TO THE MEMBERS OF IRCON INTERNATIONAL LIMITED
Report on the Audit of the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statementsof IRCON INTERNATIONAL LIMITED (the company") which comprise the Balance Sheetas at 31st March 2022 the statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year ended on that date and a summary of the significant accounting policies andother explanatory information in which are incorporated the Returns for the year ended onthat date audited by branch auditors of the Company's branches at Algeria Bangladeshand Sri Lanka Region.
We have audited the financial statements of the three (3) foreignbranches situated at South Africa Malaysia and Sri Lanka (Indian part) for the year ended31st March 2022. However we have not visited any foreign branch and therelevant information for the audit purpose was provided to us by the management atcorporate level.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 1 33 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 312022the profit and total comprehensive income changes in equity and its cash flows for theyear ended on that date.
This report has been revised consequent upon observations ofComptroller of Auditor General of India during the course of audit u/s 139(5) of theCompanies Act 2013 as amended for the year ended on 31st March 2022 and thisreport supersedes our earlier report dated 27 May 2022 under section 143 of the CompaniesAct 2013.
Basis for Opinion
We conducted our audit of the Standalone Ind AS financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theCompanies Act 201 3. Our responsibilities under those Standards are further described inthe Auditor's Responsibilities for the Audit of the Ind AS Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theindependence requirements that are relevant to our audit of the financial statements underthe provisions of the Companies Act2013 and the Rules made there under and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence obtained by us and otherauditors in terms of their reports referred to it "Other Matter" paragraphbelow is sufficient and appropriate to provide a basis for our audit opinion on theStandalone Ind AS financial Statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Ind AS Financial Statements ofthe current period. These matters were addressed in the context of our audit of theStandalone Ind AS Financial Statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report.
|Key Audit Matter ||How our audit addressed the matter |
|Revenue Recognition in terms of Ind AS 115 "Revenue from Contracts with Customers" ||Our audit procedures included considering the appropriateness of the Company's revenue recognition accounting policies and assessing compliance with the policies in terms of the applicable accounting standards. |
|Accounting Standard on Revenue which prescribes five steps revenue recognition model. ||Evaluated the effectiveness of control over the preparation of information that are design to ensure the completeness and accuracy Selected a sample of contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and satisfaction of performance obligations. |
|The Company recognizes revenue for a performance obligation satisfied over time after estimating its progress towards complete satisfaction of the performance obligation. ||We also examined costs included |
|The recognition of revenue requires assessments and judgments to be made on changes in work scope claims (compensation rebates etc.) and other payments to the extent performance obligation is satisfied. ||within WIP balances on a sample basis and tested their recoverability through comparing the net realizable values as per the agreements with estimated cost to complete. |
|The company measures the performance obligation by applying input method. In the contracts where performance obligation cannot be measured by input method the output method is applied which faithfully depict the Company's performance towards complete satisfaction of the performance obligation. ||We performed following substantive procedures over revenue recognition with specific focus on whether there is single performance obligation or multiple performance obligations in the contract and whether the performance obligation is being satisfied over the period of time or at a point in time: |
|During order fulfillment contractual obligations may need to be reassessed. In addition change orders or cancelations have to be considered. As a result total estimated project costs may exceed total contract revenues and therefore require immediate recognition of the expected loss. Ind AS 115 requires entities to exercise judgement taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. || Read analyzed and identified the distinct performance obligations in these contracts. |
|The Further Explanation why we consider this as a Key Audit Matter is as follows: || Compared these performance obligations with that identified and recorded by the Company. |
|The application of the revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized at a point in time or over time. Additionally revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. || Considered the terms of the contracts to verify the transaction price used to allocate to separate performance obligations. |
|For details refer Note 39 to the Standalone Ind AS Financial Statements. || Checked whether the performance obligation is being satisfied over the period of time or at a point in time. |
| || Performed analytical procedures for reasonableness of revenues disclosed |
|Contingent Liabilities || |
|Contingent Liabilities There are a number of litigations pending before various forums against the Company and the management's judgement is required for estimating the amount to be disclosed as contingent liability. ||We have obtained an understanding of the Company's procedure in respect of estimation and disclosure of contingent liabilities and adopted the following audit procedure: |
|We identified this as a key audit matter because the estimates on which these amounts are based involve a significant degree of management judgement in interpreting the cases. (Refer Note No. 37 of the Standalone Financial Statements read with the Accounting Policy No. 2.2.16). || Reviewing the current status and material developments of legal matters. |
|System Environment and internal Controls || Examining recent orders from competent authorities and / or communication received from various authorities judicial forums and follow-up action thereon. |
