To the Members of ACI Infocom Limited
Report on the Audit of the Ind AS Financial Statements Opinion
We have audited the accompanying Ind AS financial statements of ACI Infocom Limited("the Company") which comprise the balance sheet as at March 31 2020 theStatement of Profit and Loss including Other Comprehensive Income the Statement ofChanges in Equity and Statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and its loss including the Statementof Other Comprehensive Income changes in equity and its cash flows for the year ended onthat date.
Basis for Opinion
We conducted our audit of the Ind AS 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 Ind AS Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the Ind AS financial statements under the provisions ofthe Act and the Rules made there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key audit mattersto be communicated in our report.
Description of each key audit matter in accordance with SA 701:
|The Key Audit Matter ||How the matter was addressed in our Audit |
|1. Tax litigations - Provisions and Contingencies ||In conjunction with our tax specialists we have evaluated Management's judgments with respect to such tax matters in order to assess the adequacy of the tax provisions and contingent liability. |
|The Company has indirect tax litigations. The Company periodically reviews its tax positions which include reviews by the external tax consultant and tax counsels appointed by the Company. Where the amount of tax liabilities is uncertain the Company recognizes accruals/contingent liability that refllect Management's best estimate of the outcome based on the facts. Thus there is a risk that accruals/contingent liability for tax is not accounted properly. How the matter was addressed in our audit In conjunction with our tax specialists we have evaluated Management's judgments with respect to such tax matters in order to assess the adequacy of the tax provisions and contingent liability. || |
|Refer note 32 to the Ind AS Financial Statements || |
|2. Loans & Advances Deposits etc. || |
|The value of loans and Advances Deposits as at 31st March 2020 is significant and there is a high degree of complexity and judgement involved for the company in the estimating individual and collective credit impairment provisions and write-offs against these loans. ||Our audit procedure included considering the appropriateness of the company's accounting policies for impairment of financial assets and assessing compliance with Ind AS 109. |
|The Company's impairment provision for receivables from financing business is based on the expected credit loss approach laid down ||For loans which are assessed for impairment on a portfo lio basis we performed particularly the following procedures: |
|under Ind AS 109. Under this approach the ||- We understood the methodology and policy laid |
|management has been required to exercise judgement in areas such as; ||down for loans given by the company. |
|- calculation of past default rates ||- We have verified the existence of recovery process plant in the event of default. |
|- applying macro-economic factors to arrive at forward looking probability of default; and ||- We have verified the historical trends of repayment of principal amount of loan and repayment of interest. |
|- significant assumption regarding the probability of various scenarios and discounting rates for different industries considering individual borrower profile. ||- We tested the reliability of the key data inputs and related management controls. |
|In view of the high degree of estimation involved in the process of calculation impairment provision and considering its significance to the overall Ind AS financial statement whereby any error or omission in estimation may give rise to a material misstatement of Ind AS financial statements it is considered as a key audit matter. ||- We have assessed the assumptions made by the company in making provision considering forward looking information. |
|Refer Note 8 & 11 to the Ind AS financial statements. || |
Information Other than the Ind AS Financial Statements and Auditor's Report Thereon
The Company's Board of Directors are responsible for the preparation of the otherinformation. The other information comprises the information included in the annualreport but does not include the Ind AS financial statements and our auditor's reportthereon. Our opinion on the Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon. In connectionwith our audit of the Ind AS financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the Ind AS financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation. We are required to report that fact. We have nothing to report in thisregard.
Responsibility of Management and Those Charge with Governance for the Ind AS FinancialStatements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Ind AS financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation andmaintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of
the Ind AS financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error. In preparing the Ind AS financialstatements the board of directors 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 board of director 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 Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Ind AS 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 Ind AS 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 todesign 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 hasadequate internal financial controls with reference to Ind AS financial statements inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting 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 Ind AS 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 Ind AS financialstatements including the disclosures and whether the Ind AS 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 Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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 public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the 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) Statement of Change in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the relevant books of account.
d) In our opinion the aforesaid Ind AS financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.
f) With respect to the adequacy of the internal financial controls with reference toInd AS financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".
