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Indiamart Intermesh Ltd.

BSE: 542726 Sector: Others
NSE: INDIAMART ISIN Code: INE933S01016
BSE 00:00 | 19 Aug 4292.80 -145.85
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NSE 00:00 | 19 Aug 4297.70 -137.00
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OPEN 4480.00
PREVIOUS CLOSE 4438.65
VOLUME 10654
52-Week high 9700.00
52-Week low 3676.05
P/E 49.30
Mkt Cap.(Rs cr) 13,209
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 4480.00
CLOSE 4438.65
VOLUME 10654
52-Week high 9700.00
52-Week low 3676.05
P/E 49.30
Mkt Cap.(Rs cr) 13,209
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Indiamart Intermesh Ltd. (INDIAMART) - Auditors Report

Company auditors report

To the Members of IndiaMART InterMESH Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

We have audited the standalone financial statements of IndiaMART InterMESH Limited("the Company") which comprise the standalone balance sheet as at 31 March2021 and the standalone statement of profit and loss (including other comprehensiveincome (loss)) standalone statement of changes in equity and standalone statement of cashflows for the year then ended and notes to the standalone financial statements includinga summary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and profit and other comprehensiveincome (loss) changes in equity and its cash flows for the year 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 Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the standalone financial statements.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

DESCRIPTION OF KEY AUDIT MATTER

Revenue Recognition (See note 2.3(c) and 19 to the standalone financial statements)

The key audit matter How the matter was addressed in our audit
The Company generates revenue primarily from web services and follows a prepaid model for its business. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
Revenue from web services is recognised over the period of the contract as and when the Company satisfies performance obligations by actually rendering the promised services to its customers. We assessed the appropriateness of the revenue recognition accounting policy and its compliance with applicable accounting standards.
These services are delivered using IT systems which manage very high volume on daily basis and generate reports from which the Company recognises revenue and hence there is inherent risk around the existence and accuracy of revenue recognition. We evaluated the design and implementation of key internal financial controls and operating effectiveness of the relevant key controls with respect to existence and accuracy of revenue recognition on selected transactions.
We have identified revenue recognition from web services as a key audit matter because of the significance of web service revenue to the financial statements and its recognition based on high volume of data generated by internal IT systems. We with the involvement of IT specialists evaluated the design implementation and operating effectiveness of management's general IT controls and key application controls over the Company's IT systems which govern revenue recognition including access controls controls over program changes and interfaces between different systems.
We selected a sample of transactions using statistical sampling and performed tests of details including reading the contract identifying performance obligation and its link with actual rendition to assess whether the criteria for revenue recognition are met.
We tested completeness and accuracy of web services revenue and collection from underlying relevant source documents generated by IT systems with accounting system.
We assessed the adequacy of disclosures in the standalone financial statements.

OTHER INFORMATION

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditors'report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

MANAGEMENT'S AND BOARD OF DIRECTORS' RESPONSIBILITY FOR THE STANDALONE FINANCIALSTATEMENTS

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income (loss) changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the 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 were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the 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 the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

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.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

o Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

o Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to standalone financial statements inplace and the operating effectiveness of such controls.

o Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

o Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

o Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant de_ciencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. (A) As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The standalone balance sheet the standalone statement of profit and loss(including other comprehensive income (loss)) the standalone statement of changes inequity and the standalone statement of cash flows dealt with by this Report are inagreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with the IndAS specified under section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' 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 as at 31 March 2021 onits financial position in its standalone financial statements

- Refer Note 35 to the standalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company; and

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from

8 November 2016 to 30 December 2016 have not been made in these standalone financialstatements since they do not pertain to the financial year ended 31 March 2021.

(C) With respect to the matter to be included in the Auditors' Report under section197(16): In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

Annexure A to the Independent Auditors' Report on the Standalone Financial Statementsof IndiaMart InterMesh Limited for the year ended 31 March 2021

Referred to in paragraph 1 under the heading ‘Report on Other Legal and RegulatoryRequirements' of our report of even date to the standalone financial statements of theCompany for the year ended 31`March`2021 we report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assetswhereby all the fixed assets are physically verified once in three years. In our opinionthis periodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its fixed assets. As per the programme all the fixed assetswere physically verified during the previous year and no material discrepancies werenoticed on such verification.

(c) According to the information and explanations given to us in respect of immovableproperties taken on lease and disclosed as right-of-use-assets in the standalone financialstatements the lease agreements are in the name of the Company.

(ii) According to the information and explanations given to us the Company's businessdoes not involve holding of any inventory. Accordingly paragraph 3(ii) of the Order isnot applicable.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register required under section 189 of theCompanies Act 2013. Accordingly the provisions of paragraph 3(iii) of the Order are notapplicable.

