The Members of
Eveready Industries India Limited
Report on the Audit of the Standalone Financial Statements Disclaimer of Opinion
1. We have audited the accompanying standalone financial statements of
Eveready Industries India Limited ("the Company") which comprise theBalance Sheet as at March 31 2020 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 standalone financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas "the Standalone financial statements").
2. We do not express an opinion on the accompanying standalone financial statements ofthe Company. Because of the significance of the matters described in the Basis forDisclaimer of Opinion section of our report we have not been able to obtain sufficientappropriate audit evidence to provide a basis for an audit opinion on these standalonefinancial statements.
Basis for Disclaimer of Opinion
3. We draw your attention to Note 35.3 to the standalone financial statements thatdescribes the (i) inter-corporate deposits and (ii) corporate guarantees and post-datedcheques given to / on behalf of certain companies that are part of the Promoter Group outof which an amount of Rs 42288.69 Lakhs (including interest) and Rs 13050.00 Lakhsrespectively are outstanding as at March 31 2020. Out of the above post-dated chequeissued to one party amounting to Rs 4791.09 Lakhs was dishonoured on presentation andother party has issued notice under section 138 of the Negotiable Instruments Act. Howeverin view of the management the other party has not acted as per the terms of agreement andhas accordingly sent legal reply against the notice. The Company has also given advanceamounting to Rs 7200 Lakhs (previous year Rs 6200 Lakhs) to a company on the basis of amemorandum of understanding (MOU) towards transfer by way of assignment the leaseholdrights of a property. However neither has the deed been executed nor the refund claimedby the Company. The time period for execution was further extended till September 302020. We are unable to obtain sufficient appropriate audit evidence regarding the extentof the loss allowance /impairment to be recognised on these inter-corporate deposits andadvances and of the potential liability to be recognised for the corporateguarantees/post-dated cheques if any and the consequential impact on the standalonefinancial statements as at and for the year ended March 31 2020 and accordingly forms abasis for the Disclaimer of Opinion.
4. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the StandaloneFinancial 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. However because of the matters described in the Basis of Disclaimer ofOpinion section of our report we were not able to obtain sufficient appropriate auditevidence to provide a basis for an audit opinion on these standalone financial statements.
Emphasis of matter
5. We draw attention to Note 35.1 to the standalone financial statements which relatesto the penalty of Rs 17155 Lakhs levied by the Competition Commission of India fornon-compliance with provisions of the Competition Act 2002 against which an appeal hasbeen filed by the Company with the National Company Law Appellate Tribunal New Delhi. Asper legal advice obtained by the Company the amount of penalty cannot be reliablyestimated at this stage owing to the uncertainty of the future outcome of the litigation.
Management's and Board of Directors' Responsibilities for the Standalone FinancialStatements
6. The Company's Management and Board of Directors are responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these standalone financial statements that give a true and fair view ofthe financial position financial performance changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and the 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 Standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
7. In preparing the standalone financial statements Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
8. The Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
9. 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. 10. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalscepticism throughout the audit. We also: i. Identify and assess the risks of materialmisstatement of the standalone financial statements whether due to fraud or error designand perform audit procedures responsive to those risks and obtain audit evidence that issufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error asfraud may involve collusion forgery intentional omissions misrepresentations or theoverride of internal control. ii. Obtain an understanding of internal control relevant tothe audit in order to design audit procedures that are appropriate in the circumstances.Under Section 143(3)(i) of the Act we are also responsible for expressing our opinionwhether the Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls. iii. Evaluate theappropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management. iv. Conclude on the appropriateness of themanagement's use of the going concern basis of accounting and based on the audit evidenceobtained whether a material uncertainty exists related to events or conditions that maycast significant doubt on the Company's ability to continue as a going concern. If weconclude that a material uncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the standalone financial statements or ifsuch disclosures are inadequate to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern. v. Evaluate theoverall presentation structure and content of the standalone financial statementsincluding the disclosures and whether the standalone financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
11. Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the standalone financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the standalone financialstatements.
