To the Members of
ALOK INDUSTRIES LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the standalone Ind AS financial statements of ALOK INDUSTRIESLIMITED ("the Company") which comprise the Balance Sheet as at March 312020 and the Statement of Profit and Loss Statement of Changes in Equity and theStatement of Cash Flows for the year then ended and Notes to the Financial Statementsincluding a summary of Significant Accounting Policies and other explanatory information(hereinafter referred to as "Standalone financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion section of our report the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2020 and its profit changes in equityand its cash flows for the year ended on that date.
Basis for Qualified Opinion
1. As per Indian Accounting Standard 36 on Impairment of Assets the Company isrequired to determine impairment in respect of fixed assets as per the methodologyprescribed under the said Standard. However the Management of the Company has not doneimpairment testing for the reasons explained in note no. 54 of the standalone financialstatements. In the absence of any working for impairment of the fixed assets as per IndAS 36 the impact of impairment if any on these Standalone Financial Statements is notascertainable. The audit report on the Standalone Financial Statements for the year endedMarch 31 2019 was also qualified in respect of this matter.
2. As mentioned in note no. 40 of the standalone financial statements the Companycontinued to recognize deferred tax assets of Rs. 1423.11 crore. Considering pending fullimplementation of Approved Resolution Plan including constitution of the new Board ofDirectors and absence of certainty and convincing evidence for taxable income in futureas required by the Ind AS 12 we are unable to ascertain the extent to which thesedeferred tax assets can be utilized. The audit report on the Standalone FinancialStatements for the year ended March 31 2019 was also qualified in respect of this matter.
3. As mentioned in the note no. 41 (c) of the standalone financial statements theImpairment testing of the assets of the wholly owned subsidiary Alok InfrastructureLimited is not carried out. Therefore adequacy of the Provision for doubtful loan of AlokInfrastructure Limited in the books of the Company is not ascertainable.
4. A mention is made in the note no. 44 of the standalone financial statementsregarding non- provision of trade receivables amounting to Rs. 89.02 crore by one of thejoint ventures for the year ended March 31 2019. Had this provision been made thecurrent assets and profit would have been lower by Rs.89.02 crore and the net worth wouldhave also been eroded to that extent. These conditions along with absence of clearindications or plans for revival in our opinion indicate that there is significantuncertainty about realisation of the carrying amount of the investments as on March 312020. We are unable to ascertain the consequent effect on the investments held by thecompany and profit for the year.
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and we have fulfilledour other ethical responsibilities in accordance with these requirements and the ICAI'sCode of Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified opinion.
Emphasis of Matter
We draw attention to Note 34 of the Statement as regards the management's evaluationof COVID-19 impact on the future performance of the company. Our opinion is not modifiedin 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.
|Key Audit Matter ||Auditor's Response |
|1. Taxation and Legal matters ||Principal Audit Procedures: |
|Refer note. 1(d) and note 38 of the standalone financial statements ||We used our expertise to gain an understanding of the current status of the cases and monitored changes in the disputes by reading relevant documents received by the Company to establish that the provisions had been appropriately adjusted to reflect the latest external developments. |
|There are a number of legal and tax cases against the Company. ||For legal regulatory and tax matters our procedures included the following: |
|There is a high level of judgment required in estimating the level of provisioning required. || testing key controls surrounding litigation regulatory and tax procedures; |
| || performing substantive procedures on the underlying calculations supporting the provisions recorded; |
| || where relevant reading external legal opinions obtained by the management; |
| || discussing open matters with the Companies litigation regulatory and tax teams; |
| || assessing management's conclusions through understanding precedents set in similar cases; and |
| ||Based on the evidence obtained while noting the inherent uncertainty with such legal and tax matters we determined the level of provisioning as at March 31 2020 to be appropriate. We validated the completeness and appropriateness of the related disclosures through assessing that the disclosure of the uncertainties in note 39 of the financial statements was sufficient. |
|2. Accounting treatment for the effects of the Resolution Plan || |
|A) Refer Note 33 to the standalone financial statements for the details regarding commencement of implementation of the resolution plan and Note No. 32 and 37 of the standalone financial statements for impact of the resolution plan in the company pursuant to the corporate insolvency resolution process under Insolvency and Bankruptcy Code 2016. ||A) We have performed the following procedures to determine whether the effect of Resolution Plan has been appropriately recognised in the financial statements: |