(iv) According to the information and explanations given to us the Company has notentered into any transactions related to loans investments guarantees and securities towhich the provisions of Section 185 of the Act are applicable. Further according to theinformation and explanations given to us and on the basis of our examination of therecords of the Company the Company has complied with the provisions of section 186 of theCompanies Act 2013 with respect to investment made by the Company.

(v) As per the information and explanations given to us the Company has not acceptedany deposits as mentioned in the directives issued by the Reserve Bank of India and theprovisions of section 73 to 76 or any other relevant provisions of the Companies Act 2013and the rules framed there under. Accordingly para 3(v) of the Order is not applicable tothe Company.

(vi) According to the information and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under sub-section (1) of section 148 ofthe Companies Act 2013 for any of the services rendered by the Company. Accordinglypara 3(vi) of the Order is not applicable to the Company.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income-tax service tax goods and service tax cess and any other statutorydues have generally been regularly deposited during the year by the Company with theappropriate authorities. The provisions of sales tax duty of customs value added tax andduty of excise are not applicable to the Company.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxgoods and service tax cess and any other statutory dues were in arrears as at 31 March2021 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome-tax or Sales tax or Service tax or Goods and Services tax or duty of Customs orduty of Excise or Value added tax which have not been deposited by the Company on accountof any dispute except for the following:

Name of the Statute Nature of the Dues Amount (INR in million) Period (Financial Year) Forum where dispute is pending
Income Tax Act 1961 Income Tax 2.96* 2009-10 High Court-Delhi
Income Tax Act 1961 Income Tax 0.26* 2012-13 Commissioner of Income Tax Appeals
Income Tax Act 1961 Income Tax 0.70* 2013-14 Income Tax Appellate Tribunal
Income Tax Act 1961 Income Tax 3.03* 2016-17 Commissioner of Income Tax Appeals
Finance Act 1994 Service Tax 6.78 2006-07 to 2011-12 CESTAT
Finance Act 1994 Service Tax 1.30 2013-14 to 2015-16 Commissioner of GST & Central Excise
Finance Act 1994 Service Tax 15.38 2013-14 to 2017-18 Commissioner of GST & Central Excise

* Represents amount adjusted with brought forward losses/unabsorbed depreciation in thedemand orders calculated basis the applicable tax rate of respective years.

(viii) According to the information and explanations given to us the Company did nothave any outstanding loans or borrowings from financial institutions or banks orgovernment or debenture holders during the year. Accordingly paragraph 3(viii) of theOrder is not applicable to the Company.

(ix) According to the information and explanations given to us the Company has notraised any money by way of initial public offer or further public offer (including debtinstrument) and term loans. Accordingly paragraph 3(ix) of the Order is not applicable tothe Company. However the Company has raised money by way of Qualified InstitutionalPlacement please refer to paragraph 3(xiv) details below.

(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 year.

(xi) In our opinion and according to the information and explanations given to us andbased on examination of the records of the Company the Company has paid/providedmanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act 2013.

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Accordingly paragraph 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us andon the basis of our examination of the records of the Company all the transactions withthe related parties are in compliance with section 177 and 188 of the Companies Act 2013where applicable and the details of such transactions have been disclosed in thestandalone financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanation given to us and on the basis of ourexamination of records of the Company the Company has made private placement of sharesduring the year the Company raised money by way of Qualified Institutional Placement(QIP). The proceeds raised from QIP were INR 10701.66 Million. The proceeds of the issue(net of related expense of INR 189.67 Million) are to augment for future growth andexpansion. The net proceeds of INR 10511.99 Million pending utilisation for the objectsof QIP have temporarily been invested in liquid instruments. Further the Company has notmade any preferential allotment or fully or partly convertible debentures during the year.

(xv) According to information and explanations given to us the Company has not enteredinto any non-cash transactions with directors or persons connected with them. Accordinglyparagraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

Annexure B to the Independent Auditors' Report on the Standalone Financial Statementsof IndiaMART InterMESH Limited for the year ended 31 March 2021

REPORT ON THE INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE AFORESAID STANDALONEFINANCIAL STATEMENTS UNDER CLAUSE _I_ OF SUB_SECTION 3 OF SECTION 143 OF THE COMPANIESACT 2013

(Referred to in paragraph 2(A)(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

OPINION

We have audited the internal financial controls with reference to standalone financialstatements of IndiaMART InterMESH Limited ("the Company") as of 31 March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols with reference to standalone financial statements were operating effectively asat 31 March 2021 based on the internal financial controls with reference to standalonefinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (the "Guidance Note").

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the standalone financial statementswhether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to standalone financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE FINANCIALSTATEMENTS

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to standalone financial statements include thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL

CONTROLS WITH REFERENCE TO STANDALONE FINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Co. LLP

Chartered Accountants

ICAI Firm registration No: 101248W/W-100022

Kanika Kohli

Partner

Membership No: 511565

ICAI UDIN: 21511565AAAAAW5377

Place: Gurugram

Date: 29 April 2021

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