To The Members of
Addi Industries Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Addi IndustriesLimited ("the Company") which comprise the balance sheet as at March 312020 and the Statement of Profit and Loss (including Other Comprehensive Income)Statement of Changes in Equity and Statement of Cash Flows for the year then ended andnotes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the standalone financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2020 the Loss (financial performanceincluding other comprehensive income) changes in equity and its cash flows for the yearended 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 ethicalrequirements 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 opinion on the standalone financial statements.
Material Uncertainty Related to Going Concern
We draw attention to Note 2 in the standalone financial statements which specify thatthe Company is in process of exploring the modalities to start new business venturehowever the Company has not yet implemented the same. This situation indicate theexistence of material uncertainty that may cast significant doubt about the Company'sability to continue as a going concern. However in view of future business opportunitiesthe Management is of the view that going concern basis of accounting is appropriate forpreparation of the accompanying standalone financial statement. Our opinion is notmodified in respect of this matter.
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 w.r.t the Company:
|S. No. Key Audit Matters ||How our audit addressed the key audit matter |
|1. Judgment in valuation of deferred income tax positions ||Our procedure in relation to the appropriateness of judgements in valuation and accounting of deferred income tax include: |
|(Refer to the accompanying Note 7 forming integral part of the standalone financial statements) ||a) Substantive testing: |
| Evaluated the assumptions and methodologies used by the Company for the purpose of calculation of deferred taxes; || Evaluated computation of deferred income income tax and challenged the key estimates such as tax rates. |
|The Company's deferred income tax assets are netted with deferred income tax liabilities as at March 31 2020. || |
|Under Ind AS the Company is required to annually determine the valuation of deferred tax positions. || Assessed the recoverability of deferred tax assets of the Company by reviewing their profitability management's forecasts and local fiscal developments; |
|This area was significant to our audit because of the subjectivity of the components forming part of deferred income tax assets/liabilities including assumptions that are affected by expected future market or economic conditions and the estimates/actual position which effects the reversal of deferred taxes. || Projections were assessed using a number of scenarios to cover reasonable changes in the assumptions underlying the projections. These changes mainly relate to variations in revenue growth percentages and operating margin percentages. The deferred tax assets are only recognized to the extent that it is considered probable that future taxable profits will be available against which these deferred tax assets can be utilized; |
| || Assessed and tested the adequacy of the Company's disclosures on deferred income tax positions and assumptions used; |
| || Involved our tax professionals with specialized skills to evaluate the correctness and reasonableness of the calculations judgements and estimates applied in determining deferred income tax; |
| || Assessed Company's disclosures in respect of deferred income tax. |
| ||b) Controls testing: |
| ||Wherever appropriate our substantive work was supplemented by controls testing work which encompassed understanding evaluating and testing key controls in respect of judgement estimates calculation and presentation of deferred income tax. |
| ||Our procedures as mentioned above did not identify any findings that are significant for the financial statements as whole in respect of judgement estimates calculation and presentation of deferred income tax as per Ind AS 12. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the annual report but does not includethe standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Responsibility of Management and Those Charged with Governance for the StandaloneFinancial Statements
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 standalone 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 and maintenance 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless Board of Directors either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process. Auditor's Responsibilities for the Audit of the Standalone FinancialStatements
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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
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 financial statements in place andthe 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 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 standalonefinancial statements including the disclosures and whether the standalone financialstatements represent 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 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 to the extent applicable.
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 Statement of Cash Flows dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid standalone 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 March312020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312020 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 tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".
g) 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. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements- Refer Note No. 28 to the standalonefinancial 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.
3. 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 not paid or provided any managerial remuneration to any director during theyear.
For B.R. Gupta & Co.
