TO THE MEMBERS OF ISMT LIMITED
Report on the Audit of the Standalone Financial Statements
1. Qualified Opinion
We have audited the standalone financial statements of ISMT Limited (theCompany) which comprise the Balance Sheet as at March 31 2019 and the statement ofProfit and Loss (including Other Comprehensive Income) statement of changes in equity andthe statement of cash flows for the year ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information(hereinafter referred to as the standalone financial statements).
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion section of our report the aforesaid standalone 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 the accounting principles generallyaccepted in India including Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rulesas amended and other accounting principles generally accepted in India of the state ofaffairs (financial position) of the Company as at 31 March 2019 and its loss (financialperformance including other comprehensive income) the changes in equity and its cashflows for the year ended on that date.
2. Basis for Qualified Opinion
A. The Company has outstanding Minimum Alternate Tax (MAT) entitlement classified asDeferred Tax Asset as per Ind AS- 12 Income Taxes of Rs. 82.05 Crores as on March 312019. Taking into consideration the loss during the period ended March 312019 and carriedforward losses under the Income Tax in our opinion it is not probable that the MATentitlement can be adjusted within the specified period against the future taxable profitsunder the provisions of Income Tax Act 1961. In view of the same in our opinion the MATentitlement cannot be continued to be recognised as an asset in terms of Ind AS-12 andGuidance note on accounting for credit available in respect of MAT under the IncomeTax Act 1961. Non-writing off of the same has resulted in understatement of lossfor the year ended March 31 2019 and overstatement of other equity by Rs. 82.05 Croresand its consequential effect on the Earnings per Share of the Company.
B. The Company through its subsidiary has invested Rs. 48.43 Crores in StructoHydraulics AB Sweden (SHAB). Net receivables (net of write offs) to the Company from SHABagainst supplies made is Rs. 15.41 Crores and payment made towards invocation of guaranteegiven by the Company in respect of loans availed by SHAB is Rs. 33.33 Crores (USD 5Million). The Company has received the approval from regulatory authorities for treatingsaid payment against invocation as equity investment in SHAB (considered as investment onadoption of Ind AS) andthe Company is taking steps for implementation of the same. SHABhas been incurring losses and its net worth is also partially eroded due to continuinglosses. No provision for diminution in value of investment and net receivable againstsupplies is made by the Company as explained in Note No.3.16. We are unable to comment onthe same and ascertain its impact if any on net loss for year ended March 31 2019carrying value of investment and other equity as at March 31 2019 in respect of abovematters.
C. The Company had recognized claim in earlier years of which outstanding balance ason March 31 2019 is Rs. 39.53 Crores against Maharashtra State Electricity DistributionCompany Ltd. (MSEDCL) for non-implementation of Energy Banking Agreement. The Company hadappealed to Appellate Tribunal (APTEL) against the order passed by Maharashtra ElectricityRegulatory Commission (MERC) and the same has been dismissed by the APTEL. The Company haspreferred appeal before the Hon'ble Supreme Court against the order of APTEL. Therealization of this claim is contingent and dependent upon the outcome of the decision ofthe Supreme Court. In our opinion the recognition of above claim being contingent assetin nature is not in conformity with Ind AS-37 Provisions Contingent liabilities andContingent assets. Recognition of the above claim has resulted into overstatement ofcarrying value of non -current assets and other equity by Rs.39.53 Crores as at March 312019. Refer Note No. 3.20 (i).
D. The Company has reclassified 40 MW Captive Power Project (CPP) at ChandrapurMaharashtra which was asset held for sale to Property Plant & Equipment for reasonsstated in Note No. 3.20(ii). The Company has expressed its inability to determinerecoverable value of CPP on re-classification on account of the uncertainty on thealternatives available and for the reasons stated in said note; hence the CPP is measuredon the Balance sheet date at the adjusted carrying amount of Rs. 236.08 Crores and not atlower of the adjusted carrying amount and the recoverable amount as required by Ind AS 105Non-current Assets Held for Sale and Discontinued Operations. In view of theaforesaid we are unable to determine the impact of the same if any on net loss for yearended March 31 2019 carrying value of the CPP and other equity as at March 312019.