|The Company is having SAP system in place and only FI- CO module is Implemented and other system like payroll inventory etc. is under the process of implementation Further the SAP project system module (PS) is required to generate the projects invoices with integration support. The IT system in the company are not fully automated and manual interventions are in place in preparing and reporting of financial statements. || Review and analysis of evaluation of the contentions of the company through discussions collection of details of the subject matter under consideration the likely outcome and consequent potential outflows on those issues. |
|The Further Explanation why we consider this as a Key Audit Matter is as follows: ||Our procedures included but were not limited to: |
|Our audit planning & procedures also includes the various reports which the system generates and without which it is difficult for us to collect the data of the various heads of the Balance sheet. || Discussing with management and IT department on the IT environment and consideration of the key financial processes to understand where IT systems were integral to the financial reporting process. |
| || Testing the design of the key IT controls relating to financial reporting systems of the company. |
| || We also tested the company's controls around system interfaces and the transfer of data from one system to another. |
| || We applied substantive audit procedures to ensure that areas where there are manual controls are operating effectively. |
Information Other than the Standalone Ind AS Financial Statements andAuditor's Report thereon
The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Company's annual report but does not include the Standalone Ind Asfinancial statements and our auditor's report thereon.
Our opinion on the Standalone Ind AS financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.
In connection with our audit of the Standalone Ind AS financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance forthe Standalone Ind AS Financial Statements
The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation and presentation of these standalone Ind AS financial statements that givea true and fair view of the financial position financial performance changes in equityand cash flows of the company in accordance with the accounting principles generallyaccepted in India including the Indian accounting Standards (Ind AS) specified undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015as amended from time to time.
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 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 financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable 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.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind ASFinancial Statements
Our objectives are to obtain reasonable assurance about whether thefinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion.The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to
draw attention in our auditor's report to the related disclosuresin the 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 ceaseto continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the Standalone Ind ASfinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the Standalone IndAS financial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
We did not audit the financial statements / financialinformation of three (3) foreign branches included in the standalone Ind AS financialstatement of the company whose financial statements/financial information reflect totalassets of '577.97 Crores (Previous year '411.85 Crores) as at 31st March 2022total revenue of '444.69 Crores (Previous Year '518.97 crores) and total PBT of '41.79crores (previous year '36.64 crores) for the year ended on that date as considered inthe standalone Ind AS financial statements. The financial statements/ information of thesebranches have been audited by the branch auditors whose reports have been furnished to usand our opinion in so far as it relates to the amounts and disclosure included in respectof these branches is based solely on the reports of such branch auditors.
The financial statements include ('0.08 Crores) (Previous Year'17.99 Crores) profit / (loss) net the company's share in three integrated jointoperations (unincorporated) accounts which have been certified by other firms of charteredAccountants and '0.59 Crores (Previous Year '0.51) profit net the company's share in1 joint operation account certified by the management.
Our opinion is not modified in respect of these matters
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the "Annexure A" a statement on thematters specified 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b. In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books and properreturns adequate for
the purpose of our Audit has been received from branches not visited byus.
c. The reports on the accounts of branch offices of the Company auditedunder section 1 43(8) of the Act by branch auditors have been sent to us and have beenproperly dealt with by us in preparing this report.
d. The Balance Sheet the Statement of Profit and Loss (including othercomprehensive income) and the Cash Flow Statement and the Statement of Change in Equitydealt with by this Report are in agreement with the books of account.
e. In our opinion the aforesaid standalone Ind AS financial statementscomply with the Indian Accounting Standards (Ind AS) specified under Section 133 of theAct read with The Companies (Indian Accounting standards) Rules 2015.
f. Being a government company provision of section 164(2) of the Actare not applicable pursuant to the notification No. G.S.R.463(E) dated 5 June 2015 issuedby the Central Government of India.
g. With respect to the adequacy of the internal financial controls overfinancial reporting of the company and the operating effectiveness of such controls referto our separate Report in
h. Being a government company provision of section 197 of the Act arenot applicable vide notification no. GSR 463 (E) dated 5th June 201 5 issued by theCentral Government of India.
i. With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 201 4 as amended in our opinion and to the best of our information and accordingto the explanations given to us:
(i) . The company has disclosed the impact of pending litigations onits financial position in its financial statements - refer Note 37 to the standalone IndAS financial statements.