g) With respect to the matter to be included in the Auditors' report under Section197(16):
In our opinion and according to the information and explanation given to us theCompany has paid remuneration to its directors during the year is in accordance withthe provisions of and limit laid down undesection 197 read with Schedule V 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 in our opinionand to the best of our information and according to the explanations given to us:
i. On the basis of written representations received from the management of the Companythe Company has disclosed the impact of pending litigations on its financial position inits Ind AS financial statements- Refer Note No. 32 to the Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For Anand Jain & Associates
Firm's registration number:105666W
Anand Raj Jain Partner
Membership No.042051 Date- 29.06.2020 Place- Mumbai
ANNEXURE A TO THE AUDITORS' REPORT
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the Ind AS financial statements for the year ended 31 March 2020 we reportthat:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) We are informed that fixed assets have been physically verified by the managementat reasonable interval and no discrepancies were noticed on such verification. In ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the Company and nature of its assets
(c) According to the information and explanations given to us the title deeds ofimmoveable properties are held in the name of the company
(ii) According to the information and explanations given to us the Company hasconducted physical verification of inventory at reasonable intervals. . In our opinion nosuch material discrepancies were noticed on physical verification by the management.
(iii) (a) The Company has not granted loans to parties covered in the registermaintained under section 189 of the Companies Act2013 ('the Act').
Thus paragraph (iii)(b) and 3 (c) of the Order is not applicable.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with provision of section 185 and 186 of Act with respect to theloan and investment made.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the cost records maintained by the company specified bythe Central Government under subsection (1) of section 148 of the Companies Act and are ofthe opinion that prima facie the prescribed cost records have been maintained.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records the Company is regular in depositing undisputed statutorydues including provident fund income tax service tax goods and service taxcess andother material statutory dues with the appropriate authorities. As explained to us theCompany did not have any dues on account of sales tax wealth tax duty of customs valueadded tax goods and service tax employees' state insurance and duty of excise.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax service tax goods and service tax cessand other material statutory dues were in arrears as at 31stMarch2020 for aperiod of more than six months from the date they became payable except Professional taxof Rs.33800.
(b) According to the information and explanations given to us there are no materialdues income tax or sales tax or wealth tax or service tax or duty of customs or duty ofexcise or value added taxgoods and service tax or cess which have not been deposited withthe appropriate authorities on account of any
dispute. However according to information and explanations given to us the followingdues of duty of customs and Service tax have not been deposited by the Company on accountof disputes:
|Name statute of ||Nature of dues ||Period to which amt relates to ||Amt (Rs.) ||Forum where dispute pending |
|Custom 1962 Act ||Custom Duty Interest ||1984-85 ||627764 + ||The matter is pending before competent authority |
(viii) The Company did not have any outstanding dues to financial institutions banksor debenture holders during the year. Further as at the Balance sheet date the Companydoes not have any loans or borrowing from the Government.
(ix) The company has not raised moneys by way of initial public offer or further publicoffer (including debt instrument) and term loans during the year.
(x) According to the information and explanations given to us no material fraud on orby the Company has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and based on ourexamination of the record of the Company the managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act
(xii) In our opinion and according to the information and explanations given to us thecompany is not a Nidhi Company. Accordingly paragraph 3(xii) of Order is not applicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the record of the Company transactions with related parties are incompliance with sections 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the Ind AS Financial statements as required by theapplicable accounting standards.
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us and based on ourexamination of the record of the Company the company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable to the Company.
(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable tothe Company.
For Anand Jain & Associates
Firm's registration number: 105666W
Anand Raj Jain Partner
Membership No.042051 Date- 29.06.2020 Place -Mumbai UDIN:20042051AAAABM1635
ANNEXURE B TO THE AUDITORS' REPORT
Report on the Internal Financial Controls der Clause (i) of Sub-section 3 of Seoti 143of the Companies Act 2013 ("the ACt
We have audited the internal financial controls over financial reporting of ACI InfocomLimited ('the Company') as of 31stMarch2020 in conjunction with our audit ofthe Ind AS financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information 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 Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively 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 accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised 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 controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31stMarch 2020basedon the internal control over financial reporting criteria established by the Companyconsidering the essential component of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by Institute ofChartered Accountants of India.
For Anand Jain & Associates
Firm's registration number: 105666W
Anand Raj Jain Partner
Date29.06.2020 Place- Mumbai