E. The Company is unable to determine the recoverable value of investment (includingadvances) in Tridem Port and Power Company Private Limited (TPPCL) wholly ownedsubsidiary company of Rs 116.08 Crores on Balance Sheet date for the reasons stated inNote No.3.17. Hence impairment loss if any is not recognised as required by Ind AS 36Impairment of the Assets. In view of the aforesaid we are unable to determinethe impact of the same if any on the net loss for the year ended March 31 2019 carryingvalue of the investment and other equity as at March 31 2019.
F. Pending approval/ sanction of debt restructuring scheme by lenders and balanceconfirmation from lenders the Company has not provided for the overdue /penal interestif any. The quantum and its impact if any on the net loss for the year ended March 312019 carrying value of the Borrowings (i.e. Current Financial Liabilities) and otherequity as at March 312019 is unascertainable. Refer Note No 3.19.
We conducted our audit in accordance with Standards on Auditing (SAs)specified under section 143(10) of the Companies Act 2013. Our responsibilities underthose Standards are further described in 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 (ICAI) together with the ethical requirements that are relevant to ouraudit of the standalone financial statements under the provisions of the Act and Rulesmade there under and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our qualified auditopinion on the standalone financial statements.
3. Material uncertainty Related to Going Concern
The Company has accumulated losses and its net worth has been fully eroded due tocontinuous losses and the Company's current liabilities exceeded its current assets as atMarch 31 2019. These conditions indicate the existence of a material uncertainty that maycast significant doubt on the Company's ability to continue as a going concern. Howeverthe financial statements of the Company have been prepared on a going concern basis forthe reasons stated in the Note No. 3.18.
Our opinion is not modified in respect of this matter.
4. Emphasis of Matter(s)
We draw attention to Note No. 1.31 of standalone financial statements regardingremuneration payable to Managing Director and Executive Director amounting to Rs. 3.16Crores for the year ended March 31 2019 (Rs. 6.02 Crores cumulative up to March 31 2019)is subject to approval of Lenders.
Our opinion is not qualified in respect of this matter.
5. 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. Inaddition to the matters described in the Basis for Qualified Opinion section referred inpara 2 above and Material Uncertainty Related to Going Concern section in para 3 above Wehave determined the matters described in Annexure A to be the key audit matters to becommunicated in our report.
6. Information Other than the Standalone Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other Information comprises the information included in Company's AnnualReport but does not include the standalone financial statements and our auditor's reportthereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.
If based on the work we have performed on the other information obtained prior to thedate of this auditor's report 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.
7. Management's Responsibility for the Standalone 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 standalone financial statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness
of the accounting records relevant to the preparation and presentation of thefinancial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process
8. Auditor's Responsibilities for the Audit of the Standalone Financial Statements
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.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
a) Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
b) Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 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.
c) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
d) 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 our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
e) 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.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually 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 standalone 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 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.
9. Report on Other Legal and Regulatory Requirements
a) As required by The Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India (Ministry of Corporate Affairs) in terms of sub section (11) ofsection 143 of the Companies Act 2013 we give in Annexure B a statement on the mattersspecified in paragraphs 3 and 4 of the Order.
b) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act except to the extent referred in Annexure III tothis report.
c) As required by section 143 (3) of the Act we report to the extent applicablethat:
i) We have sought and obtained all the information and explanations except for thematter described in the Basis for Qualified Opinion paragraph above which to the best ofour knowledge and belief were necessary for the purposes of our audit;
ii) except for the effects/possible effects of the matters described in the Basis forQualified Opinion paragraph above in our opinion proper books of account as required bylaw have been kept by the Company so far as it appears from our examination of thosebooks;
iii) The Company has no branch offices whose accounts are audited by branch auditors;
iv) except for the effects/possible effects of the matters described in the Basis forQualified Opinion paragraph above The Balance Sheet the Statement of Profit and Loss(Including Other Comprehensive Income) the Statement of Changes in Equity and theStatement of Cash Flows dealt with by this Report are in agreement with the books ofaccount;
v) In our opinion except for the effects/possible effects of the matters described inthe Basis for Qualified Opinion paragraph above the aforesaid standalone financialstatements comply with the Indian Accounting Standards prescribed under section 133 of theAct and the rules prescribed there under;
vi) The matters described in the Basis for Qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company.