12. We communicate with those charged with governance regarding among other mattersthe plan6ned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them all relationshipsand other matters that may reasonably be thought to bear on our independence and whereapplicable related safeguards.
13. The financial statements for the year ended March 31 2019 which are included ascomparative figures were audited by the erstwhile auditors of the Company who issued theirdisclaimer of opinion vide their report dated May 27 2019.
Our Opinion is not modified in respect of above matter.
Report on other Legal and Regulatory Requirements
14. 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 matters specified inparagraphs 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 all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. However as describedin the Basis for Disclaimer of Opinion paragraph we are unable to obtain all theinformation and explanations which to the best of our knowledge and belief were necessaryfor the audit.
(b) Due to the possible effects of the matters described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether proper books of account as required bylaw have been kept by the Company so far as it appears from our examination of thosebooks. (c) The Balance Sheet the Statement of Profit and Loss (including othercomprehensive income) the Statement of Changes in Equity and Statement of Cash Flowsdealt with by this Report are in agreement with the books of account.
(d) Due to the possible effects of the matters described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether the aforesaid standalone financialstatements comply with the Accounting Standards specified under Section 133 of the Act.(e) Due to the possible effects of the matters described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether they have any adverse effect on thefunctioning of the Company. (f) On the basis of the written representations received fromthe directors as on March 31 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2020 from being appointed as a director in termsof Section 164 (2) of the Act.
(g) The reservation relating to maintenance of accounts and other matters connectedtherewith are as stated in the Basis for Disclaimer of Opinion paragraph read withparagraph 15(b) above.
(h) With respect to the adequacy of the internal financial controls over financialreporting with reference to these standalone financial statements of the Company and theoperating effectiveness of such controls refer to our separate Report in "AnnexureB".
(i) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 35.1 to the standalonefinancial statements;
ii. The Company did not have any long-term contracts including derivative contracts asat March 31 2020. iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
| ||For Singhi & Co. |
| ||Chartered Accountants |
| ||Firm Registration Number: 302049E |
| ||Navindra Kumar Surana |
| ||Partner |
|Place: Kolkata ||Membership Number: 053816 |
|Date: July 1 2020 ||UDIN: 20053816AAAABQ2199 |
Annexure A to Independent Auditor's Report
Referred to in paragraph 14 of the Independent Auditor's Report of even date to themembers of Eveready Industries India Limited on the standalone financial statements as ofand for the year ended March 31 2020. i. In respect of the Company's fixed assets: (a)The Company has maintained proper records showing full particulars including quantitativedetails and situation of its fixed assets. (b) The fixed assets are physically verifiedby the Management according to a phased programme designed to cover all the items over aperiod of 3 years which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the programme a portion of the fixedassets has been physically verified by the Management during the year and no materialdiscrepancies have been noticed on such verification.
(c) The title deeds of immovable properties as disclosed in Note 3 and Note 4 on fixedassets to the standalone financial statements are held in the name of the Company exceptfreehold land and structures thereon located at Maddur which is in the name of theerstwhile Company merged with the Company under Section 391 to 394 of the Companies Act1956 in terms of the approval of the Honourable High Court(s) of judicature. ii. Thephysical verification of inventory (excluding stocks with third parties) have beenconducted at reasonable intervals by the Management during the year. In respect ofinventory lying with third parties these have substantially been confirmed by them. Thediscrepancies noticed on physical verification of inventory as compared to book recordswere not material. 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 explanations given to us the Companyhas complied with the provisions of Section 185 and 186 of the Companies Act 2013 inrespect of the loans and investments made and guarantees and security provided by it. v.The Company has not accepted any deposits from the public within the meaning of Sections73 74 75 and 76 of the Act and the Rules framed there under to the extent notified. vi.We have broadly reviewed the books of accounts maintained by Company in respect ofproduct where pursuant to the rule made by the Central Government of India themaintenance of cost records has been prescribed under section 148 (1) of the CompaniesAct 2013 and are of the opinion that prima facie the prescribed records have beenmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate or complete.
