Integrated Thermoplastics Ltd.
|BSE: 530921||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE038N01015|
|BSE 00:00 | 09 Dec||Integrated Thermoplastics Ltd|
|NSE 05:30 | 01 Jan||Integrated Thermoplastics Ltd|
|BSE: 530921||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE038N01015|
|BSE 00:00 | 09 Dec||Integrated Thermoplastics Ltd|
|NSE 05:30 | 01 Jan||Integrated Thermoplastics Ltd|
M/s. INTEGRATED THERMOPLASTICS LIMITED.
Report on the indian Accounting Standards (IND AS) Financial Statements:
We have audited the accompanying IND AS financial statements of M/s.INTEGRATEDTHERMOPLASTICS LIMITED ("the Company") which comprise the Balance Sheet asat March 31 2019 the Statement of Profit and Loss and Cash Flows for the year then endedand a summary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and accounting to the explanationsgiven to us the aforesaid IND AS Financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India. a) In the case of the Balance sheet ofthe state of affairs of the Company as at March 312019; b) In the case of the Profit andLoss statement of the Loss for the year ended on that date; c) In the case of the cashflow statement of the cash flow for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the standards on auditing specified undersection 143 (10) of the Companies Act 2013. Our responsibilities under those Standardsare further described in the auditor's responsibilities for the audit of the IND ASFinancial 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 independence requirements that are relevant to our audit of theIND AS Financial statements under the provisions of the Act and the rules there under andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the code of ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion on the IND AS Financial statements.
Key Audit Matters
Key audit matters (KAM') are those matters that in our professional judgmentwere of most significance in our audit of the consolidated financial statements of thecurrent period. These matters were addressed in the context of our audit of theconsolidated financial statements as a whole and in forming our opinion thereon and wedo not provide a separate opinion on these matters.
Management's Responsibility for the Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese IND AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (IndAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application 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 standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our objectives are to obtain reasonable assurance about whether the IND AS 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 IND AS Financial statements. As part of an audit in accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of the IND AS 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting 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 IND AS 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 cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the IND AS Financialstatements including the disclosures and whether the IND AS Financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the IND AS Financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
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 IND AS Financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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.
Emphasis of Matters:
We draw attention to the following matters in the notes to the Ind AS financialstatements:
The financial statements which indicates that the company has accumulated losses ofRs.203777691/and its net worth has been substantially eroded the company has incurreda net loss of Rs.128304597/- during the current year and in the previous yearRs.15789870/-
Notes to accounts to the financial statements which shows Letter of Credit of Rs.650Lakhs which is a threat to the company as it results for the payment if default is made
Notes to accounts to the financial statements which describe accounting for retirementbenefits and the Provisions required as on 31/03/2019 is not ascertained.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit 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 including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors of theCompany as on March 31 2019 taken on record by the Board of Directors none of thedirectors are disqualified as on March 31 2019 from being appointed as a director interms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A".
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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements.
ii. The Company did not have any long-term Contracts including derivative contracts forwhich there were any material foreseeable losses. iii. There has been no amount totransfer or delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Integrated Thermoplastics Limited ofeven date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of M/sINTEGRATED THERMOPLASTICS LIMITED ("the Company") as of March 31 2019 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on that date
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. 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 over financial reporting was established and maintained and if suchcontrols 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 operative 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 Ind AS 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 of records that in reasonable detail accurately andfairly reflect 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 Ind ASfinancial 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 controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
According to the information and explanation given to us and based on our audit thefollowing material weaknesses have been identified as at March 31st 2019
a) As there are deficiencies in internal controls such that the management oremployees of the company in the normal course of performing their assigned functionsdoes not prevent or detect and correct misstatements on a timely basis.
b) A lack of adequate procedures and controls to appropriately account for certainnon-income tax-related expenses and comply with the related filing requirements.
c) The company does not have an appropriate written internal control system forcustomer/supplier acceptance credit evaluation and establishing credit limits forsales/purchases which could potentially results in the company recognizing revenuewithout establishing reasonable certainty of ultimate collection.
d) The company does not have adequate written controls for the personnel recruitmenttraining and other related activities.
e) Most of the transactions are being personally supervised by the management itselfwithout proper job rotations and its related procedures.
a) The company is not issuing the receipts for the amount received through bank.
b) There is no proper maker and checker relationship as the transactions are beingprocessed and authorized by the same person.
