To the Members of
Indra Industries Ltd.
We have audited the accompanying financial statements of Indra Industries Ltd. ('thecompany') comprising of Balance Sheet as at 31st March 2019 and the Statementof Profit & Loss of the company and Cash Flow Statement for the period ended on thatdate and a summary of significant accounting 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 financial statements give the information requiredby the Act in the manner so required and give a true and fair view inconformity with theaccounting principles generally accepted in India:
a) In the case of the Balance Sheet of the state of affairs of the Company as at March31 2019;
b) In the case of the Statement of Profit and Loss (Including other comprehensiveIncome) of the Loss for the period ended on that date;
c) In case of the Statement of changes in Equity for the period ended on that date and
d) In the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.
Basis of opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) issued byICAI. Our responsibilities under those standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the company in accordance with the code of ethics issued by the Instituteof Chartered Accountants of India together with ethical requirements that are relevant toour audit of the financial statements in (jurisdiction) 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 qualified opinion.
Key Audit Matters
Impact of government policies/ notifications on recognition of subsidy accruals/claimsand their recoverability
(Refer to the accompanying note 10 forming integral part of the Standalone FinancialStatements) During the year the Company has recognised accruals/subsidy claims amountingto Rs.1.38 crores and as at March 31 2019 the Company has receivables of Rs. 2.03 croresrelating to such claims which is significant to the financial statements. We focused onthis area because recognition of accruals/claims and assessment of recoverability of theclaims is subject to significant judgement of the management. The area of judgementincludes certainty around the satisfaction of conditions specified in thenotifications/policies collections provisions thereof likelihood of variation in therelated computation rates and basis for determination of accruals/ claims.
We understood and tested the design and operating effectiveness of controls asestablished by management in recognition and assessment of the recoverability of theclaims. We evaluated the management's assessment regarding reasonable certainty forcomplying with the relevant conditions as specified in the notifications/policies andcollections. We considered the relevant notifications/policies issued by variousauthorities to ascertain the appropriateness of the recognition of accruals/claimsadjustments to claims already recognised pursuant to changes in the rates and basis fordetermination of claims. We tested the ageing analysis and assessed the information usedby the management to determine the recoverability of the claims by considering claimcollection against historical trends the level of credit loss charged over time andprovisions made. Based on the above procedures performed the management's estimatesrelated to recognition of subsidy accruals/claim and there recoverability are consideredto be reasonable.
Management's Responsibility for the Financial Statements
Management is responsible for the matters stated in section 134(5) of the Companies Act2013 with respect to preparation and presentation of these standalone financialstatements that give a true and fair view of the financial position financial performanceand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards specified under Section 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the company for preventing and detectingfraud 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 statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concern disclosingas applicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Board of Directors are also responsible for overseeing the Company's financialreporting process.
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 judgement andmaintain professional scepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or override of internal control.
- 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 theAct 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 reasonableness ofaccounting estimates and related disclosures made by management.
- 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 theCompany"s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated 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.
- Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent 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 deficiencies 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 aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably 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")issued by the Central Govt of India in terms of sub-section (11) of the section 143 ofthe Act we give in the "Annexure A" a statement on the mattersspecified in the paragraph 3 & 4 of the Order.
2. As required by Section 143(3) of the Companies Act 2013 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 the law have been kept by theCompany so far as appears from our examination of those books.
(c) The Balance Sheet Statement of Profit and Loss and Cash Flow statement dealt withby this report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statements comply withAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of the written representation received from the Directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director interms of Section 164(2) of the Act.
(f) In respect to opinion on 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".
(g) With respect to the Other Matters to be included in the Auditor's Report inaccordance with the Rule 11 of the Companies (Audit and Auditors) Rules 2014. In ouropinion and to the best of our knowledge and according to the information and explanationsgiven to us:
i) The company has disclosed the impact of pending litigations on its financialposition in its 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 were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the company.