vii) On the basis of the written representations received from the directors as onMarch 31 2019 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2019 from being appointed as a director in terms of section164 (2) of the Act.
viii) The qualifications relating to maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.
ix) 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 C; and
x) 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. Refer Note No. 3.1 on Contingent Liabilities disclosing the impact of pendinglitigation on the financial position of the Company.
ii. The Company does not have any long-term contracts including derivative contractshaving any material foreseeable losses for which provision was required.
iii. There has been 3 days delay in transferring amounts required to be transferredto the Investor Education and Protection Fund by the Company.
For DNV & Co.
Firm's registration No.:102079W
CA Bharat Jain
Membership No.: 100583
Date: June 14 2019
Annexure A: KEY AUDIT MATTERS as referred in Para 5 of the Standalone Auditor's Report:
|KEY AUDIT MATTER ||RESPONSE TO KEY AUDIT MATTER |
|Revenue Recognition: || |
|(Refer Note No. 2.4 for policies in respect of revenue recognition) ||Our procedures in respect of recognition of revenue included the following: |
|Revised Ind AS 115 is applicable w.e.f. April 1 2018 which inter alia brings in concept of Transfer of control with five step model as against Transfer of Risk & Reward in revenue recognition. ||a) Assessing the appropriateness of the revenue recognition accounting policies by comparing with applicable accounting standards. |
|Revenue from sale of Product is recognised when the control over the products have been transferred to the customer based on the terms and conditions of the sales contracts entered into with the customers across geographies. ||b) Testing the design implementation and operating effectiveness of the Company's general IT controls and key IT application/manual controls over the Company's systems which govern recording of revenue in the general ledger accounting system. |
| ||c) Performing substantive testing (including year-end cutoff testing) by selecting samples of revenue transactions recorded during the year (and before and after the financial year) and verifying the underlying documents which includes sales invoices/contracts and shipping documents. |
|We have identified recognition of revenue as a key audit matter as revenue is a key performance indicator and there is a risk of revenue being fraudulently overstated arising from pressure to achieve performance targets as well as meeting external expectations. ||d) Assessing manual journals posted to revenue to identify unusual items other than already identified. |
| ||e) Evaluating the adequacy of the standalone financial statement disclosures including disclosures of key assumptions judgments and sensitivities. |
|Property Plant and Equipment: || |
|Refer Note No. 2.5 and 2.21 for policies in respect of Property Plant and Equipment ||In view of the significance of the matter our procedures in this area included the following : |
|The carrying amount of Property Plant and Equipment is Rs1359.58 Crores which represents 55% of the total assets of the Company. ||a) Testing the design implementation and operating effectiveness of key controls over the impairment review process including the review and approval of forecasts and review of valuation models. |
|The value in use of these Property Plant and Equipment have been determined based on certain assumptions and estimates of future performance. ||b) assessing the valuation methodology used by management and testing the mechanical accuracy of the impairment models |
|The value in use so determined of each Cash Generating Unit (CGU) identified by the management have been used for the impairment evaluation of the Property Plant and Equipment. ||c) evaluating the reasonableness of the valuation assumptions such as discount rates used by management through reference to external market data; |
|Due to the significance of the value of the PPE the inherent uncertainty and judgment involved in forecasting performance and the estimates involved in discounting future cash flows we have considered these estimates to be significant to our overall audit strategy and planning. ||d) challenging the appropriateness of the business assumptions used by management such as sales growth and the probability of success of new products; |
| ||e) evaluating the past performances where relevant and assessing historical accuracy of the forecast produced by management; |
| ||f) Considering whether events or transactions that occurred after the balance sheet date but before the reporting date affect the conclusions reached on the carrying values of the assets and associated disclosures. |
| ||g) Evaluating the adequacy of the disclosures made in the standalone financial statements |
| ||h) Also refer para 2D of the Auditor's Report regarding inability to determine net realizable value of some of the assets. |
|Impairment of Trade Receivables: || |
