The Shareholders of Independent Auditor's Report
The members of
IFL ENTERPRISES LIMITED
Report on the Audit of Financial Statements
We have audited the accompanying financial statements of IFL ENTERPRISES LIMITED (the Company) which comprise the balance sheet as at 31st March 2019 the statement of profit and loss statement of changes in equity and the statement of cash flows for the year then ended and notes to the financial statements including a summary of significant accounting policies and other explanatory information (hereby referred as `the financial statement').
In our opinion and to the best of our information and explanations given to us the aforesaid financial statements give the information required by the Companies Act 2013 (the Act) in the manner so required and give a true and fair view in conformity with the Indian accounting standard (Ind AS) prescribed under section 133 the Companies Act 2013 read with the Companies (Indian Accounting Standard) Rules 2015 as amended and the other accounting principles generally accepted in India: -
i. In case of the Balance Sheet of the state of affairs of the Company as at 31st March 2019;
ii. In case of Statement of Profit and Loss of the profit for the year ended on that date; and
iii. In case of Cash Flow Statement of the cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements' section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules there under and we have fulfilled our ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidences we have obtained are sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. We have determined the matters described hereunder to be key audit matters to be communicated in our report.
|S.No.||Key audit matters||Auditor's response|
|Our audit procedure included the following- |
|As per new notified Ind AS 115 method of recognition of revenue been changed to transfer of control to the customer.||We assessed the company's process to identify the impact of the new revenue accounting standard.|
|Our audit approach has considered the time of transfer of control to customer for revenue recognition.|
|We used data analytics to agree with the revenue from transaction|
|We performed year end cut off procedures to determine whether amounts were recorded in the correct period.|
|2.||Measurement of Revenue||Our audit procedure included the following-|
|We used assessment of overall control environment relevant for measurement of revenue.|
|As per new notified Ind AS 115 measurement of revenue to be made on transaction price.|
|We performed testing of journals with particular focus on manual adjustment to revenue account to mitigate the risk of manipulation of revenue and profit figures.|
Information other than the financial statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis Board's Report including Annexures to Board's Report Business Responsibility Report Corporate Governance and Shareholder's Information but does not include the financial statements and our auditor's report thereon.
Our opinion on the financial statement does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's board of directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position financial performance and cash flows of the Company in accordance with the Ind AS and the other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls that are operating effectively for insuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements whether due to fraud or error.
In preparing the financial statements management is responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain a reasonable assurance about whether the financial statements as a whole are free from material misstatement whether due to fraud or error and to issue our report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise due to fraud or error and are considered material if individually or in aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with the SAs we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
(i) Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.
(ii) Obtain an understanding of the internal controls relevant to the 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 opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
(iii) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
(iv) Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the financial statements or if such disclosures are inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained upto the date of our auditor's report. However future events or conditions may cause the Company to cease to continue as a going concern.
(v) Evaluate the overall presentation structure and content of the financial statements including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statement individually or in aggregate makes it probable that the economic decision of reasonable knowledgeable user of the financial statement may be influenced.
We consider quantitative materiality and qualitative factors in (i) Planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal controls that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonable be thought to bear on our independence and where applicable relevant safeguards.
From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when or when in extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonable be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 (`the Order') as amended issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act we give in the Annexure A a statement on the matters 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 best of 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 the Company so far as it appears from our examination of those books;
P>c. the Balance Sheet the Statement of Profit and Loss statement of changes in equity and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d. In our opinion the aforesaid financial statements comply with the Indian accounting standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014;
e. On the basis of the written representations received from the directors as on 31st March 2019 taken on record by the Board of Directors none of the directors is disqualified as on 31st March 2019 from being appointed as a director in terms of section 164 (2) of the Act.
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure-B. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting.
g. With respect to the other matters to be included in the Auditor'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 the explanations given to us:
i. The Company has disclosed the impact if any of pending litigations on its financial position in its financial statements. Refer note 30 to the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. The Company is not required to transfer any amount to the Investor Education and Protection Fund.
FOR V.N. PUROHIT & CO.