ii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of Provident Fund Employees' State Insurance IncomeTax Professional Tax Sales Tax Service Tax Duty of Customs Duty of Excise ValueAdded Tax Cess Goods and Services Tax and other material statutory dues as applicablewith the appropriate authorities. According to the information and explanations given tous no undisputed amounts payable in respect of provident fund employees state insuranceincome tax goods and services tax duty of customs cess professional tax and othermaterial statutory dues were in arrears as at 31 March 2020 for a period of more than sixmonths from the date they became payable.
(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income tax sales tax value added taxservice tax goods and services tax duty of customs duty of excise which have not beendeposited with the appropriate authorities on account of any dispute other than thosementioned below:
|Name of the statute ||Nature of dues ||Amount (Rs In Lakhs) ||Period to which the amount relates ||Forum where the dispute is pending |
|The Uttar Pradesh Value Added Tax Act 2008 ||Value Added Tax ||14.47 ||2011-12 2015-16 ||Additional Commissioner of Commercial Tax |
|Central Sales Tax Act 1956 ||Sales Tax ||5.09 ||1998-1999 2004-2005 ||Additional Commissioner of Commercial Tax |
|The Orissa Sales Tax Act 1947 ||Sales Tax ||0.10 ||1999-00 ||Asst. Commissioner of Commercial Tax |
|West Bengal Value Added Tax Act 2003 ||Value Added Tax ||9.26 ||2013-14 2015-16 2017-18 ||Joint Commissioner of Commercial Tax |
|Central Sales tax Act 1956 ||Sales Tax ||6.09 ||2001-02 ||Asst. Commissioner of Commercial Tax |
|The Kerala General Sales Tax Act 1963 ||Sales Tax ||4.52 ||2000-01 to 2002-03 ||Asst. Commissioner of Commercial Tax |
|Bihar Finance Act 1981 ||Sales Tax ||0.80 ||2005-06 ||Asst. Commissioner Commercial Tax |
|Jharkhand Value Added Tax Act 2005 ||Value Added Tax ||25.10 ||2012-13 ||Joint Commissioner of Commercial Tax |
|The Kerala VAT Act 2003 ||Value Added Tax ||54.15 ||2008-2009 & 2013-2014 ||Deputy Commissioner of Commercial Tax |
|CGST & SGST Act 2017 ||Goods and Services Tax ||0.46 ||2017-2018 ||Commissioner (Appeals) GST |
|Customs Act 1962 ||Customs Duty ||31.31 ||2005-2006 ||High Court of Calcutta |
|Central Excise Act 1944 ||Excise Duty ||1496.53 ||1997-98 to 2003- 04 ||High Court of Lucknow |
|Central Excise Act 1944 ||Excise Duty ||372.21 ||2010-2011 to 2016-17 ||Customs Excise and Service Tax Appellate Tribunal |
|Central Excise Act 1944 ||Excise Duty ||78.12 ||1991-1992 to 2000-2001 2003-2004 to 2008-2009 ||Commissioner of Central Excise (Appeal) |
|Central Excise Act 1944 ||Excise Duty ||31.99 ||1996-97 to 1997-98 ||Assistant Commissioner of Central Excise |
|Finance Act 1994 ||Service Tax ||25.53 ||2012-13 to 2015-16 ||Customs Excise and Service Tax Appellate Tribunal |
|Finance Act 1994 ||Service Tax ||10.21 ||2009-10 to 2012- 13 ||Commissioner of Central Excise & Service Tax (Appeals) |
viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank. The Company did not have any borrowing from theGovernment and dues to debenture holders as at balance sheet date. ix. The Company has notraised any moneys by way of initial public offer or further public offer (including debtinstruments) during the year. In our opinion and according to the information andexplanations given to us the moneys raised by way of term loans have been applied for thepurposes for which they were obtained. x. During the course of our examination of thebooks and records of the Company carried out in accordance with the generally acceptedauditing practices in India and according to the information and explanations given to uswe have neither come across any instance of material fraud by the Company or on theCompany by its officers or employees noticed or reported during the year nor have webeen informed of any such case by the Management. xi. The Company has paid / provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting Standard (Ind AS) 24 Related Party Disclosures specified under Section 133 ofthe Act. xiv. The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.Accordingly the provisions of Clause 3(xiv) of the Order are not applicable to theCompany. xv. The Company has not entered into any non cash transactions with its directorsor persons connected with him. Accordingly the provisions of Clause 3(xv) of the Orderare not applicable to the Company. xvi. The Company is not required to be registered underSection 45-LA of the Reserve Bank of India Act 1934. Accordingly the provisions ofClause 3(xvi) of the Order are not applicable to the Company.
