To the Members of
Innovators Faade Systems Limited
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of Innovators Facade SystemsLimited (the Company) which comprise the balance sheet as at 31st March 2019the statement of Profit and Loss statement of cash flows and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.
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 in conformity with theaccounting principles generally accepted in India of the state of of the Company as atMarch 31 2019 its profit 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 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.
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 as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report :
1. Accuracy of estimated cost in respect of fixed price contract te estima costis critical to determine revenues for ongoing projects. This estimate has a high inherentuncertainty as it requires consideration of progress of the contract cost incurred tilldate and cost required to complete the remaining contract performance obligations.
Refer note No. 1(C)(ii) under the head Use of Estimates in significantaccounting policies.
Auditor's Response Principal Audit Procedures
Our audit approach was a combination of test of internal controls and substantiveprocedures which included the following:
Evaluated the design of internal controls relating to recording of costs incurred andestimation of cost required to complete the contract.
Basic rate contract (BRC) is prepared by Project Management team having details ofinstallation budgeted cost for material execution and etc.
Selected a sample of contract and through inspection of evidence of performance ofthese controls tested the operating effectiveness of the internal controls relating tocost incurred and estimated.
Performed analytical procedures and test of details for reasonableness of incurred andestimated cost.
Informationother 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 management discussion and analysisof Board's Report but does not include the Consolidated Financial Statement StandaloneFinancial 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 with our audit of the Standalone Financial Statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the Standalone Financial Statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 position financialperformance cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the accounting Standards specified under section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection and ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the Financial Statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
1. 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.
2. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the 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 the override of internal control.
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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls. Evaluate the appropriateness of accounting policies usedand the reasonableness of accounting 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 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 statements or if such disclosures are inadequate to modify our opinion.
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 cease tocontinue as a going concern.
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.
3. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
4. 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.
5. From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 (Auditor's Report) Order 2016 (the Order)issued by the Central Government of India in terms of sub- (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.
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 by law have been kept by theCompany so far as it appears from our examination of those books.
(c) 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 account.
(d) 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.
(e) On the basis of the written representations 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 2019 from being appointed as a director in terms of Section164 (2) of the Act. (f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure B.
(g) 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. TheCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statements Refer Note 31 to the Financial Statements; ii. The Company did nothave any long-term contracts including derivative contracts for which there were anymaterial foreseeable losses. iii. There were no amounts which were required to betransferred to the Investor and Protection Fund by the Company.
3. With respect to the matter to be included in the Auditor's 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 197 of the Act. The Ministry of CorporateAffairs has not prescribed other details under Section 197(16) which are required to becommented upon by us.
For S G C O & Co. LLP
K. M. Tulsian
Mem. No. 038430
Date: 28th May 2019
Annexure A to the Independent Auditor's Report
The Annexure referred to in Paragraph 1 under the heading Report on Other Legaland Regulatory Requirements" in our Independent Auditor's Report to the members ofthe Company for the year ended 31st March 2019.
As required by the Companies (Auditors Report) Order 2016 and according to theinformation and explanations given to us during the course of the audit and on the basisof such checks of the books and records as were considered appropriate we report that:
(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.
b) The fixed assets have been physically verified by the management in accordance witha phased programme of verification which in our opinion is reasonable considering thesize and the nature of its assets. Pursuant to the program certain fixed assets have beenverified during the year. The frequency of verification is reasonable and no materialdiscrepancies have been noticed on such physical verification.
c) According to the information and explanations given to us and on the basis of ourexamination of records of the Company the title deeds of immovable properties are held inthe name of the Company.
(ii) The inventories have been physically verified by the management during the year atreasonable intervals. The procedures of physical verification of the inventories followedby the management are reasonable and adequate in relation to the size of the Company andthe nature of its business. No material discrepancies were noticed on physicalverification as compared to book records which have been properly dealt with in the booksof account.