|Trade Receivables net of impairment allowance amounts to Rs.295.04 Crores as on 31st March 2019 which constitutes about 12% of the total Assets of the Company. ||We have performed the following processes in relation to Management's Judgment in identification of impairment of value of Receivables and adequacy of impairment provision: |
|Management's judgment is involved in identifying impairment in the value of the receivable which has an adverse impact on the profits of the Company. ||a) We have referred to the defined policy in place stipulating the methodology of making impairment provision in respect of overdue Receivable amounts. |
| ||b) We have also reviewed age-wise analysis in respect of Receivables and ensured that the provisioning is made according to such policy. The above referred provisioning policy stipulates different provisioning norms for Receivables with confirmations and without confirmations |
| ||c) We have sought information and explanations from the department Heads regarding the status of receivable for the purpose of ensuring adequate impairment provisions. |
| ||d) We have also tested subsequent collections made from the overdue receivables |
|Evaluation of Uncertain outcome of pending litigation || |
|Refer Note No. 3.1 for policies in respect of contingent liabilities The Company is subject to periodic challenges by local tax authorities during the normal course of business in respect of indirect tax Matters. The company is having indirect tax liability in dispute amounting to Rs 51.73 Crores. ||Our audit procedures include the following substantive procedures: |
| ||a) Obtained understanding of key issues involved in pending tax and other litigations |
| ||b) Read and analysed select key correspondences external legal opinions / consultations by management; |
|Further the company is having pending legal cases filed against the company with the claim amount involved of Rs 107.75 Crores (net of deposit). ||c) Discussed with appropriate senior management and evaluated management's underlying key assumptions in assessing management's estimate of the possible outcome of the disputed matters. |
|These litigations involve significant management judgment to determine the possible outcome of the uncertain tax positions and legal cases consequently having an impact on related accounting and disclosures in the standalone financial statements. || |
ANNEXURE B' TO THE INDEPENDENT AUDITOR'S REPORT
Referred to in paragraph 9 A under the heading Report on Other legal andRegulatory Requirements of our report on even date:
(i) 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 deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date. In respect ofimmovable properties of land and building that have been taken on lease and disclosed asfixed assets in the financial statements the lease agreements are in the name of theCompany.
(ii) a) As explained to us the inventories including majority of the goods lying withthird parties have been physically verified by the management at reasonable intervalsduring the year.
b) In our opinion and according to the information and explanations given to us thediscrepancies noticed on physical verification between physical stock and the book recordswere not material and have been properly dealt with in the books of account.
(iii) As per the records of the Company it has not granted any loans secured orunsecured to companies firms Limited Liability Partnerships or other parties covered inthe register maintained under section 189 of the Act.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans investments guarantees and securities.
(v) The Company has not accepted any Deposit from the public.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for maintenance of cost records undersubsection (l) of section 148 of the Act & we are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have however not madea detailed examination of records with a view to determine whether they are accurate andcomplete.
(vii) a) According to the records of the Company the Company is regular in depositingundisputed statutory dues including Provident Fund Employee State Insurance Income TaxGoods and Service Tax Central Sales Tax Custom Duty Excise Duty Value Added Tax Cessand any other statutory dues with the appropriate authorities. According to theinformation and explanations given to us there are no undisputed amounts payable inrespect of such statutory dues which have remained outstanding as at March 31 2019 for aperiod of more than six months from the day they become payable.
b) The disputed statutory dues that have not been deposited on account of disputespending before the appropriate authorities are as mentioned in the Annexure- I to thisreport.
(viii) According to the information and explanations given to us the Company hasdefaulted in repayment of dues to banks and Government. Details of defaults are mentionedin Annexure- II to this report. The Company does not have any debenture holders.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and the term loans.