(ii) . The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts -Refer Note No. 19.2 to the standalone Ind AS financial statements. The Companydid not have any derivative contracts for which there were any material foreseeablelosses.
(iii) . There were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company.
(iv) . a) The Management has represented that to the best of itsknowledge and belief as disclosed in note no 46 to the accounts no funds have beenadvanced or loaned or invested (either from borrowed funds or share premium or any othersources or kind of funds) by the Company to or in any other person or entity includingforeign entity ("Intermediaries") with the understanding whether recorded inwriting or otherwise that the Intermediary shall directly or indirectly lend or investin other persons or entities identified in any manner whatsoever ("UltimateBeneficiaries") by or on behalf of the Company or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries.
b) The Management has represented that to the best of its knowledgeand belief as disclosed in note no 46 to the accounts no funds have been received by theCompany from any person or entity including foreign entity ("Funding Parties")with the understanding whether recorded in writing or otherwise that the Company shalldirectly or indirectly lend or invest in other persons or entities identified in anymanner whatsoever ("Ultimate Beneficiaries") by or on behalf of the FundingParty or provide any guarantee security or the like on behalf of the UltimateBeneficiaries.
c) Based on the audit procedures performed that have been consideredreasonable and appropriate in the circumstances nothing has come to our notice that hascaused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and (b) above contain any material misstatement.
(v). As stated in note no 2.2.15 to the standalone Ind AS financialstatements
a) The final dividend proposed in the previous year declared and paidby the company during the year is in accordance with section 123 of the Companies Act 2013to the extent it applies to payment of divided.
b) The interim dividend declared and paid by the company during theyear and until the date of this report is in accordance with section 123 of the Act.
c) The Board of Directors of the company have proposed final dividendfor the current year which is subject to the approval of the members at the ensuing AnnualGeneral Meeting. The dividend declared is in accordance with section 1 23 of the Act tothe extent it applies to declaration of dividend.
3. As required by Section 143(5) of the Act and as per directionsissued by Comptroller and Auditor General of India we report that:
|S. No ||Directions ||Auditor's Replies |
|1. ||Whether the company has system in place to process all the accounting transactions through IT system? If yes the implications of processing of accounting transactions outside IT system on the Integrity of the accounts along with the financial implications if any may be stated. ||The Company is using SAP S/4 Hana system for all its projects located in India and also in its foreign branches. In case of foreign branches the company implemented S/4 Hana in place of Tally software from 30th September'2021. As per information and explanation provided to us no accounting transactions have been processed outside the IT system except income billing for which no financial implication were observed. |
|S. No ||Directions ||Auditor's Replies |
|2. ||Whether there is any restructuring of an existing loan or cases of waiver/write off of debts/loans/ interest etc. made by a lender to the company due to the company's inability to repay the loan? If yes the financial impact may be stated. Whether such cases are properly accounted for? (In case lender is a Government company then this direction is also applicable for statutory auditor of lender company). ||No the Company does not have any case of restructuring of an existing loan or cases of waiver/write off of debts/loans/ interest etc. made by a lender to the company.However the Company has given a loan to one of its subsidiary Ircon PB Tollway Ltd. (IPBTL). On request of the subsidiary company the holding company has waived off interest for the current year. However the company has booked interest on the basis of fair valuation as per Ind AS amounting to '15.45 crore. |
|3. ||Whether funds (grants/subsidy etc.) received/ receivable for specific schemes from Central/State Government or its agencies were properly accounted for/utilized as per its term and conditions? List the cases of deviation ||According to the information and explanation given to us and as per examination of records no funds have been received/ receivable for any specific scheme from central/ state agencies during the financial year 2021-22. |
For HDSG & ASSOCIATES
Firm Registration No: 002871N
|Sd/- || |
|Harbir Singh Gulati || |
|(Partner) || |
|Membership No: 084072 ||Place: New Delhi |
|UDIN:22084072ANKUAK9117 ||Date: July 22 2022 |
"Annexure A" to the Independent Auditors' Report
(Referred to in paragraph 1 under Report on Other Legal andRegulatory Requirements' section of our report to the
Members of Ircon International Limited of even date)
To the best of our information and according to the explanationprovided to us by the Company and the books of accounts and records examined by us in thenormal course of audit we stated that:
(i). In respect of the company's Property Plant and
Equipment and Intangible Assets:
a) A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant and Equipment.