Annexure B to Independent Auditor's Report
Referred to in paragraph 15(h) of the Independent Auditor's Report of even date to themembers of Eveready Industries India Limited on the standalone financial statements forthe year ended March 31 2020
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Act
1. We have audited the internal financial controls over financial reporting of EvereadyIndustries India Limited ("the Company") as of March 31 2020 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.
Management's Responsibility for Internal Financial Controls
2. The Company's management and Board of Directors are responsible for establishing andmaintaining internal financial controls based on the internal financial controls overfinancial reporting with reference to these standalone financial statements 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 respective Company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial information asrequired under the Act.
3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these standalone financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")issued by the Institute of Chartered Accountants of India and the Standards on Auditingprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial control. 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 with referenceto these financial statement was established and maintained and if such controls operatedeffectively in all material respects.
4. Because of the matter described in Disclaimer of Opinion paragraph below we werenot able to obtain sufficient appropriate audit evidence to provide a basis for an auditopinion on internal financial controls over financial reporting system with reference tostandalone financial statements of the Company.
Meaning of Internal Financial Controls with reference to these Standalone FinancialStatements
5. A company's internal financial control over financial reporting with reference tothese standalone financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financial reportingwith reference to these financial statements 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) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.
Basis for Disclaimer of Opinion
6. We are unable to obtain sufficient appropriate audit evidence on which to base ouropinion on the effectiveness of Company's internal financial controls over financialreporting with reference to these standalone financial statements over the assessment ofthe extent of the loss allowance/impairment to be recognised on inter-corporate depositsand advances and of the potential liability to be recognised for the corporateguarantees/post-dated cheques given to / on behalf of certain companies that are part ofthe Promoter Group. Consequent to the material weakness in such internal controls thepossible effects on the financial statements of undetected misstatements could be bothmaterial and pervasive.
Disclaimer of Opinion
7. As described in the Basis for Disclaimer paragraph above because of thesignificance of the matters we are unable to obtain sufficient appropriate audit evidenceto provide a basis for our opinion on whether the Company had adequate internal financialcontrols over financial reporting with reference to these standalone financial statementsand whether such internal financial controls were operating effectively as at March 312020 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
We have considered the disclaimer reported above in determining the nature timing andextent of audit tests applied in our audit of the standalone financial statements of theCompany for the year ended March 31 2020 and the disclaimer has affected our opinion onthe financial statements of the standalone Company and we have issued a disclaimer ofopinion on the financial statements for the year ended on that date. (Refer paragraph 2 ofthe main audit report).
| ||For Singhi & Co. |
| ||Chartered Accountants |
| ||Firm Registration Number: 302049E |
| ||Navindra Kumar Surana |
| ||Partner |
|Place: Kolkata ||Membership Number: 053816 |
|Date: July 1 2020 ||UDIN: 20053816AAAABQ2199 |