For Mahesh C. Solanki & Co.
ICAI Firm Reg. No. - 006228C
CA. Mahesh C Solanki
M. No. - 074991
Date : 30th May 2019
ANNEXURE-A TO THE AUDITORS REPORT
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 Act notified by the Ministry of Corporate Affairs on 29th March 2016 we give astatement on the matters specified on the paragraphs 3 and 4 of the order. We report onthe following points in continuation to our Independent Auditor's Report -
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) A major portion of the assets has been physically verified by the management inaccordance with the phased programme of verification adopted by the company. In ouropinion the frequency of verification is reasonable. To the best of our knowledge nomaterial discrepancies have been noticed on such verification.
c) The title deeds of immovable property are held in the name of the company.
a) The inventory has been physically verified by the management during the year atreasonable intervals. In our opinion the frequency of verification is reasonable.
b) The procedure followed by the management for physical verification of stocks isreasonable and adequate in relation to the size of the company and nature of its business.
c) On the basis of our examination of stock records we are of the opinion that nomaterial discrepancies were noticed on physical verification.
3) The Company has not granted loans secured or unsecured to Companies Firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013 ('the Act').Accordingly clause 3(iii)(a) and (b) of theorder are not applicable to the Company.
4) The Company has not granted any loans made investments given guarantees andsecurity under section 185 and 186 of the Act. Thus paragraph 3(iv) of the order is notapplicable to the company.
5) The Company has not accepted deposits during the year within the meaning of theprovisions of section 73 to 76 or any other relevant provisions of the Companies Act andthe rules framed there under.
6) To the best of our knowledge and as explained the Central Government has prescribedmaintenance of cost records under section 148(1) of the Act for any of the servicesrendered by the Company.
7) a) According to the records of the company the company is not generallyregular in depositingwith appropriate authorities undisputed statutory dues includingprovident fund employees' state insurance income tax sales tax service tax customduty GST cess and other statutory dues applicable to it. The over dues for more than 6months as on 31.03.2019 are as under:
|Particulars ||Amount( In RS.) |
|VAT ||1711563 |
|Entry Tax ||11547 |
|TDS ||89610 |
|Professional Tax ||114915 |
b) According to the records of the company there are no amountsto be deposited the onaccount of any dispute.
8) During the financial year the company has defaulted in repayment of dues tofinancial institution or bank as mentioned below. The company has not issued anydebentures.
|Particulars ||Principal ||Interest |
|MPFC Term Loan 66/5087 ||20524165 ||1059277 |
|MPFC Term Loan 66/5200 ||8372725 ||2699864 |
|MPFC Term Loan 66/6482 ||4327120 ||1969952 |
|MPFC Term Loan 66/5138 ||12999519 ||2761232 |
|Working Capital Loans ||119173545 |
9) The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3 (ix) of the Order is not applicable.
10) 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 course of our audit.
11) According to information and explanation given to us the company has paidorprovided the managerial remuneration in accordance with the requisite approvals mandatedby the provisions of section 197 of the Companies Act 2013.
12) 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.
13) 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 Ind AS financial statements as required by theapplicable accounting standards.
14) 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.
15) 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 non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
16) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For Mahesh C. Solanki & Co.
Firm Reg. No. - 006228C
CA. Mahesh C. Solanki
ANNEXURE B TO THE AUDITOR'S 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 IndraIndustries Limited ('the Company') as of 31st March2019 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act2013.
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 deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable to anaudit of Internal Financial Controls and both issued by the ICAI. 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 were 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 the material weakness exists and testing and evaluating thedesign and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether 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 systemover financial reporting.
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's internal financial control 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 statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations of theManagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany'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 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 financial controls over financialreporting to future periods are subject to the risk that the internal financial controlor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For Mahesh C. Solanki & Co.
Firm Reg. No. - 006228C
CA. Mahesh C Solanki
Date 30 May 2019