TO THE MEMBERS OF ENVAIR ELECTRODYNE LIMITED
Report on the Financial Statements
1. We have audited the accompanying financial statements of ENVAIR ELECTRODYNELIMITED (The Company) which comprise the Balance Sheet as at March 31 2021 theStatement of Profit and Loss (including other comprehensive income) the Statement of CashFlow and the Statement of Changes in Equity for the year then ended and a summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas "financial statements).
2. 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 the Actin the manner so required and except for the effects of the matters described in thebasis for qualified opinion paragraph give a true and fair view in conformity withthe Indian Accounting Standards prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended ("Ind AS) andother accounting principles generally accepted in Indiaof the state of affairs of theCompany as at March 31 2021 its loss (financial performance including othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
3. We conducted our audit of the financial statements in accordance with the Standardson Auditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards 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 (ICAI) together with the independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made there underand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.
Basis for Qualified Opinion
4. We invite attention to the Note 33.17 in financial statements stating that thebalances of parties and accounts under head trade receivable trade payable advances anddeposits are subject to confirmation and reconciliation. Financial impact of the same hasnot been ascertained by the management. In view of this we were unable to determinewhether any adjustments are necessary in respect of the same.
Emphasis of Matter
5. We invite attention to Note 33.03 in the financial statements explaining the basisfor preparation of financial statements on going concern assertion based on the managementrepresentations. This report is not qualified in this matter.
6. We invite attention to the Note 33.26 in financial statements stating that theimpact of noncompliance with some of the Indian Accounting Standards (Ind AS) isinsignificant. The impact of same is not ascertained. This report is not qualified in thismatter.
Key Audit Matters
7. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
|Key Audit Matter ||Auditor's Response |
|Verification of Full and Final settlement dues paid to workers ||Principal Audit Procedures |
|The Company has paid full and final settlement dues to the workers / employees who resigned during the year. Almost all the workers working on shop floor have resigned.. ||We have verified the employee record working documents and accounting entries in this respect to confirm that there is no mis-statement in books. |
|Payment of tax dues under the Vivad Se Vishwas Scheme of Central Government ||Principal Audit Procedures |
|During the year the Company opted for the Vivad Se Vishwas Scheme of income tax department to settle old tax and TDS demand / dues for two years. ||We have verified relevant documents record and forms which were submitted by the Company to department and also verified its compliance. Adequate provisions were made in accounts and charge has been created against profit. |
Information Other than the Financial Statements and Auditor's Report Thereon
8. The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our 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.
Management's Responsibility for the Financial Statements
9. 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 including other comprehensive income cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified in the Companies(Indian Accounting Standards) Rules 2015 under Section 133 of the Act.
10. This responsibility also includes the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
11. 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 the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Financial Statements
12. 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's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
13. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
a. Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
b. Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act 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.
c. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
d. 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
e. 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.
14. Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
15. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
16. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
17. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
18. As required by the Companies (Auditor's Report) Order 2016 ("theOrder) issued by the Central Government of India in terms of sub-section 11 ofSection 143 of the Act we give in the "Annexure A a statement on the mattersspecified in paragraph 3 and 4 of the Order to the extent applicable.
19. 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 except asstated in Note 33.17 in the financial statements the balances of accounts and partiesunder head trade receivable payable deposits and loans & advances are subject toconfirmation and reconciliation.
b. In our opinion except for the effect of the matters described in the Basis forQualified Opinion paragraph above proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;
c. The Balance Sheet the Statement of Profit and Loss the Statement of Cash Flows andthe Statement of Changes in Equity dealt with by this Report are in agreement with therelevant books of account.
d. In our opinion except for the matters described in the basis for qualified opinionparagraph the aforesaid financial statements comply with the Indian Accounting Standardsprescribed under Section 133 of the Companies Act 2013 read with Rule 7 of Companies(Accounts) Rules 2014 and amendments thereof.
e. On the basis of the written representations received from the directors as on March31 2021 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2021 from being appointed as a director in terms of Section164 (2) of the Act.
f. The going concern matter described under the Material Uncertainty Related to GoingConcern paragraph above in our opinion may have an adverse effect on the functioning ofthe Company.
g. 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.
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 opinion and to the best of our information and according to the explanationsgiven to us no remuneration was paid by the Company to its directors during the year.
i. The qualifications relating to maintenance of accounts and other matters connectedtherewith are as stated in the basis for Qualified Opinion paragraph above.
j. With respect to the other matters to be included in the Aud itor'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 did not have any long-term contract including derivative contracthaving any material foreseeable losses for which provision was requiredto be made underthe applicable law or accounting standard.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
| ||For C V Chitale & Co Chartered Accountants FRN:126338W |
|Place: Pune Date: June 30 2021 ||CA Abhay Avchat Partner Membership No. 112265 |
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT
With reference to the Annexure referred to in paragraph 18 (Report on Other Legal andRegulatory Requirements) of the Companies' Auditors' Report to the members of the Companyon the financial statements for the year ended March 312021 we report that:
i. In respect of its fixed assets:
a) The Company is in process of updating its fixed asset register showing fullparticulars including quantitative details and situation of fixed asset.
b) The fixed assets have not been physically verified during the year.
c) According to the information and explanation given to us the records examined by usand based on the examination of the conveyance deeds and lease deeds provided to us wereport that in respect of immovable properties of land and buildings that have been takenon lease and disclosed as fixed assets in the financial statements the lease agreementsare in the name of the Company.
