To the Members of Astra Microwave Products Limited
Report on the audit of the Standalone financial statements
1. We have audited the accompanying standalone financial statements ofAstra Microwave Products Limited (the Company) which comprise the balancesheet as at March 312020 the statement of Profit and Loss ((including OtherComprehensive Income) statement of changes in equity and statement of cash flows for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.
2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (the Act) in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020and total comprehensive income (comprising of net profit and other comprehensive income)changes in equity and its cash flows for the year then ended.
Basis for opinion
3. We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Financial 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 Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Emphasis of Matter
4. We draw your attention to Note 42 to the financial statements whichdescribes the management's assessment of the impact of the outbreak of Coronavirus(Covid-19) on the business operations of the Company. The management believes that noadjustments are required in the financial statements as it does not impact the currentfinancial year however in view of the various preventive measures taken (such ascomplete lock-down restrictions by the Government of India travel restrictions etc.) andhighly uncertain economic environment a definitive assessment of the impact on thesubsequent periods is highly dependent upon circumstances as they evolve. Our opinion isnot modified in respect of this matter.
Key audit matters
5. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the financial statements of thecurrent period. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
|Key audit matter ||How our audit addressed the key audit matter |
|Appropriateness of the Expected credit loss (ECL) provision in respect of trade receivables carried at amortized cost. ||Our procedures in relation to testing of ECL provision recognized included the following: |
| Understanding and evaluating the design and testing the operating effectiveness of controls in respect of ECL provision for trade receivables carried at amortized cost. |
|(Refer Note 7 and Note 38 to the standalone financial statements) |
|The Company has trade receivables (gross) aggregating to Rs. 25711.15 lakhs as at March 31 2020 in respect of which the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments and recognises expected lifetime losses from initial recognition of the receivables. || Reading of the underlying contracts and invoices as applicable to understand the nature of trade receivables and the dates on which the payments fall due. |
| Assessing the appropriateness of the credit loss provisioning methodology used by the management which involves the use of historical trends such as cash collection performance of the current year against historical trends and the level of credit loss over time. |
|The provision for ECL as at March 31 2020 is Rs. 966.20 lakhs. |
|This is determined as a key audit matter as determination of the ECL provision involved application of judgement by Management in respect of matters such as maximum contractual period of credit risk and probability of credit loss given the large number of aged receivables from government customers. ||Based on the above procedures performed we did not find any significant exceptions to the ECL provision recognised in respect of trade receivables carried at amortized cost. |
6. The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in theDirector's report but does not include the financial statements and ourauditor's report thereon. The Director's report is expected to be made availableto us after the date of this auditor's report.
Our opinion on the financial statements does not cover the otherinformation and we will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the audit or otherwise appears tobe materially misstated.
When we read the Director's report if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance and take appropriate action as applicable under the relevant laws andregulations.
Responsibilities of management and those charged with governance forthe financial statements
7. The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
8. In preparing the financial statements management is responsible forassessing 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 management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the Company's financial reporting process.
Auditor's responsibilities for the audit of the financialstatements
9. Our objectives are to obtain reasonable assurance about whether thefinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
10. As part of an audit in accordance with SAs we exerciseprofessional judgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial 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 theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
11. We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
12. We also provide those charged with governance with a statement thatwe have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
13. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on other legal and regulatory requirements
14. 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 of the Act we give in the Annexure B a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
15. As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss (includingother comprehensive income) the Statement of Changes in Equity and Cash Flow Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statementscomply with the Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from thedirectors as on March 312020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312020 from being appointed as a director in termsof Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controlswith reference to financial statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in Annexure A.
(g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements - Refer Note 33 to the financialstatements;
ii. The Company has long-term contracts including derivative contractsas at March 31 2020 for which there were no material foreseeable losses. However theCompany did not have any longterm derivative contracts as at March 312020.
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company
iv. The reporting on disclosures relating to Specified Bank Notes isnot applicable to the Company for the year ended March 312020.
17. The Company has paid/ provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016 Chartered Accountants
Sunit Kumar Basu
Membership Number 55000 UDIN: 20055000AAAADG3156
Place: Hyderabad Date: June 24 2020
Annexure A to Independent Auditors' Report
Referred to in paragraph 15(f) of the Independent Auditors' Reportof even date to the members of Astra Microwave Products Limited on the standalonefinancial statements for the year ended March 312020
Report on the Internal Financial Controls withreference to financial statements under Clause (i) of Subsection 3 of Section 143 of theAct
1. We have audited the internal financial controls with reference tofinancial statements of Astra Microwave Products Limited (the Company) as ofMarch 31 2020 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the Guidance Note) and the Standards onAuditing deemed to be prescribed under section 143(10) of the Act to the extent applicableto an audit of internal financial controls both applicable to an audit of internalfinancial controls and both issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements was established and maintained and if such controls operatedeffectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to financial statements.
