To the Members of M/s. DAMODAR INDUSTRIES LIMITED
Report on the Financial Statements
We have audited accompanying Ind AS financial statements of Damodar Industries Limited(the Company) which comprise of the balance sheet as at March 31 2020 thestatement of Profit and Loss (Including Other Comprehensive Income) statement of changesin equity and statement of cash flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.
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 Indian accounting standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended(Ind As) and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 loss and total comprehensive losschanges in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Companies Act 2013. Ourresponsibilities under those Standards are further described in the Auditor Rs sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the independent requirement thatare relevant to our audit of the financial statements under the provisions of the Act andthe rules made there under and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI Rs s Code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion on Ind As financial statements.
Emphasis of Matter
We draw attention to Note 40 to Financial Statement which describes the uncertaintiesand the impact of Covid -19 pandemic on the Company's operations and results as assessedby the management. Our opinion is not modified 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 Ind AS financial statements for the financialyear ended March 31 2020. These matters were addressed in the context of our audit of thefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For matter below our description of how our auditaddressed the matter is provided in that context.
We have determined the matter described below to be the key audit matter to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor Rs s responsibilities for the audit of the financial statements section of ourreport including in relation to this matter. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the financial statements. The results of our audit procedures includingthe procedures performed to address the matter below provide the basis for our auditopinion on the accompanying financial statements.
|Key Audit Matter ||How the matter was addressed in our audit |
|1 Package Scheme of Incentives by Government of Maharashtra: Under the Policy the Company is eligible to claim government grant in the form of reimbursement of State Goods and Service Tax (SGST) collected on end product sold /intermediate product to the extent of the eligible capital investments in specified period. For measurement of such government grants significant estimates and judgements are made by the management. The estimates inputs and judgements used by the management includes: ||We performed following procedures among others: |
| We obtained an understanding evaluated the design and tested operating effectiveness of the controls related to the government grants including the controls in respect of measurement of the grants. |
| We compared the inputs used in the computation of government grant to external data including the modalities to claim the reimbursement of SGST under the Policy. |
| Future sales growth rate; |
| We have checked the Memorandum of Understanding between Company and Government of Maharashtra |
| SGST rates on the products; |
| Period of eligibility. |
|During the current year Company has calculated amount to claim reimbursement of SGST under the Policy which has been factored by the management for computation of government grant. Considering the above this is determined as key audit matters || We evaluated the arithmetical accuracy of the computation of government grant. |
|2 Information System and Controls: ||We have performed procedures to ensure the migration of financial data between old system and new system. |
|The Company has migrated to sap a new enterprise resource planning (ERP) system to process all accounting transactions. The new system is fully integrated financial accounting and reporting system. ||Our audit approach consisted testing of design and operating effectiveness of internal controls and substantive testing around the new ERP system. We have assessed appropriateness of system built in the ERP system for proper authorizations of transactions and posting of accounting entries. |
|The said system implemented from current year. There is shift in processing of accounting data and is thus a key audit matters |
|The combination of these tests of controls and procedures performed gave us a sufficient evidence to enable us to rely on the operations of ERP system for the purpose of the audit of the financial statements. |
Information other than financial statements and Auditors 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 financial statements and our auditors report thereon.
Our opinion on financial statements does not cover the other information and we do notexpress any form of assurance or conclusion thereon. In connection with our audit of thefinancial statement our responsibility is to read the other information and in doing soconsider whether the other information is materially inconsistent with the financialstatement or other information obtained during the course of our audit or otherwise appearto be materially misstated. If based on the work we have performed we conclude thatthere is a material misstatement of this other information; we are required to report thatfact. We have nothing to report in this regard.
Responsibilities of Management and those charged with governance for the FinancialStatements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 (the Act) with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance total comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the accounting Standards specified under section 133 of the Act. 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 appropriateimplementation and maintenance of accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. The Board of Directors are responsible for overseeing theCompany's financial reporting process.
Auditor Rs s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor Rs s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud 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 financial statements. As part of an audit in accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of the 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness 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 Rs s use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor Rs s report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor Rs s report. However future events or conditions may cause theCompany to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor Rs 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 Rs s Report) Order 2016 (theOrder) issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the Annexure A a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including other comprehensiveincome the statement of change in equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended.
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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure B.
g) In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofSection 197 read with Schedule V to the Act;
h) With respect to the other matters to be included in the Auditor Rs 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 financial statements.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For Jitendra Mishra & Company
Firm Rs s registration number: 125334W
Membership number: 116676
Place : Mumbai
Date : July 31 2020
ANNEXURE A TO THE INDEPENDENT AUDITOR Rs S REPORT
The Annexure referred to in paragraph 1 under Report on other Legal and RegulatoryRequirements in the Independent Auditor Rs s Report
of even date to the members of Damodar Industries Limited (the company) on thefinancial statements for the year ended March 31 2020
we report that:
i. In respect of its Fixed Assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information
(b) The Fixed Assets were physically verified during the year by the management inaccording with a regular programme of verification which in our opinion provides forphysical verification of major portion of fixed assets at reasonable intervals. Accordingto the information and explanation given to us and no material discrepancies were noticedon such verification.