ii. In respect of its inventories:
a) The Management has conducted physical verification of inventory at reasonableintervals. In our opinion the frequency of verification is reasonable.
b) According to information and explanation given to us the procedures of physicalverification of inventory followed by the management are reasonable and adequate inrelation to the size and the nature of its business.
c) The Company is maintaining reasonably proper record showing quantitative details ofinventory. As informed to us the discrepancies noticed on verification between physicalstock and book records have been properly dealt with accounts.
iii. As per the information and explanations given to us the Company has not grantedany loans secured or unsecured to companies firms or other parties covered in theregister maintained under Section 189 of the Companies Act 2013.
iv. As informed to us the Company has not entered into any transaction which attractsthe provisions of the Section 185 and 186 of the Companies Act2013.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted deposit from the public hence the directives issued by theReserve Bank of India and provisions of the sections 73 to 76 or any other relevantprovisions of the Companies Act and rules framed there under are not applicable to it.According to information and explanation given to us no order has been passed against theCompany by Company Law Board or National Law Tribunal or Reserve Bank of India or anyCourt or any other Tribunal.
vi. To the best of our information and as per the explanation given to us arequirement relating to maintenance of cost records is not applicable to the Company;since its turnover is below the threshold limit prescribed by the Central Government undersection 148(1) of the Act.
vii. In respect of statutory dues:
a) According to the information & explanation given to us and according to thebooks & records the company is generally regular in depositing undisputed statutorydues including provident fund employees state insurance income tax sales tax servicetax duty of customs duty of excise value added tax goods and service tax cess and anyother statutory dues to the appropriate authorities except in few instances delay inpayment were observed.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees state insurance income tax sales taxservice tax duty of custom duty of excise value added tax goods and service tax cesswere outstanding as at March 31 2021 for a period of more than six months from the dateof becoming payable except amount payable with respect to VAT of Rs 550000/-.
b) According to the information and explanation given to us there are no dues ofincome-tax wealth-tax sales tax service tax custom duty excise duty value added taxand cess which have not been deposited on account of any dispute except the following: -
|Nature of the Statue ||Nature of Dues ||Amount due (In Rs) ||Period to which amount relates ||Forum at which dispute is pending |
|Maharashtra Value Added Tax Act 2002 & Central Sales Tax ||VAT Liability ||100000/- ||FY 2014-15 ||Asst. Commissioner of Sales Tax Pune |
|Income Tax Act 1961 ||Income Tax Penalty ||648900/- ||FY 2012-13 ||Commissioner of Income Tax (A) Pune |
|Income Tax Act 1961 ||Late filing fee of TDS ||227596/- ||FY 2008-09 to 2014-15 ||Commissioner of Income Tax (A) Pune |
viii. In our opinion and according to the information and explanation given to us theCompany has generally not defaulted in repayment of loan or borrowings to banks financialinstitutions and Government. The Company has not borrowed any sum through debentures.
ix. According to the information and explanation given to us the Company has notraised any money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Accordingly paragraph 3 (ix) of the Order isnot applicable.
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 the Company has not paid/ provided for managerial remuneration during the year.
xii. As per the information and explanation given to us the Company is not a Nidhicompany. Accordingly Clause (xii) of the Order is not applicable
xiii. According to the information and explanations given to us transactions withrelated parties are in compliance with provisions of section 177 and 178 of the Act anddetails of such transactions have been disclosed in the financial statement as required bythe applicable accounting standards.However while reporting under this sub-clause we haverelied on the list of related parties and transactions with them as provided to us by themanagement.
xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly Clause (xiv) of the Order is not applicable.
xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them as per section 192 of CompaniesAct 2013. Accordingly clause (xv) of the Order is not applicable.
xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For C V Chitale & Co |
| ||Chartered Accountants |
| ||FRN:126338W |
| ||CA Abhay Avchat |
|Place: Pune ||Partner |
|Date: June 30 2021 ||Membership No. 112265 |
ANNEXURE B' TO THE INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTSOFENVAIR ELECTRODYNE LIMITED FOR THE YEAR ENDED ON MARCH 31 2021
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 over financial reporting with referenceto financial statements of Envair Electrodyne Limited ("the Company) as ofMarch 31 2021 in conjunction with our audit of the financial statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls 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 Reporting (the"Guidance Note) issued by the Institute of Chartered Accountants of India (the"ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting (the "Guidance Note) and theStandards on Auditing prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
Because of the matter described in Disclaimer of Opinion paragraph below we were notable to obtain sufficient appropriate audit evidence to provide a basis for an auditopinion on Internal financial controls system over financial reporting of the Company.
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
A. Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
B. Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of the 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 and directors of the company; and
C. 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.
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.
Disclaimer of Opinion Framework for Internal Financial Control over Financial Reportingnot established but does not Impact the audit opinion on Financial Statements
According to the information and explanation given to us the Company has notestablished its internal financial control over financial reporting on criteria based onor considering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute ofChartered Accountants of India.
Because of this reason we are unable to obtain sufficient appropriate audit evidenceto provide a basis for our opinion whether the Company has adequate internal financialcontrols over financial reporting and whether such internal financial controls wereoperating effectively as at March 31 2021.
We have considered the disclaimer reported above in determining the nature timing andextent of audit tests applied in our audit of the financial statements of the Company andthe disclaimer does not affect our opinion on the financial statements of the Company.
| ||For C V Chitale & Co |
| ||Chartered Accountants |
| ||FRN: 126338W |
| ||CA Abhay Avchat |
|Place: Pune ||Partner |
|Date: June 30 2021 ||Membership No. 112265 |