(B) The company has maintained proper records showing full particularsof intangible assets.
b) The Property Plant and Equipment and were physically verified bythe management during the year. There is a regular program of verification which in ouropinion is reasonable having regard to the size of the Company and nature of itsbusiness. No material discrepancies were noticed on such verifications.
c) According to the information and explanations given to us and on thebasis of our examination of records of the company we report that the title/ lease deedsof all immovable properties (other than properties where the company is the lessee and thelease agreements are duly executed in favor of the lessee) disclosed in the financialstatement included under Property plant and equipment are held in the name of the Companyas at the balance sheet date. However in some cases where the company is the lessee andthe lease agreements are not executed in favor of the company.as disclosed in additionaldisclosure of "Note no 07" Right-of- use Assets.
d) The Company has not revalued its property plant and equipment(including right of use assets) or intangible assets or both during the year.
e) No proceedings have been initiated or pending against the Companyfor holding any benami property under the Benami Transactions (Prohibition) Act 1988 (45of 1988) and rules made thereunder.
(ii) . a) The inventory (excluding stocks lying with third parties) hasbeen physically verified by the management at reasonable intervals during the year. Inrespect of inventory lying with third parties these have substantially been confirmed bythem. In our opinion the coverage and procedure of such verification is appropriate. Nodiscrepancies of 10% or more in the aggregate for each class of inventory were noticed oncomparison of physical verification with book records.
b) The Company has not been sanctioned working capital limits in excessof '5 crore in aggregate at any points of time during the year from banks or financialinstitutions on the basis of security of current assets and hence reporting under clause3(ii)(b) of the Order is not applicable.
(iii) . According to the information and explanation given
to us and on the basis of our examination of the records the Companyhas not made any investment in or provided securities to companies firms limitedliability partnerships or any other parties during the year.
The companies have provided guarantee granted loans and advances innature of loans during the year to companies and others parties details of which arestated below. The company has not provided guarantees or granted loans or advances in thenatures of loans during the years to firms limited liability partnerships.
a) (A) Based on the audit procures carried out by us and as per theinformation and explanations given to us the company has granted loans to subsidiariesand joint ventures as below:
| || || ||(Rs in Crores) |
|Guarantees ||Loans ||Advances in nature of loan |
|Aggregate || || || |
|amount granted / provided during the year ||Guarantees ||Loans ||Advances in nature of loan |
|-Subsidiaries* ||1534.80 ||46.78 ||142.81 |
|-Joint Ventures* ||- ||- ||15.60 |
|Balance || || || |
|Outstanding as at the balance sheet date || || || |
|-Subsidiaries* ||1365.70 ||313.90 ||269.84 |
|-Joint Ventures* ||- ||- ||65.60 |
*As per the companies Act
(B) Based on the audit procedure carried out by us and as per theinformation and explanations given to us the Company has granted advances in the naturesof loans to other parties as below:
| ||(Rs in Crores) |
| ||Advance in the nature of loans- Employee advances |
|Aggregate amount granted / provided during the year || |
|- Other Parties ||0.44 |
|Balance Outstanding as at the balance sheet date || |
|- Other Parties ||1.22 |
b) In our opinion the guarantees provided during the year and the termsand conditions of the grant of loans and advances in the nature of loans during the yearare prima facie not prejudicial to the interest of the Company.
c) According to the information and explanations given to us and on thebasis of our examination of the records of the Company In our opinion in the case ofloans and advances in the nature of loans given the repayment of principal and receipt ofinterest are generally regular as per stipulation except in case of one of its subsidiaryIrcon PB Tollway Ltd. (IPBTL) where company has waived off the interest for the period ofOctober 01 2019 till March 31 2024.
d) In respect of loan granted by the company there is no overdueamount remaining outstanding as at the balance sheet date.
e) No loan or advances in the nature of loans granted by the companywhich has fallen due during the year has been renewed or extended or fresh loans grantedto settle the over dues of existing loans given to same parties.
f) The Company has not granted any loans or advances in the nature ofloans either repayable on demand or without specifying any terms or period of repaymentduring the year. Hence reporting under clause 3(iii)(f) is not applicable.