Firm Registration Number 008352N
Membership Number 073696
UDIN No.: 20073696AAABE6175
Place of Signature: New Delhi
Date: June 29 2020
Annexure A to the Independent Auditors' Report of even date on thestandalone financial statements of Addi Industries Limited
The Annexure referred to in paragraph 1 under Report on Other Legal andRegulatory Requirements' section of Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended March 31 2020 wereport that:
i) In respect of fixed assets comprising property plant and equipment:
a) In the earlier years the fixed assets register of the company was misplaced and thecompany is still in the process of retrieval and updating the fixed assets register. Hencewe are unable to comment with regard to quantitative details and situation of fixedassets.
b) As explained to us physical verification of major fixed assets has been conductedby the Management at appropriate intervals. In our opinion the program is reasonablehaving regard to the size of the Company and the nature of the fixed assets. Further inview of our comments in para (a) above the discrepancies if any between the bookrecords and the physical verification has not been ascertained.
c) On the basis of information and explanation provided by the Management no freeholdimmovable property is held by the Company during the year. In case of immovable propertythat have been taken on lease and disclosed as property plant and equipment in thefinancial statements we report that the lease agreement are in name of the Company.
ii) According to the information and explanations given to us the Company does nothave any inventory. Accordingly the provisions of clause 3(ii) of the Order are notapplicable.
iii) According to the information and explanations given to us the Company has notgranted any loan secured or unsecured to companies firms Limited Liability Partnerships(LLPs) or other parties covered in the register maintained under Section 189 of the Act.Accordingly the provisions of clauses 3(iii) (a) to (c) of the Order are not applicable.
iv) In our opinion and according to the information and explanations given to us theCompany has not entered into any transaction covered under Sections 185 and 186 of theAct. Accordingly the provisions of clause 3(iv) of the Order are not applicable
v) In our opinion and according to the information and explanation given to us sincethe Company has not accepted any deposits therefore the question of the compliance of anydirectives issued by the Reserve Bank of India and the provisions of sections 73 to 76 orany other relevant provisions of the Companies Act and the rules framed there under doesnot arise.
vi) On the basis of available information and explanation provided to us the CentralGovernment has not prescribed maintenance of cost records under sub-section (1) of section148 of the Companies Act 2013 read with Companies (Cost Records and Audit) AmendmentRules 2014 dated December 31 2014 (as amended from time to time) to the currentoperations carried out by the Company. Accordingly the provisions of paragraph 3(vi) ofthe Companies (Auditor's Report) Order 2016 are not applicable to the Company.
vii) In respect to statutory dues:
a) The Company is generally regular in depositing undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Sales-Tax Service Tax Duty ofCustoms Duty of Excise Value Added Tax Goods and Service Tax cess and any othermaterial statutory dues applicable to it with the appropriate authorities. Further therewere no undisputed outstanding statutory dues as on the last day of the financial yearconcerned for a period of more than six months from the date they became payable.
|Name of the Statute ||Nature of Dues ||Amount involved (inRs.in Lakh) ||Amount Deposited (in Rs. in Lakh) ||Period ||Forum where dispute is pending |
|ESI Act ||ESI ||77.42 || ||During 1995- 1996 to 1998-1999 ||Allahabad High Court |
viii) The Company does not taken any loans or borrowings from any financialinstitution banks Government or debenture holders during the year. Accordinglyparagraph 3(viii) of the Order is not applicable.
ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3(ix) of the Order is not applicable.
x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.
xi) In our opinion and according to the information and explanations given to us theCompany has not paid or provided for any managerial remuneration. Accordingly theprovisions of Clause 3(xi) of the Order are not applicable.
xii) The Company is not a Nidhi Company. Accordingly provisions of clause 3(xii) ofthe Order are not applicable.
xiii) In our opinion and according to the information and explanations given to us alltransactions with the related parties are in compliance with Sections 177 and 188 of Actwhere applicable and the requisite details have been disclosed in the financialstatements etc. as required by the applicable accounting standards.
xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. Accordingly provisions ofclause 3 (xiv) of the order are not applicable.
xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with the directors or personsconnected with them covered under Section 192 of the Act. Accordingly provisions ofclause 3 (xv) of the order are not applicable.
xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly provisions of clause3 (xvi) of the order are notapplicable.
For B.R. Gupta & Co.
Firm's Registration Number 008352N
Membership Number 073696
UDIN No.: 20073696AAABE6175
Place of Signature: New Delhi
Date: June 29 2020
Annexure B' to the Independent Auditors' Report of even date on the StandaloneFinancial Statements of Addi Industries Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls with reference to financial statementsof Addi Industries Limited ("the Company") as of March 312020 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued 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 Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements 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 systemwith reference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
A company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls with reference to financialstatements
Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2020 based on "the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.
For B.R. Gupta & Co.
Firm's Registration Number 008352N
Membership Number 073696
UDIN No.: 20073696AAABE6175
Place of Signature: New Delhi
Date: June 29 2020.