(iii) During the year the Company has not granted any loans to the parties covered inthe register maintained under Section 189 of the Act. Hence paragraph 3(iii)(a) (b) and(c) of the said Order are not applicable to the Company.
(iv) a) In our opinion and according to the information and explanation given to ussince the Company has not granted any loan the provisions of Section 185 of the CompaniesAct 2013 are not applicable.
b) With regards to investments in Securities made by the company the company hascomplied with the provisions of Section 186 of the Companies Act 2013. Further thecompany has not granted any loan or given any guarantee or provided any security to anyother body corporate under Section 186 of the Act.
(v) The Company has not accepted any deposits from the public.
(vi) The Central Government has prescribed the maintenance of cost record under Section148(1) of the Act. We have not reviewed the cost records maintained by the Company butbased on the information submitted by the Company we are of the view that such accountsand records have been made and duly maintained.
(vii) a) According to the records of the Company the undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Service TaxGoods and Services Tax Duty of Customs Duty of Excise Value Added Tax Cess and otherstatutory dues wherever applicable have regularly been deposited except in few cases ofTDS where slight delay in deposit with appropriate authorities. According to theinformation and explanations given to us there are no undisputed amounts payable whichhave remained outstanding as at 31st March 2019 for a period more than six months fromthe date they became payable.
b) According to the records of the Company Income Tax Sales Tax Service Tax Goodsand Services Tax Duty of Customs Duty of Excise and Value Added Tax which have not beendeposited on account of any dispute with the relevant authorities are given below:
|Name of Statute ||Period to which amount relates ||Amount in Rs. ||Forum where dispute is pending |
|CST/Value ||FY 2007-08 ||944301 ||Sales Tax (Appeals) |
|Added Tax ||FY 2007-08 ||45330167 || |
| ||FY 2010-11 ||25926656 || |
|Income Tax ||AY 2009-10 to 2011-12 ||746666 ||CIT (Appeals) |
(viii) As per the information and explanations given by the management the Company hasnot defaulted in repayment of its dues to banks and financial institutions and has notissued debentures.
(ix) During the year the Company has raised money by the way of Initial Public In ouropinion and according to the information and explanations given to us the Company hasutilised the money for the purposes for which they were raised. Further the company didnot raise money by way of term loans during the year.
(x) According to the information & explanations given to us no fraud by thecompany or on the company by its officers or employees has been noticed or reported duringthe course of our audit.
(xi) According to the information and explanations given to us and based on ourexaminations 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. information
(xii) In our opinion and according to the and explanations given to us the Company isnot a Nidhi Company. Accordingly paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanation given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with provisions of section 177 and 188 of the Act where applicable. Thedetails of such related party transactions have been disclosed in the financial statementsas required under Accounting Standard (AS) 18 Related Party Disclosures specified undersection 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules2014.
(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.
(xv) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with the directors or persons connected with him. Accordingly paragraph 3(xv) of the Order is not applicable.
(xvi) In our opinion and according to the information and explanation given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.
For S G C O & Co. LLP
Firm's Registration No. 112081W/W100184
K. M. Tulsian
Mem. No. 038430
Date: 28th May 2019
Annexure B to the Independent Auditor's Report of even date on theStandalone financial statements of Innovators Facade Systems Limited for the year ended31st March 2019.
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 InnovatorsFacade Systems Limited (the Company) as of March 31 2019 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 company's policies the safeguarding of its assets theprevention 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 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 controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively 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 judgement including the assessment of the risks ofmaterial 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 ReportingA company's internal financial control over financial reporting is a process designed toprovide 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regarding ortimely detection of unauthorised acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.
Financial Controls Over Financial Reporting In herent Limitations of Internal
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 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 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 March 31 2019 based on theinternal control over financial reporting criteria established essential by the Companyconsidering the components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
For S G C O & Co. LLP
Firm's Reg. No. 112081W/W100184
K. M. Tulsian
Mem. No. 038430
Date: 28th May2019