|On July 18 2017 the date of commencement of the corporate insolvency resolution ("CIR") process the Company had outstanding credit facilities from several financial institutions aggregating to Rs.29614.67 crore. The Company also had accrued dues amounting to Rs.723.07 crore towards operational creditors. ||Reviewed management's process for review and commencement of implementation of the Resolution Plan. |
|Owing to the size of the over-due credit facilities multiplicity of contractual arrangements and large number of operational creditors determination of the carrying amount of related liabilities at the date of commencement of the corporate insolvency resolution ("CIR") process was a complex exercise. ||Reviewed the provisions of the Resolution Plan to understand the requirements of the said Plan and evaluated the possible impact of the same on the financial statements. |
|Further comprehending the provisions of the Resolution Plan and determining the appropriateness of the accounting treatment thereof more particularly the accounting treatment of derecognition of liabilities and outstanding trading dues & its related provisions required significant judgment and estimates including consideration of accounting principles to be applied for presentation. ||Verified the balances of liabilities as on the date of commencement of the corporate insolvency resolution ("CIR") process from supporting documents and computations on a test check basis. |
|Accounting for the effects of the resolution plan is considered by us to be a matter of most significance due to its importance to intended users' understanding of the financial statements as a whole and materiality thereof. ||Verified the underlying documents supporting the receipt and payment of funds as per the Resolution Plan. |
| ||Tested the implementation of provisions of the Resolution Plan in computation of balances of liabilities owed to financial and operational creditors. |
| ||Evaluated whether the accounting principles applied by the management fairly present the effects of the Resolution Plan in financial statements in accordance with the principles of Ind AS. |
| ||Tested the related disclosures made in notes to the financial statements in respect of the implementation of the resolution plan. |
|B) Refer Note 38 to the standalone financial statements. Prior to the approval of the Resolution Plan on March 08 2019 the Company was a party to certain litigations. Pursuant to the approval of the Resolution Plan it was determined that no amounts are payable in respect of those litigations as they stand extinguished. ||B) We have performed the following procedures to test the recoverability of payments made by the Company in relation to litigations instituted against it prior to the approval of the Resolution Plan: |
|The estimates related to expected outcome of litigations and recoverability of payments made in respect thereof have high degree of inherent uncertainty due to insufficient judicial precedents in India in respect of disposal of litigations involving companies admitted to Corporate Insolvency Resolution Process. ||Verified the underlying documents related to litigations and other correspondences with the statutory authorities. |
|The application of significant judgment in the aforementioned matters required substantial involvement of senior personnel on the audit engagement including individuals with expertise in accounting of financial instruments ||We reviewed the process used by the management to determine estimates and to test the judgments applied by management in developing the accounting estimates. |
| ||Assessed management's estimate of recoverability. |
| ||Determined whether the methods for making estimates have been applied consistently. |
| ||Evaluated whether the accounting principles applied by the management fairly present the amounts recoverable from relevant parties in financial statements in accordance with the principles of Ind AS. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Management under the direction of the Resolution Professional (RP)/Monitoring Committee (MC) is responsible for the other information. The other informationcomprises the Board's Report Report on Corporate governance but does not include thefinancial statements and our auditor's report thereon.
The Annual Report is expected to be made available to us after the date of thisauditor's report. Our opinion on the financial statements does not cover the otherinformation and we are not expressing any form of assurance conclusion thereon. Inconnection with our audit of the financial statements our responsibility is to read theother information identified above when it becomes available and in doing so considerwhether the other information is materially inconsistent with the financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the Board's Report and Report on Corporate Governance if we concludethat there is a material misstatement therein we are required to communicate the matterto those charged with governance and describe actions applicable in the applicable lawsand regulations
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements:
The Company's Management under the direction of the RP/MC is responsible for thematters stated in section 134(5) of the Companies Act 2013 ("the Act") withrespect to the preparation of these standalone financial statements that give a true andfair view of the financial position financial performance statement of changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the accounting Standards specified under section 133 of theAct.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments 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 statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements the Management under the direction ofthe RP/MC is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Management under the direction of the RP/MC eitherintends to liquidate the Company or to cease operations or has no realistic alternativebut to do so.