(iv) . In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 1 85 and 1 86 of thecompanies Act in respect of loans investments guarantees and security.
(v) . The Company has not accepted any deposits within the provisionsof Section 73 to 76 or any other relevant provision of the Companies Act and rules madethere under
(vi) . The Company has maintained cost records as required undersection 148(1) of the Companies Act. However we are neither required to carry out norhave carried out any detailed examination of such accounts and records.
(vii) . a) The Company is generally regular in depositing undisputedstatutory dues including provident fund income tax goods and service tax sales taxduty of customs duty of excise value added tax cess and any other statutory duesapplicable with the appropriate authorities. Employees' State Insurance is notapplicable to the Company. According to the information and explanation given to us thereare no undisputed statutory dues which were outstanding as on 31.03.2022 for a period ofmore than six months from the date the same become payable except balances outstanding.
b) Details of Statutory dues referred to in sub-clause (a) above whichhave not been deposited as on 31.03.2022 on account of dispute are given below:
|S. No. ||Name of the Statue ||Nature of the Dues ||Amount in (Crores)* ||Period to which the amounts related ||Forum where dispute is pending |
|1 ||Sales Tax ||Sales Tax-AGRP ||0.93 ||2007-08 to 2012-13 ||The Additional Commissioner Commercial Taxes Ghaziabad |
|2 ||Sales Tax ||Entry Tax- AGRP ||0.02 ||2008-09 to 2013-14 ||The Additional Commissioner Commercial Taxes Ghaziabad |
|3 ||Sales Tax ||UP TRADE TAX - UP 01 ||3.89 ||2004-05 to 2007-08 ||The Assessing Authority |
|4 ||Sales Tax ||UPTT-UP-01(Entry Tax) ||0.16 ||2007-08 ||The Assessing Authority |
|5 ||Sales Tax ||UPVAT ACT-UP-01 ||3.41 ||2007-08 & 2008-09 ||The Appellate Authority |
|6 ||Sales Tax ||UPVAT ACT-UP-01 (Entry Tax) ||0.15 ||2007-08 to 2009-10 ||The Appellate Authority |
|7 ||Sales Tax ||UPVAT ACT-UP-01 ||0.01 ||2010-11 ||The Deputy Commissioner |
|8 ||Sales Tax ||Sales Tax-BE-08 ||0.26 ||2007-08 to 2009-10 ||The Additional Commissioner Appeal Noida |
|9 ||Sales Tax ||Sales Tax-BE-08 Entry Tax ||0.003 ||2014-15 ||The Additional Commissioner Appeal Noida |
|10 ||Sales Tax ||UPTT-UP-05 ||1.31 ||2006-07 to 2007-08 ||Tribunal Jhansi Bench |
|11 ||Sales Tax ||UPTT-UP-05 ||0.01 ||2005-06 ||High Court Allahabad |
|12 ||Sales Tax ||UPVAT-UP-05 ||3.27 ||2007-08 to 2009-10 ||Tribunal Jhansi Bench |
|13 ||Uttar Pradesh VAT Act 2008 ||UP VAT-UP-05 ||0.42 ||2011-12 ||Dy. Commissioner Appeal |
|14 ||Sales Tax ||Sales Tax 2005-06 Godhra ||1.90 ||2005-06 ||Dy. Commissioner Sales Tax Authority Vadodara |
|15 ||Sales Tax ||Sales Tax 2010-11- GED ||0.05 ||2010-11 ||Asst Commercial Tax Officer Margoa |
|16 ||Uttar Pradesh VAT Act 2008 ||Demand raised for sales tax ||0.08 ||1982-83 and 1989-90 ||Appellate Authority Jhansi |
|17 ||Sales Tax Rewari - Ajmer Project ||Works Contract Tax ||1.84 ||2006-07 to 2010-11 ||High Court Rajasthan |
|18 ||Sales Tax ||Sales Tax GED GOA ||0.50 ||2011-12 to 2014-15 ||Asst Commercial Tax Officer Margoa |
|19 ||Sales Tax ||Demand Raised ||1.19 ||2006-07 ||VAT Tribunal Chandigarh |
|20 ||Service Tax ||Service Tax Demand ||0.55 ||2015-16 to 2017-18 ||CESTAT Allahabad |
|21 ||Service Tax ||Service Tax Demand ||0.19 ||2015-16 ||Deputy/Assistant Commissioner Jaipur |
