To the Members of IMP Powers Limited
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of IMP Powers Limited("the Company") which comprise the balance sheet as at 31st March 2020 and thestatement of Profit and Loss (statement of changes in equity) and statement of cash flowsfor the year then ended and notes to the IND As financial statements including significantaccounting summary of policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone IND As financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2020 and Loss (changes in equity) and its cash flows for theyear ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial 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 Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to Note 41 of the standalone Ind AS financial statements whichstates the impact of Coronavirus Disease-2019 (COVID-19) on the operations of the Company.Our opinion is not qualified 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 financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements and in forming ouropinion thereon and we do not provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to becommunicated in our report.
|Key Audit Matter ||Auditor's Response |
|Litigations provisions and Contingent Liabilities ||Principal Audit Procedures |
|The Company has several litigations for direct taxes matters i .e. Income Tax under dispute which involves significant judgment and estimates on the possible outcome of the litigations and consequent provisioning thereof or disclosure as contingent liabilities .Refer Note No. 34.1 of INDAs Standalone financial statement. ||As part of the audit process we obtained from the management details of matters under disputes including ongoing and completed tax assessments demands and other litigations. |
| ||Our Audit approach for the above consists of the following audit procedures. |
| ||Evaluation and testing of the design of internal controls followed by the Company relating to litigations and open tax positions for the direct tax matters i .e. Income Tax and processed followed to decide provisioning or disclosure as contingent liabilities; |
| ||Discussed with Company's legal team and taxation team for sufficientunderstanding impacting the Company. |
| ||We involved our internal expert to evaluate the management's underlying judgments in making their estimates with regard to such matters. |
Information other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe 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 thefinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. 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.
Responsibilities of Management for the Ind AS Standalone Financial Statements
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 standalone financial statements that give a true and fair view of the financialposition financial performance (changes in equity) and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror. In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind As 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'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.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the financial performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
2. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 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.
3. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
4. 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 inadequate to modify our opinion. Our conclusions are based on the auditevidence 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.
5. 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. Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies 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 withthose charged with governance we determine those matters that were of most of the currentsignificance period and are in the audit of therefore financial the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable. As required bySection 143(3) of the Act we report that:
1. 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.
2. 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 and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus.
3. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of accounts.
4. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
5. On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (2) of the Act.
6. 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".
7. 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: TheCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statements Refer Note No.34.1 in its financial position in its standalone Ind ASfinancial statements The Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses.
There were no amounts which were required to be transferred to the Investor Educationand Protection Fund by the Company.
8. Other Matters
Due to the COVID-19 related lock-down restrictions management was unable to performyear end physical verification of inventories at its locations and subsequent to theyear-end. Also we were not able to physically observe the stock verification processwhere carried out by the management. Consequently we have performed alternate proceduresto audit the existence of inventory as per the guidance provided in SA 501 "AuditEvidence - Specific Considerations for Selected Items" which includes inspection ofsupporting documentation relating to purchases and consumption results of cyclical countperformed by the Management through the year and such other third party evidences whereapplicable and have obtained sufficient appropriate audit evidence to issue ourunmodified opinion on the Statement.
The Annexure A referred to in Independent Auditors' Report to the members of theCompany under the heading Report on Other Legal and Regulatory Requirements' on thefinancial statements for the year ended 31 March 2020 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed
(b) As explained to us the fixed assets have been physically verified by managementduring the year as per phased programme of verification. In accordance with this programa portion of the fixed assets has been physically verified by the management during theyear and no material discrepancies have been noticed on such verification. In our opinionthis periodicity of physical verification is reasonable having regard to the size ofcompany and nature of its assets.
(c) The title deeds of the immovable properties as disclosed in schedule of fixedassets to the financial statements are held in the name of the Company.
(ii) The physical verification of inventory has been conducted at reasonable intervalsby the management during the year. In respect of inventory lying with third parties thesehave been confirmed by them. In our opinion the frequency of verification is reasonable.No material discrepancies have been noticed on such verification.
(iii) In our opinion and according to the information and explanation given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnership or other parties covered in the register maintained under Section189 of the Act. Accordingly paragraph 3 (iii) (a) 3 (iii) (b) and 3 (iii) (c) of theorder are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to usduring the year the Company has not granted any loans or provided any guarantees orsecurity in respect of any loans to any party covered under Section 185 of the Act. TheCompany has made no investments which are covered under provision of Section 186 of theAct. Hence the clause is not applicable.
(v) The Company has not accepted any deposits from the public within the meaning ofSection 73 to 76 of the Act and Rules framed there under to extent notified.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the order made by the Central Government for maintenance of cost records prescribedunder sub-section 1 of section 148 of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have however not made adetailed examination of the said records with a view to determine whether they areaccurate or complete.
(vii) According to the information and explanations given to us and the records of theCompany examined by us in our opinion
a) the Company is regular in depositing the undisputed statutory dues includingprovident fund employee state insurance income tax sales tax service tax Goods andService Tax duty of customs duty of excise value added tax cess and any other materialstatutory dues as applicable with the appropriate authorities.
b) According to information and explanation given to us no undisputed amounts payablein respect of provident fund employee state insurance income tax sales tax servicetax Goods and Service Tax duty of customs duty of excise value added tax cess and anyother material statutory dues were in arrears as at 31 March 2020 for a period of morethan six months from the date they became payable.
c) According to the information and explanations given to us and the records of thecompany examined by us the dues in respect of Income tax sales tax duty of customsservice tax Goods and Service Tax entry tax value added tax on account of any disputeare as follows.
Amount in Cr.
|Name of the Statute ||Period to which the amounts relates ||Commissione rate ||Deposit ||Net |
|Income Tax Act1961 (Tax / Interest / Penalty) ||2011-12 to 2015-16 ||6.95 ||0 ||6.95 |
(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 loan or borrowingfrom any financial institution bank or government. (ix) In our opinion and according tothe information and explanation given to by the management the term loans were appliedfor the purpose for which the loans were obtained.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanation given to us we have neither come across anyinstances officers or employees noticed or reported material fraud by the Companyon the Company by its during the year nor have we been informed of any such case by themanagement.
(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the 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 the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required under IndAS andCompanies Act 2013.
(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 under review and hence reporting under paragraph 3(xiv) of the Order is notapplicable to the Company.
(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 any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable to the Company.
(xvi)The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the order are notapplicable to the Company.
Annexure - B to the Auditors' Report
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 of ImpPowers Limited ("the Company") as of 31 March 2020 in conjunction with ouraudit of the financial statements of the Company for 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 Reportingissued by the Institute of Chartered Accountants of India (ICAI').Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required 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 Companies Act 2013 to the extentapplicable to an audit of internal financial audit of Internal Financial Controls andboth issued by the Institute of Chartered Accountants of India. 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. Webelieve that the audit evidence we have obtained is appropriate to provide a basis for ouraudit opinion on the Company's internal financial controls system over financialreporting.
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'sinternalfinancialcontrol 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 accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorizations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould 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 financialcontrols 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 and to the best of our information & according to the explanationsgive to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial reporting wereoperating effectively as at 31 March 2020 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.
| ||For V.S. SOMANI & CO. |
| ||Chartered Accountants |
| ||Firm Registration Number: 117589W |
| ||CA Vidyadhar Somani |
| ||Proprietor |
|Place: Mumbai ||Membership No: 102664 |
|Date: July 31 2020 ||UDIN No. 20102664AAAAFS6413 |