The Management under the direction of the RP/MC is also responsible for overseeing theCompany's financial reporting 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) of theCompanies 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.
Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Standalone Financial Statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the Standalone Financial Statements
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 withthose charged with governance we determine those matters that were of most significancein the audit of the Standalone Financial Statements of the current period and aretherefore the key audit matters.
We describe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 and except for the effects if any of the matters described in the basis forqualified opinion paragraph we give in the ANNEXURE A' a statement on thematters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act we report to the extent applicable 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) Except for the effects if any of the matters described in the basis for qualifiedopinion 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 Statement of Profit and Loss the Statement of Cash Flows andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.
(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under Section 133 of the Act except for theeffects if any of the matters described in the basis for qualified opinion paragraph.
(e) The matter described under the basis for qualified opinion paragraph above in ouropinion may have an adverse effect on functioning of the Company and on the amountsdisclosed in standalone Ind AS financial statements of the Company;
(f) On the basis of the written representations received from the directors as on March31 2020 and taken on record by the Monitoring Committee none of the directors aredisqualified as on March 31 2020 from being appointed as a director in terms of Section164(2) of the Act.
(g) With respect to the adequacy of the Internal Financial Controls with reference toFinancial Statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in ANNEXURE B' the Company has in all materialrespects an adequate internal financial controls system; and
(h) 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 in our opinionand to the best of our information and according to the explanations given to us theCompany has not paid any remuneration to its directors during the year.
(i) With respect to the other matters to be included in the Auditors' 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. TheCompany has disclosed the impact of pending litigations on its financial position in itsstandalone Ind AS financial statements (Refer note no. 38 to the standalone Ind ASFinancial Statements);
ii. The Company did not have any long-term contracts (except for those disclosed undercontingent liability) including derivative contracts as at March 31 2020 for which therewere any material foreseeable losses; and
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund.
Annexure A to the Independent Auditors' Report
The Annexure referred to in paragraph 1 under Report on Other Legal andRegulatory Requirements' section of our report of even date
i. a. The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets.
b. According to the information and explanations given to us physical verification ofmajor portion of fixed assets was conducted by the management during the year which inour opinion is reasonable having regard to the size of the Company and nature of itsbusiness and no material discrepancies were noticed on such verification.
c. According to the information and explanations given to us the records examined byus and based on the examination of mortgage deeds provided to us we report that thetitle deeds of all immovable properties of land and buildings which are freehold are heldin the name of the Company as at balance sheet date. In respect of immovable properties ofland and buildings that have been taken on lease and disclosed as fixed assets in thestandalone Ind AS financial statements the lease agreements are in the name of theCompany.
ii. The inventory except goods-in-transit and stocks lying with third parties havebeen physically verified by the management during the year. The discrepancies noticed onverification between the physical stocks and the book records were not material and havebeen dealt with in books of account.
iii. According to the information and explanations given to us the Company has grantedunsecured loans to the companies covered under Section 189 of the Act.
a. As per information and explanations given to us the company has not granted orrenewed any secured or unsecured loan during the year to parties covered under Section 189of the Act.
b. As per the information and explanations given to us the loans given by the Companyduring the earlier years did not carry any interest. These loans are repayable on demand.
c. As the loan are payable on demand as per the agreements and no demands for repaymentare made by the company there are no overdues. On the basis of prudence however thecompany has made provision for doubtful debts pertaining to these loans to the extent ofRs.1967.38 crore in the earlier years.
iv. In our opinion and according to information and explanations given to us theCompany has complied with provisions of Section 185 and 186 of the Act in respect ofloans investments guarantees and securities except for the following:
During the year the Company has not charged interest on loans to subsidiariesaggregating to Rs.1967.38 crore which are fully provided for in the earlier years.Further the company has not charged interest on balance of Rs.871.60 crore due from itssubsidiary which was admitted under the corporate insolvency resolution process by theHon'ble NCLT Mumbai Bench on October 24 2018.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public in accordance with the provisions ofSections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. Accordingly the provision of Clause 3(v) of the Order is not applicable to theCompany. According to the information and explanations given to us no order has beenpassed by the Company Law Board or the National Company Law Tribunal or the Reserve Bankof India or any Court or any other Tribunal.
