To the Members of
INDO-GLOBAL ENTERPRISES LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of INDO-GLOBAL ENTERPRISESLIMITED ("the Company") which comprise the standalone balance sheet as atMarch 31 2019 and the standalone statement of profit and loss (including othercomprehensive income) standalone statement of changes in equity and standalone statementof cash flows for the year then ended and notes to the standalone financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation.
In our opinion and to the best ofour 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 March 31 2019 and profit and other comprehensiveincome 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 financialstatementsunder the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion
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.
[i] Provisions for taxation litigation and other significant provisions
Seenote 2.3(i) and 21to the standalone financial statements
|The key audit matter ||How the matter was addressed in our audit |
|Accrual for tax and other contingencies requires the Management to make judgements and estimates in relation to the issues and exposures arising from a range of matters relating to direct tax indirect tax transfer pricing arrangements claims general legal proceedings environmental issues and other eventualities arising in the regular course of business. ||Our audit procedures included: |
| || We tested the effectiveness of controls around the recognition of provisions. |
| || We used our subject matter experts to assess the value of material provisions in light of the nature of the exposures applicable regulations and related correspondence with the authorities. |
| || We challenged the assumptions and critical judgements made by management which impacted their estimate of the provisions required considering judgements previously made by the authorities in the relevant jurisdictions or any relevant opinions given by the Company's advisors and assessing whether there was an indication of management bias. |
|The key judgement lies in the estimation of provisions where they may differ from the future obligations. By nature provision is difficult to estimate and includes many variables. Additionally depending on timing there is a risk that costs could be provided inappropriately that are not yet committed. || |
| || We discussed the status in respect of significant provisions with the Company's internal tax and legal team. |
| || We performed retrospective review of management judgements relating to accounting estimate included in the financial statement of prior year and compared with the outcome. |
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 auditor'sreport thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form ofassurance 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 Responsibility for the Standalone Financial Statements
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 changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements management and Board of Directors areresponsible 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.
Board of Directors is also responsible for overseeing the Company's financial reportingprocess.
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 scepticism throughout the audit. We also:
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 orthe override of internalcontrol.
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 financial statements in place andthe operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to ceasetocontinue as a going concern.
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 amanner 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 deficiencies in internal controlthat 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 auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine thata 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 (Auditor's Report) Order2016 ("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 and4 of theOrder 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 bestof our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion proper books of account as required bylaw have been kept by theCompany so far as it appearsfrom our examination of those books.
c) The standalone balance sheet the standalonestatement of profit and loss (includingothercomprehensive income) the standalone statementof changes in equity and thestandalone statement ofcash flows dealt with by this Report are in agreementwith the booksof account.
d) In our opinion the aforesaid standalone financialstatements comply with the Ind ASspecified under section 133 of the Act.
e) On the basis of the written representations receivedfrom the directors as on 31March 2019 taken on recordby the Board of Directors none of the directors isdisqualifiedas on March 31 2019 from being appointedas a director in terms of section 164(2) of theAct.
f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".
3. 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 impactof pending litigations as at March 31 2019 onits financial position in its standalone financial statements-Refer Note 21 to thestandalone financial statements.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.
iii. There has been no delay in transferring amountsrequired to be transferred to theInvestor Educationand Protection Fund by the Company.
iv. The disclosures in the standalone financial statementsregarding holdings as well asdealings in specified bank notes during the period from 8 November 2016to 30 December 2016have not been made in these standalone financial statements since they do notpertain tothe financial year ended March 31 2019.
4. With respect to the matter to be included in the Auditor's Report under section197(16): According to the information and explanations given to us and the records of theCompany examined by usthe Company has not paid remuneration to its directors during thecurrent year.
Further The Ministry of Corporate Affairs has not prescribed other details undersection 197(16) which are required to be commented upon by us
Annexure A to the Independent Auditor's report on the standalone financialstatements of for the year ended March 31 2019 (Referred to in paragraph 1 underReport on Other Legal andRegulatory Requirements' section of our report of evendate)
(i) There are no fixed assets. Therefore reporting under clause 3(i) of the order isnot applicable. (ii) There are no inventories. Therefore reporting under clause 3(ii) ofthe order is not applicable.
(iii) According to 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 maintained under section 189 of theAct. Accordingly paragraph 3 (iii) of the Order is not applicable to the Company.