|22 ||Uttar Pradesh VAT Act2008 ||UP VAT (Regular)section 28(2) & (entry tax) ||0.21 ||2015-16 ||The assessment order has been received. Appeal would be preferred |
|23 ||Uttar Pradesh sales Tax Act 1948 ||UP sales tax - section 3 kha ||1.24 ||2005-06 & 2006-07 ||Appeal pending in Tribunal |
|24 ||Uttar Pradesh VAT Act 2008 ||UP VAT (Regular)section 28 (2) ||0.32 ||2015-16 to 2017-18 ||The assessment order has been received. Appeal would be filed. |
|25 ||Uttar Pradesh sales Tax Act 1948 ||UP Entry Tax - GB Nagar ||0.05 ||2002-03 & 2003-04 ||Allahabad High Court |
|26 ||Jammu & Kashmir GST Act 1962 ||Sales Tax ||19.33 ||1999-00 to 2005-06 ||J&K High Court Jammu and Deputy Commissioner Commercial Sales (appeal) Srinagar |
|27 ||Income Tax ||Assessment Demand by DCT ||8.04 ||AY 2016-17 ||Appeal filed before CIT(A) |
|28 ||Sales Tax - MRO ||Sales Tax - MRO ||3.51 ||1995-96 & 1996-97 ||Bombay High Court |
|29 ||Sales Tax- MRO ||Sales Tax - MRO ||3.97 ||2010-11 & 2011-12 ||Sales Tax Office Mumbai |
|30 ||Sales Tax ||Sales Tax Maharashtra ||42.53 ||2007-08 ||Sales Tax Office Mumbai |
|31 ||Bihar Sales Tax 1981 ||Sales Tax ||1.75 ||1987-88 and 1994-95 ||Bihar Sales Tax Tribunal Khalgaon |
|32 ||West Bengal State Sales Tax Act 1994 ||Sales Tax ||0.26 ||1998-99 ||Sr. Jt Commissioner (Appeals) Sales Tax West Bengal |
|33 ||West Bengal VAT Act 2003 ||VAT ||1.80 ||2004-05 2016-17 & 2017-18 ||Asst. Comm. Of Sales Tax College St. Charge Kolkata |
|34 ||Service Tax ||Service Tax (Behala) ||0.87 ||2015-16 to 2016-17 ||Joint/Additional Commissioner Kolkata |
|35 ||Service Tax ||Service Tax on Agency Fees ||12.91 ||2010-11 to 2014-15 ||CESTAT |
|36 ||Service Tax ||Service Tax on Agency Fees ||5.60 ||2009-10 to 2013-14 ||CESTAT |
|37 ||Service Tax ||Service Tax on Agency Fees ||2.06 ||2016-17 to 2017-18 ||CESTAT |
|38 ||Bihar VAT Act ||VAT TDS ||5.98 ||2005-06 and 2006-07 ||Bihar VAT Department We Circle Patna |
|39 ||Bihar VAT Act ||VAT ||0.003 ||2010-11 ||Bihar VAT Department West Circle Patna |
|40 ||Bihar VAT Act ||VAT ||29.20 ||2012-13 ||Bihar VAT Department West Circle Patna |
|41 ||Service Tax ||Service Tax Jagdalpur ||2.84 ||2016-17 to 2017-18 ||Appeal Filed before Commisioner of Central and Customs Appeal Chhatisgarh |
|42 ||Bihar VAT Act ||Bihar VAT ||33.46 ||2013-14 ||Writ Petition Filed before High Court |
|43 ||Bihar VAT Act ||Bihar VAT ||25.54 ||2014-15 ||Writ Petition Filed before High Court |
|44 ||Service Tax ||Service Tax ||2.16 ||2015-16 ||CESTAT Kolkata |
|45 ||Bihar VAT Act 2005 ||Regular assessment under section 31 ||0.92 ||2015-16 ||The assessment order has been received. Appeal would be preferred |
|46 ||Central Excise Act 1944 ||Levy of Excise Duty on Bracket/ Cantilever Assemblies ||0.66 ||1998-99 ||CESTAT (Dept. Appeal) |
|47 ||UP VAT Act ||Demand for Sales Tax ||0.98 ||2010-11 ||Addl. Commissioner Grade- 2 (Appeal) has remanded the matter on 01.03.19 for re assessment of the above case to DC/Sale Tax/RBL |
|48 ||UP VAT Act ||Demand for Sales Tax ||0.14 ||2011-12 ||Addl. Commissioner Grade- 2 (Appeal) has remanded the matter on 28.03.20 for re assessment of the above case to DC/Sale Tax/RBL |
|49 ||UP VAT Act ||Demand for Sales Tax ||38.41 ||2012-13 to 2016-17 ||Addl. Commissioner Grade- 2 (Appeal) Lucknow |
|50 ||UP VAT Act 2008 ||UP VAT (Regular)section 28(2) ||6.81 ||2017-18 ||Addl. Commissioner Grade- 2 (Appeal) Lucknow |