Firm Regn. No. 304040E
Membership No. 014238
New Delhi the 30th day of May 2019
ANNEXURE- A TO THE INDEPENDANT AUDITOR'S REPORT
The Annexure referred to in Paragraph 1 under the heading of Report on other Legal and Regulatory Requirements of our report of even date to the members of IFL ENTERPRISES LIMITED (the Company) for the year ended on 31st March 2019.
(i) (a) As per information and explanation given to us the Company is maintaining proper records showing full disclosures of the fixed assets;
(b) As per information and explanation given to us physical verification of fixed assets has been conducted once in a year by the management and no material discrepancies were noticed during the course of verification;
(c) According to information and explanation given to us the company does not hold any immovable property during the year dealt with by this report;
(ii) As per information and explanation given to us physical verification of inventory has been conducted once in a year by the management and no material discrepancies were noticed during the course of physical verification;
(iii) According to information and explanations given to us the Company has not granted unsecured loans to parties covered in register maintained under section 189 of the Companies Act 2013;
(iv) According to information and explanations given to us the Company has complied with provision of section 185 and section 186 of the Companies Act2013;
(v) According to information and explanations given to us the Company has not accepted public deposits and the provision of section 73 to 76 or other relevant provisions of the Companies Act 2013 and rules framed thereunder are not applicable to the Company;
(vi) According to information and explanations given to us the Company is not liable to maintain cost records as prescribed under section 148(1) of the Companies Act 2013;
(vii) (a)According to information and explanations given to us the company is generally regular in depositing undisputed statutory dues including income-tax and any other applicable statutory dues to the appropriate authorities and there are no outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable;
(b)According to information and explanations given to us there are no outstanding statutory dues on part of the Company which is not deposited on account of any dispute;
(viii) According to information and explanations given to us the company has not obtained any loans and borrowings from any financial institution bank government or dues to debenture holders and hence question of default of repayment does not arise;
(ix) According to information and explanations given to us the Company has not raised money by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under sub- clause (ix) of Paragraph 3 of the Order is not applicable;
(x) To best of our knowledge and according to information and explanations given to us no fraud by the company and no fraud on the company by its officers employees has been noticed or reported during the year;
(xi) According to information and explanations given to us the Company has paid managerial remuneration in accordance with applicable provisions of the Companies Act 2013;
(xii) As per information the Company is not a Nidhi Company hence reporting under sub- clause (xii) of the Paragraph 3 of the Order is not applicable;
(xiii) According to information and explanations given to us all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act 2013 wherever applicable and the details have been disclosed in the financial statements etc. as required by the applicable Indian accounting standards;
(xiv) According to information and explanations given to us the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year;
(xv) According to information and explanations given to us the Company has not entered into non- cash transactions with directors or persons connected with him;
(xvi) According to information and explanations given to us the Company is not a Non- Banking Financial Company and does is required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
Signed for the purpose of identification
FOR V.N. PUROHIT & CO.
Firm Regn. No. 304040E
Membership No. 014238
New Delhi the 30th day of May 2019
ANNEXURE- B TO THE INDEPENDANT AUDITOR'S REPORT
Report on the Internal Financial Controls under Clause (i) of Sub- section (3) of Section 143 of the Companies Act 2013
We have audited the internal financial controls over financial reporting of IFL ENTERPRISES LIMITED as on 31st March 2019 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for the Internal Financial Controls
The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Control over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to company's policies the safeguarding of its assets the prevention and detection of fraud and errors the accuracy and completeness of accounting records and the timely preparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the Guidance Note) and the Standards on Auditing issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act 2013 to the extent applicable to an audit of internal financial controls both applicable to an audit of Internal Financial Controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material aspects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial control system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment including the assessment of risks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidences we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company's internal financial control over financial reporting includes those policies and procedures that: -
(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and the receipt and expenditures of the Company are being only in accordance with authorizations of management and directors of the Company; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition use or disposition of the Company'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 financial reporting including the possibility of collusion or improper management override of controls material misstatements due to error or fraud may occur and could not be detected. Also projections of any evaluation of the internal financial control over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may became inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material aspects an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2019 based on the internal financial controls over financial reporting criteria considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over
Financial Reporting issued by the Institute of Chartered Accountants of India.
FOR V.N. PUROHIT & CO.
Firm Regn. No. 304040E
Membership No. 014238
New Delhi the 30th day of May 2019