(iv) [a] The Company has not granted any loan to or provided any guarantee or securityin connection with the loans taken by the parties covered under section 185 of the Act.
[b] The Company has not made any investment or acquired security of any other bodycorporate or given guarantee or security in respect of loan taken by anyother bodycorporate or person.
[c] The Company has complied with the provisions of section 186 of the Act in respectof investments made or loans or guarantee or securityprovided to the parties covered undersection 186.
(v) According to information and explanations given to us the Company has not acceptedany deposits from the public within the meaning of the directives issued by the ReserveBank of India provisions of section 73 to 76 of the Act any other relevant provisions ofthe Act and the relevant rules framed thereunder.
(vi) TheCentral Government has not prescribed the maintenance of cost records underSection 148 of the Act for any of the services rendered by the Company.
(vii) In respect of the statutory dues
a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is not regular in depositing theundisputed statutory dues including provident fund employees state insurance income taxgoods and service tax duty of customs cess professional tax and other materialstatutory dues as applicable with the appropriate authorities.
b) According to the information and explanations given to us and the records of theCompany examined by us the following undisputed amounts payable in respect of providentfundemployees state insurance income tax goods and service tax duty of customs cessprofessional tax and other material statutory dues were in arrears as at March 31 2019for a period of more than six months from the date they became payable:
|Name of the Statute ||Nature of the Dues ||Amount (Rs.) |
|The Income Tax Act 1961 ||Self Assessment tax and applicable interest thereon ||5559190 |
|The Finance Act 1994 ||Output service tax (and interest thereon)on sale of taxable services ||1840236 |
c) According to the information and explanations given to us there are no dues ofincome tax sales tax value added tax service tax goods and service tax duty ofcustoms duty of excise which have not been deposited with the appropriate authorities onaccount of any dispute.
(viii) The Company has not taken any loan or borrowingform the banks and financialinstitutions or government nor has the Company issued debentures. Accordingly paragraph3 (viii) of the Order is not applicable to the Company.
(ix) The Company has not raisedany moneys by way of initial public offer furtherpublic offer (including debt instruments) or term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable to the Company.
(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) According to the information and explanations given to us and based on ourexamination of the records the Company has notpaid or provided for managerialremuneration. Accordingly paragraph 3 (xi) of the Order is not applicable to the Company.
(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 to the Company.
(xiii) According to the information and explanations given to us and based on ourexaminations of the records of the Company The Company has not entered into anytransaction with the related parties. Therefore reporting under clause 3(xiii) of theorder is not applicable.
(xiv) According to the information and explanations given to us and based on ourexamination of the records the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us and based on ourexamination of the records the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3 (xv) of the Order is notapplicable to the Company.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable tothe Company.
Annexure B to the Independent Auditor's report on the standalone financialstatements of INDO-GLOBAL ENTERPRISES LIMITEDfor the year ended March 31 2019
Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under section 143(3)(i) of the Companies Act 2013 (Referred to inparagraph 2(f) under Report on Other Legal and Regulatory Requirements' section ofour report of even date) Opinion
We have audited the internal financial controls with reference to financial statementsof INDO- GLOBAL ENTERPRISES LIMITED ("the Company") as of March 31 2019in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.
In our opinion the Company has in all material respects an adequate internalfinancial control system with reference to financial statements and such internalfinancial controls were operating effectively as at March 31 2019 based on the internalfinancial controls with reference to financial statements criteria established by theCompany considering the essential components of internal controls stated in the GuidanceNote on Audit of Internal Financial Controls over Financial Reporting issued by theInstitute of Chartered Accountants of India (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 financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business includingadherence to Company's policiesthe safeguarding of itsassets the prevention and detection of frauds and errors the accuracyand completeness ofthe accounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013 (hereinafterreferred to as "the Act").
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the GuidanceNote and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 standalone financial statements whether due to fraud orerror.
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 financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect 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 withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
Inherent Limitations of Internal Financial Controls withreference to financialstatements
Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of theinternal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
| ||FOR SHARMA & PAGARIA |
| ||Chartered Accountants |
| ||FirmReg. No. 008217S |
|Date : 30thMay 2018 ||Bhavik Pandit |
|Place : Ahmedabad ||Partner |
| ||Membership No: 043141 |