In our opinion except for the effects/possible effects of the material weaknessesdescribed above on the achievement of the objectives of the control criteria the companyhas maintained in all material respects adequate internal financial controls overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as of March 31st 2019 based on "the Internal Control overfinancial reporting criteria established by the company considering the essentialcomponents of the internal control stated in the Guidance Note on audit on InternalFinancial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India".
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Integrated Thermoplastics Limited ofeven date)
Report as required by the company's (Auditor's Report ) Order2016 issued by theCentral Government of India in term of Sub Section (11) of section 143 of the CompaniesAct2013.
i. In respect of the Company's Fixed Assets :
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a program of verification to cover all the items of fixed assets ina phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deed relating to the immovable property of land situated at Survey no.375Monoharabad Village Toopran Mandal Medak District Telangana is the name of the Companyas at the balance sheet date. But the above mentioned land is in Dispute pending beforethe Court of the Honorable Senior Civil Judge at Siddipet and the Executive Petition isfiled by the decree holder E.P.No.04 of 2016 by Mr.Surender Singh.
ii. In respect of the Company's Inventories :
The Physical verification of Inventory has been conducted at reasonable intervals bythe management during the year and no material discrepancies were noticed on physicalverification and the small discrepancies if any have been properly dealt within thebooks of accounts.
iii. According to the information and explanations given to us the Company has grantedunsecured loans to the companies covered in the register maintained under section 189 ofthe Companies Act 2013 ("the Act") accordingly the clause iii (a)iii (b) andiii(c) are not applicable
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013in respect of grant of loans making investments and providing guarantees and securitiesas applicable.
v. The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2019 and therefore the provisions of the clause 3 (v)of the Order are not applicable to the Company.
vi. The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Companies Act 2013 for the manufacturing activities carriedout by the Company. Thus reporting under clause 3(vi) of the order is not applicable tothe Company.
i. According to the information and explanations given to us in respect of statutorydues:
(a) The Company has not regular in depositing undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Sales Tax Service Tax
(b) Goods and Service Tax Value Added Tax Customs Duty Excise Duty Cess and othermaterial statutory dues applicable to it with the appropriate authorities.
(c) There are undisputed amounts payable in respect of Income Taxes and ProfessionalTax in arrears as at March 31 2019 for a period of more than six months from the datethey became payable and the details are given under:
Statement of arrears of Statutory Dues Outstanding for more than Six Months
(d) Details of dues of Income Tax Sales Tax Service Tax Excise Duty and Value AddedTax which have not been deposited as at March 31 2019 on account of dispute are givenbelow:
# Total disputed Tax of Rs.103.81 Lakhs for which provision has not been made in thebooks.
ii. In our report and according to the conformation and explanations given to us thecompany has became default in repayment of dues to APSFC Term Loan Principle Amount ofRs.63001737 and Interest on Term Loan of Rs.131225994/-Total Amounting toRs.194227731/- as at 31st March 2019. The Company has also taken loan from M/s. ToyotoFinancial Services India Ltd and regular in payment. During the year the company has notissued any debentures.
iii. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause 3 (ix)of the Order is not applicable to the Company.
i. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company or no material fraud on the Company by its officers oremployees has been noticed or reported during the year.
ii. In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
iii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of theOrder is not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements (under Note-27(Part-C)) asrequired by the applicable accounting standards.
v. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder clause 3 (xiv) of the Order is not applicable to the Company.
vi. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company.
vii. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.