(c) According to the information and explanations given to us and on the basis ofexamination of the records of the company the title deeds of immovable properties areheld in the name of the company
ii. In respect of its inventories:
(a) As explained to us the inventories were physically verified by the management atregular intervals during the year. In respect of inventory lying with third parties thesehave substantially been confirmed by them.
(b) The discrepancies noticed on verification between the physical stocks and bookrecords were not material.
iii. The company has not granted any loans secured or unsecured to the companiesfirms Limited liability partnership or other parties covered in the register maintainedunder section 189 of the companies Act 2013. Accordingly provisions of paragraph 3 (iii)of the Companies (Auditor Report) ordered 2016 were not applicable to the Company.
iv. The Company has not made investments and granted any loans or provided anygurantees or security to the parties covered under section 185 and 186 of the CompaniesAct 2013. Accordingly provisions of paragraph 3 (iv) of the Companies (Auditor Report)order 2016 were not applicable to the Company
v. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of sections 73 to 76 and other relevantprovisions of the Companies Act 2013 and the rules framed thereunder with regard to thedeposits accepted from the public (Refer note 17 of Financial Statements). As perinformation given to us no order under the aforesaid sections has been passed by thecompany Law Board or National Company Law Board or Reserve Bank of India or any court orany other tribunal on the company.
vi. We have broadly reviewed the cost records maintained by the Company pursuant to therules prescribed by the Central Government under sub section 1 of section 148 of theCompanies Act2013 and are of the opinion that prime facie the prescribed accounts andcost records have been maintained. We have however not made a detailed examination ofthe cost records with a view to determine whether they are accurate or complete.
vii. In respect of statutory dues:
(a) According to information and explanations given to us and on the basis of ourexamination of the records of the company has been regular in depositing undisputedstatutory dues including Provided Fund investor education and production fund employerstate insurance Income-Tax Goods & Services Tax (GST)Sales tax Service Tax Duty ofCustoms Duty of Excise Value added Tax cess and other material statutory dues with theappropriate authorities . According to the information and explanations given to us noundisputed amounts payable in respect of the aforesaid dues were outstanding as at March31 2020 for a period of more than six months from the date of becoming payable.
b) According to the information and explanations given to me there are no dues inrespect of Wealth-Tax Excise Duty Service Tax or Cess outstanding on account of anydispute. The details of dues which have not been deposited on account of dispute are givenbelow:
|. Name of the Statute || ||Amount ( Rs in Lacs) ||Period to which the amount relates ||Forum where disputes pending |
|1 DEPB Entitlement Refund ||Custom ||81.18 ||F.Y. 2010- 11 ||DGFT |
|2 Income Tax ||TDS with Interest Tax ||1.87 ||F.Y. 2018-19 & Prior years ||Income Tax Department |
viii. In our opinion and according to the information and explanations given to us thecompany has not defaulted in repayment of dues to any financial institutions and bank asat the Balance sheet date.
ix. In our opinion and according to the information and explanations given to usduring the year the company did not raised any money by way of initial public offer orfurther public offer (including debt instruments) and the term loans availed during theyear have been applied for the purpose for which they were raised.
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 audit.
xi. According to the information and explanations given to us and based on ourexamination of records of the company the company has paid/ provided for managerialremuneration in accordance with requisite approvals mandated by the provision of Section197 read with Schedule V of 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 the Order is notapplicable.
xiii According to the information and explanations given to us and based on ourexamination of records of the company transaction with the related parties are incompliance with Section 177 & 188 of the Act where applicable and details of suchtransaction have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv According to the information and explanations given to us and based on ourexamination of records of the company during the year company has made preferentialallotment of 1048376 equity shares of Rs 5/- each at premium of Rs 25/-each (Issue priceRs 30/- each) amounting to Rs 31451280/-and have been applied for the purpose for whichthey were raised. The Company has not made any preferential allotment or private placementof fully or partly convertible debentures during the year
xv According to the information and explanations given to us and based on ourexamination of records of the company the company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
xvi According to the information and explanations given to us the company is notrequired to be registered under section 45 1A of the reserve bank of india Act 1934.Accordingly paragraph 3(xvi) of the Order is not applicable.
For Jitendra Mishra & Company
Firm Rs s registration number: 125334W
Membership number: 116676
Place : Mumbai
Date : July 31 2020
Annexure B To The Independent Auditors' Report
The annexure referred to in paragraph 2 (f) under Rs Report on Other Legal andRegulatory Requirements Rs of our report of even date to the members of Damodar IndustriesLimited on the financial statements for the year ended March 31 2020.
Report on the Internal Financial controls under clause (i) of sub-section 3 ofsection143 of the companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of DamodarIndustries Limited (the Company) as of March 31 2020 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Management Rs s Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting 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 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 Rs 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material 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 March 31 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For Jitendra Mishra & Company
Firm Rs s registration number: 125334W
Membership number: 116676
Place : Mumbai
Date : July 31 2020