maintenance of accounting policies; making judgements and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error. In preparing the StandaloneFinancial Statements management is responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.
The Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3) (i) ofthe Companies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
- Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the publiRs. 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 obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the statement of Cash Flow dealt with bythis Report are in agreement with the books of account.
d) In our opinion the aforesaid Standalone Financial Statements comply with the Ind ASprescribed under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March.31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March. 31 2021 from being appointed as a director in terms of Section 164 (2) ofthe Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure A. Our report expresses an unmodified opinion on the adequacyand operating effectiveness of the Company's internal financial controls over financialreporting.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended we reportthatin our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its Managing and Executive Directorsduring 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 Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
(i) The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial statements - Refer Note 41 to the StandaloneFinancial statements.
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses. J H Mehta & Co. CharteredAccountants Independent Auditor's Report on Standalone Financial Statements of 20 MicronsLimited for the year ended on March. 31 2021 - 7 -
(iii) The amounts which were required to be transferred to the Investor Education andProtection Fund by the Company during the year ended March. 31 2021 have been transferredby the Company during the year ended March. 31 2021. 2. As required by the Companies(Auditor's Report) Order 2016 ("the Order") issued by the Central Government interms of section 143 (11) of the Act we give in the Annexure B a statement on thematters specified in the paragraphs 3 and 4 of the order.
ANNEXURE - A
TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragrapRs. 1(f) under "Report on Other Legal and RegulatoryRequirements" section of our report the members of 20 Microns Limited of even date)
Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act")
In conjunction with our audit of the Standalone Financial statements of 20 MicronsLimited ("the Company") as of and for the year ended March. 31 2021 we havealso audited the internal financial controls over financial reporting of the Company.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that:
1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March. 31 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
ANNEXURE - B
TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragrapRs. 2 under "Report on Other Legal and RegulatoryRequirements" section of our report the members of 20 Microns Limited of evendate)
Report on the Companies (Auditor' Report) Order 2016 issued in terms of section 143(11) of the Companies Act 2013(the Act') of 20 Microns Limited (the Company')
(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of 3 years which in our opinionis reasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies have been noticed on such verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company as at 31st March. 2021.
(ii) The inventory has been physically verified by the Management during the year. Thediscrepancies noticed on physical verification of inventory as compared to book recordswere not material.
(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liabilities Partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3 (iii) [(a) to (c)] of thesaid Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
(v) In respect of deposits accepted by the Company the Company has complied with thedirectives of Reserve Bank of India and provisions of sections 73 to 76 or any otherrelevant provisions of the Companies Act 2013 and the rules framed thereunder.
(vi) We have broadly reviewed the books of account maintained by the Company in respectof products where pursuant to the rules made by the Central Government of India themaintenance of cost records has been prescribed under sub-section (1) of Section 148 ofthe Act and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have not however made a detailed examination of therecords with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is regular in depositing theundisputed statutory dues including provident fund employees' state insurance incometax goods and service tax cess duty of customs and other material statutory dues asapplicable with the appropriate authorities. According to the information andexplanations given to us and the records of the Company examined by us in our opinion noundisputed amounts payable were in arrears as at 31st March. 2021 for a period of morethan six months from the date they became payable.
(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of Excise Duty Goods and Service Tax Customduty and other material statutory dues which have not been deposited on account of anydispute.
The particulars of dues of income tax as at 31st March. 2021 which have not beendeposited on account of a dispute are as follows:
|Name of statute ||Nature of dues ||Amount (in Lakhs) ||Period to which the amount relate ||Forum where the dispute is pending |
|Income Tax Act 1961 ||Income Tax ||5.96 ||Assessment Year 2009-10 ||Commissioner of Income Tax Appeals |
|Income Tax Act 1961 ||Income Tax ||26.36 ||Assessment Year 2014-15 ||Commissioner of Income Tax Appeals |
|Gujarat Minerals (Prevention of illegal mining transportation and storage) rules 2017 ||Mining Royalty ||419.13 || ||The Commissioner( Geology & Mining Gandhinagar) |
| || ||451.45 || || |
(viii) The Company has not defaulted in repayment of loans or borrowing to financialinstitution bank government or dues to debenture holders
(ix) The Company did not raise any money by way of initial public offer further publicoffer (including debt instruments) or term loans during the year
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us no fraud by the Company or onthe Company by its officers or employees has been noticed or reported during the yearnor we have been informed of any such case by the Management.
(xi) In our opinion and according to the information and explanations given to us theCompany has paid or provided managerial remuneration during the year in accordance withthe requisite approvals mandated by the provisions of Section 197 read with Schedule V tothe Companies Act 2013.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragrapRs. 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Companies Act 2013. Details of suchtransactions have been disclosed in the financial statements as required by the applicableIndian Accounting Standards.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragrapRs. 3(xv)of the Order is not applicable.
xvi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.