|51 ||Income Tax ||Income Tax Demand u/s 115QA ||56.73 ||2018-19 ||Appeal filed before CIT(A) |
|52 ||Income Tax ||Income Tax ||7.64 ||2018-19 ||Appeal filed before CIT(A) |
|53 ||Income Tax ||Assessment Demand by DCT ||8.04 ||AY 2019-20 ||Appeal filed before CIT(A) |
*As compiled by the management and relied upon by us.
(viii) .There were no transactions relating to previously unrecordedincome that have been surrendered or disclosed as income during the year in the taxassessments under the Income Tax Act 1961 (43 of 1961).
(ix) . a) The Company has not defaulted in the repayment of loans orother borrowings or in the payment of interest thereon to any lender.
b) The Company has not been declared willful defaulter by any bank orfinancial institution or other lender.
c) The Company has not taken any term loan during the year and thereare no outstanding term loans at the beginning of the year and hence reporting underclause 3(ix)(c) of the Order is not applicable.
d) On an overall examination of the financial statement of the Companywe report that no funds raised on short- term basis have been used for long term purposeof the company.
e) On an overall examination of the financial statement of the Companywe report that the Company has not taken any funds from any entity or person on account ofor to meet the obligations of its subsidiaries and joint ventures.
f) The Company has not raised any loans during the year and hencereporting on clause 3(ix)(f) of the Order is not applicable.
(x). a) The Company has not raised moneys by way of initial publicoffer or further public offer (including debt instruments) during the year and hencereporting under clause 3(x)(a) of the Order is not applicable.
b) During the year the Company has not made any preferential allotmentor private placement of shares or convertible debentures (fully or partly or optionally)and hence reporting under clause 3(x)(b) of the Order is not applicable.
(xi) . a) No fraud by the Company or any fraud on the Company has beennoticed or reported during the year.
b) No report under sub-section (12) of section 143 of the Companies Acthas been filed in Form ADT- 4 as prescribed under rule 1 3 of Companies (Audit andAuditors) Rules 2014 with the Central Government.
c) We have taken into consideration the whistle blower complaintsreceived by the Company during the year while determining the nature timing and extentof our audit procedures.
(xii) . The Company is not a Nidhi Company as specified in the NidhiRules 2014.Thus the requirements under para 3(xii) of the Order is not applicable to theCompany.
(xiii) . In our opinion and according to the information andexplanations given to us all transactions with related parties are in compliance withsection 177 and 188 of the Companies Act where applicable and the details have beendisclosed in the financial statements as required by the applicable accounting standards.
(xiv) . a) In our opinion the Company has an adequate internal auditsystem commensurate with the size and the nature of its business.
b) We have considered the internal audit reports of the company issuedtill date for the period under audit.
(xv) . According to the information and explanations given to us inour opinion during the year the Company has not entered into any non-cash transactionswith its directors or persons connected with its directors and hence provisions of section192 of the Companies Act 2013 are not applicable to the company.