vi. According to the information and explanations given to us the Company hasmaintained books of account and other records pursuant to the rules prescribed by theCentral Government for the maintenance of cost records under Section 148(1) of the Actrelating to manufacture of Woven greige fabric woven processed fabric spinning andpolyester. We have broadly reviewed the cost records maintained by the Company and are ofthe opinion that prima facie the specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same
vii. a. According to the information and explanations given to us and on the basis ofour examination of the records of the Company the company has generally been regular indepositing undisputed statutory dues including Provident fund Employees State InsuranceIncome-Tax Goods and Service Tax professional Tax and other material statutory duesapplicable to it to the appropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees State Insurance Income-Tax Goods andService Tax professional Tax and other material statutory dues were in arrears as atMarch 31 2020 for a period more than six months from the date they become payable.
b. As mentioned in note no.38 to the standalone financial statements pursuant to thecommencement of implementation of the Resolution Plan there are no dues in respect ofincome tax sales tax service tax duty of customs duty of excise and value added taxthat have not been deposited with the appropriate authorities on account of any dispute.
viii. On March 08 2019 the National Company Law Tribunal ("NCLT") hadapproved the terms of the Resolution Plan submitted by JM Financial Asset ReconstructionCompany Limited JM Finance ARC March 18 Trust and Reliance Industries Limitedjointly pursuant to which debts owed by the company as on the date of commencement ofCIRP process have been partially settled through repayment and balance amount has beenassigned to JM Financial Asset Reconstruction Company Limited. Accordingly the companyhas not defaulted in repayment of loans or borrowings to any financial institution or bankor any dues to debenture holders during the year.
ix. According to the information and explanations given to us and based on recordsexamined by us we are of the opinion that the moneys raised during the year by way of termloans by the Company pursuant to the terms of the Approved Resolution Plan were appliedfor the purpose for which it was raised. The Company has not raised money by way ofinitial public offer or further public offer (including debt instruments) during the year.
x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
xi. According to the information and explanations given to us and based on ourexamination of the records we report that the Company has not paid/provided managerialremuneration during the year.
xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly the provisions of Clause 3(xii) of the Orderare not applicable to the Company.
xiii. According to the information and explanations given to us and based on ourexaminations of the records of the Company as the power of the Board and Audit Committeeare suspended the compliance with sections 177 and 188 of the Act are not applicable.Transactions with related party for the period under reporting were taken on record by MC.The details of such related party transactions have been disclosed in the standalone IndAS financial statements as required under Indian Accounting Standard (Ind AS) 24Related Party Disclosures' specified under Section 133 of the Act.
xiv. During the year the company has made preferential allotment/private placement ofshares as per the terms of the approved resolution plan. In respect of the same in ouropinion the Company has complied with the requirement of Section 42 of the Act. Furtherin our opinion the amounts so raised have been used for the purposes for which the fundswere raised. During the year the Company did not make preferential allotment/privateplacement of fully/ partly convertible debentures.
xv. According to the information and explanations given to us and based on ourexamination of the records the Company has not entered into non-cash transactions withdirectors or persons connected with them as prescribed under section 192 of the Act.Accordingly the provisions of Clause 3(xv) of the Order are not applicable to theCompany.
xvi. According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly the provisions of Clause 3(xvi) of the Order are not applicable to theCompany.
Annexure B to the Independent Auditors' Report
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 internalfinancial controls over financial reporting of ALOK INDUSTRIES LIMITED("theCompany") as of March 31 2020 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Management under the direction of the RP/MC is responsible forestablishing and maintaining internal financial controls based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (The "Guidance Note"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013 ("the Act").
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 and the Standards on Auditing prescribed under section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. 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 auditors' 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 under the direction of the RP/MC of thecompany; 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 and to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2020 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
|For SHAH GUPTA & CO. ||For NBS & Co. |
|Chartered Accountants ||Chartered Accountants |
|Firm Registration No.: 109574W ||Firm Registration No. 110100W |
|UDIN: - 20013107AAAABQ9003 ||UDIN: - 20048094AAAACO3941 |
|D. V. Ballal ||Devdas V. Bhat |
|Partner ||Partner |
|M. No. 13107 ||M. No. 048094 |
|Place : Mumbai ||Place : Mumbai |
|Date : July 31 2020 ||Date : July 31 2020 |