Meaning of Internal Financial Controls with reference to financialstatements
6. A company's internal financial controls with reference tofinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. Acompany's internal financial controls with reference to financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could havea material effect on the financial statements.
Inherent Limitations of Internal Financial Controlswith reference to financial statements
7. Because of the inherent limitations of internal financial controlswith reference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.
8. In our opinion the Company has in all material respects anadequate internal financial controls system with reference to financial statements andsuch internal financial controls with reference to financial statements were operatingeffectively as at March 312020 based on the internal control over financial reportingcriteria 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 Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Sunit Kumar Basu
Membership Number: 55000
Date: June 24 2020
Annexure B to Independent Auditors' Report
Referred to in paragraph 14 of the Independent Auditors' Report ofeven date to the members of Astra Microwave Products Limited on the standalone financialstatements as of and for the year ended March 312020
i. (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) The fixed assets are physically verified by the Managementaccording to a phased programme designed to cover all the items over a period of 3 yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. Pursuant to the programme a portion of the fixed assets has beenphysically verified by the Management during the year and no material discrepancies havebeen noticed on such verification.
(c) The title deeds of immovable properties as disclosed in Note 2 onfixed assets to the financial statements are held in the name of the Company.
ii. The Physical verification of inventory has been conducted atreasonable intervals by the management after the year end as the count could not beperformed as at March 312020 in view of the lockdown consequent to the outbreak ofCOVID19. No material discrepancies have been noticed on such verification.
iii. The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Therefore the provisions of Clause 3(iii)(iii)(a) (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 185 and 186 of theCompanies Act 2013 in respect of the loans and investments made and guarantees andsecurity provided by it.
v. The Company has not accepted any deposits from the public within themeaning of Sections 73 74 75 and 76 of the Act and the Rules framed there under to theextent notified.
vi. Pursuant to the rules made by the Central Government of India theCompany is required to maintain cost records as specified under Section 148(1) of the Actin respect of its products.
We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.
vii. (a) According to the information and explanations given to us andthe records of the Company examined by us in our opinion the Company is generallyregular in depositing undisputed statutory dues in respect of Professional Tax and Incometax deducted at source though there has been a slight delay in a few cases and isregular in depositing undisputed statutory dues including provident fund employees'state insurance income tax duty of customs cess goods and service tax and othermaterial statutory dues as applicable with the appropriate authorities.
Further for the period March 2020 the company has paid Goods andService Tax and filed GSTR 3B (after the due date but) within the timelines allowed byMinistry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customsunder the Notification No. 32/2020 - Central Tax dated April 3 2020 on fulfilment ofconditions specified therein.
(b) According to the information and explanations given to us and therecords of the Company examined by us there are no dues of income-tax sales-taxservice-tax duty of customs and duty of excise or value added tax or goods and servicetax which have not been deposited on account of any dispute. Also refer Note 33 to thefinancial statements regarding management's assessment on certain matters relating toprovident fund.
viii. According to the records of the Company examined by us and theinformation and explanation given to us the Company has not defaulted in repayment ofloans or borrowings to any financial institution or bank or Government or dues todebenture holders as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial publicoffer further public offer (including debt instruments) and term loans. Accordingly theprovisions of Clause 3(ix) of the Order are not applicable to the Company.
x. During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the Management.
xi. The Company has paid/ provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act. Also refer paragraph 17 of the independent auditor'sreport.
xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014are not applicable to it the provisions of Clause 3(xii) of the Order are not applicableto the Company.
xiii. The Company has entered into transactions with related parties incompliance with the provisions of Sections 177 and 188 of the Act. The details of suchrelated party transactions have been disclosed in the financial statements as requiredunder Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specified underSection 133 of the Act.
xiv. The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of Clause 3(xiv) of the Order are not applicable tothe Company.
xv. The Company has not entered into any non-cash transactions with itsdirectors or persons connected with them. Accordingly the provisions of Clause 3(xv) ofthe Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934.
Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Sunit Kumar Basu
Membership Number: 55000
Date: June 24 2020