(xvi) . a) The Company is not required to be registered under section45- IA of the Reserve Bank of India Act 1934. Hence clauses 3(xvi)(a) and 3(xvi)(b) ofthe Order is not applicable.
b) The Company is not a Core Investment Company (CIC) as defined in theregulations made by the Reserve Bank of India. hence clause 3(xvi)(c) of the Order is notapplicable.
c) According to the information and explanations provided to us duringthe course of audit the Group does not have any Core Investment Company (CIC).
(xvii) . The Company has not incurred cash losses in the current and inthe immediately preceding financial year.
(xviii) . There has been no resignation of the statutory auditorsduring the year. Hence clause 3(xviii) of the order is not applicable.
(xix) . On the basis of the financial ratios ageing and expected datesof realization of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors andManagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which causes us to believe that any materialuncertainty exists as on the date of the audit report indicating that Company is notcapable of meeting its liabilities existing at the date of balance sheet as and when theyfall due within a period of one year from the balance sheet date. We however state thatthis is not an assurance as to the future viability of the Company. We further state thatour reporting is based on the facts up to the date of the audit report and we neither giveany guarantee nor any assurance that all liabilities falling due within a period of oneyear from the balance sheet date will get discharged by the Company as and when they falldue.
(xx) . a) There are no unspent amount towards
Corporate Social Responsibility (CSR) on other than ongoing projectsrequiring a transfer to a Fund specified in schedule VII to the Companies Act incompliance with second proviso to sub section (5) of Section 135 of the said Act. Hencereporting under clause 3(xx) (a) of the Order is not applicable.
b) In respect of ongoing projects the Company has transferred unspentto a Special account within a period of 30 days from the end of the financial year incompliance with the provision of section 135(6) of the Act except in respect thefollowing:
(Rs in Crores)
|Financial Year ||Amount unspent on Corporate Social Responsibility activities "Ongoing Projects" ||Amount Transferred to Fund specified in Schedule VII within 6 months from the end of the Financial Year ||Amount Transferred after the due date (specify the date of deposit) |
|2021-22 ||1.47 ||Nil ||1.24* (15th September 2021) |
*'0.23 has been spent during the period April 2021 to 15thSep 2021 from company bank account and balance fund transferred to special Account.
|For HDSG & ASSOCIATES || |
|Chartered Accountants || |
|Firm Registration No: 002871N || |
|Sd/- || |
|Harbir Singh Gulati || |
|(Partner) || |
|Membership No: 084072 ||Place: New Delhi |
|UDIN: 22084072ANKUAK9117 ||Date: July 22 2022 |
"Annexure B" to the Independent Auditors' Report of evendate on the Standalone Ind AS Financial Statements of Ircon International Limited for theyear ended 31st March 2022
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of Ircon International Limited "the Company" as of March 31 2022 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date. Management's Responsibility for Internal FinancialControls
The Company's management is responsible for establishing andmaintaining internal financial controls based on "the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (ICAI)". These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies 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 Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditingprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design 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 andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting isa process 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 controlover financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement 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 FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting 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 the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us 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 312022 "based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India". However internal control needs furtherstrengthening in respect of the following areas identified as on 31.03.2022 based on ouraudit. a. The Company has an integrated ERP system which was not used at its fullpotential. Further the SAP project system module (PS) is required to generate theprojects invoices with integration support. b. The Inventory records at some units aremaintained manually and the inventory manual in SAP is under consideration.
Our opinion is not modified in respect of the above matters. OtherMatters
Our aforesaid report under section 143(3)(i) of the Act on the adequacyand operating effectiveness of the internal financial controls over financial reporting inso far as it relates to branches is based on the corresponding report of other auditors.
We have considered the identified areas and reported above indetermining the nature timing and extent of audit procedures applied in our audit of thestandalone financial statement of the company for the year ended 31st March2022 and these areas do not affect our opinion on the Standalone financial statement ofthe company.
|For HDSG & ASSOCIATES || |
|Chartered Accountants || |
|Firm Registration No: 002871N || |
|Sd/- || |
|Harbir Singh Gulati || |
|(Partner) || |
|Membership No: 084072 ||Place: New Delhi |
|UDIN:22084072ANKUAK9117 ||Date: July 22 2022 |