(x) Based upon the audit procedures performed by us and according to the informationand explanations given to us no fraud on or by the Company by its officers or employeeshas been noticed or reported during the year.
(xi) According to the information and explanations given to us and based on ourexamination 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 except to the extent referred in Annexure IIIto this report.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act wherever applicable and the details ofsuch transactions have been disclosed in the Ind AS financial statements as required bythe applicable Accounting Standards.
(xiv) According to the information and explanations given 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 explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For DNV & Co.
Chartered Accountants Firm's registration No.:102079W
CA Bharat Jain
Membership No.: 100583
Date: June 14 2019
Annexure - I
Particulars of dues of Sales Tax/ Excise Duty/ Custom Duty/ Income Tax not deposited onaccount of disputes:
| || || ||Rs. in Crore |
|Nature of Statue ||Nature of Dues ||Amount Disputed ||Forum where dispute is pending |
|Central Sales Tax Act 1956 ||Sales Tax ||0.09 ||Tribunal |
| || ||6.42 ||Dy. Commissioner (Appeals) |
| || ||0.01 ||High Court Mumbai |
| || ||0.41 ||Dy. Commissioner |
| || ||2.18 ||Joint Commissioner (Appeal) |
|Maharashtra Sales Tax Act 1959 ||Sales Tax ||0.81 ||Tribunal |
| || ||0.47 ||High Court Bombay |
| || ||5.76 ||Dy. Commissioner (Appeals) |
| || ||2.11 ||Joint Commissioner ( Appeal) |
|Central Excise Act 1944 ||Excise Duty ||15.89 ||CESTAT |
| || ||6.89 ||High Court Bombay |
| || ||1.96 ||Commissioner |
| || ||0.08 ||Asst. Commissioner |
| || ||1.00 ||Add. Commissioner |
|Customs Act1962 ||Custom Duty ||1.49 ||Dy. Commissioner |
| || ||2.50 ||Asst. Commissioner |
|Income Tax Act 1961 ||Income Tax ||0.20 ||Tribunal Pune |
Installments due including interest outstanding as at March 31 2019:
| || || || || ||Rs. in Crore |
|Name of the Lenders/ Government ||0-30 Days ||31-60 Days ||61- 90 Days ||More than 90 Days ||Total |
|Andhra Bank ||3.93 ||0.84 ||0.93 ||77.95 ||83.65 |
|Bank of Baroda ||9.66 ||2.57 ||2.85 ||279.68 ||294.76 |
|Central Bank of India ||0.57 ||0.33 ||0.36 ||43.77 ||45.03 |
|ICICI Bank Limited ||0.80 || || ||79.03 ||79.83 |
|*Edelweiss Asset Reconstruction Co. Ltd. ||1.91 ||0.68 ||0.75 ||30.47 ||33.81 |
|IKB Deutsche Industrie Bank AG || || || ||62.41 ||62.41 |
|**Asset Reconstruction Company India Ltd. ||27.14 ||20.30 ||28.49 ||842.54 ||918.47 |
|*** SC Lowy Primary Investment Limited ||0.43 || || ||49.75 ||50.18 |
|State Bank of India ||1.28 ||0.67 ||0.74 ||65.20 ||67.89 |
|Total ||45.72 ||25.39 ||34.12 ||1530.80 ||1636.03 |
* Loans Assigned by ICICI Bank Limited
** Loans Assigned by Indian Overseas Bank Bank of India IDBI Bank and Bank ofMaharashtra. ***Loans Assigned by Bank of India
Details of Managerial Remuneration paid / provided in excess of requisite approval:
| || || || ||Rs. in Crores |
|Designation ||Amount paid / provided ||Amount paid / provided in excess of the limit prescribed ||Amount due as recoverable from Balance Sheet ||Steps taken for recovery |
|Managing Director || || || || |
|Remuneration: Paid ||1.23 ||1.23 ||#1.23 ||- |
|Provided ||0.45 ||0.45 || ||- |
|Executive Director || || || || |
|Remuneration: || || || || |
|Paid ||0.84 ||0.84 ||#0.84 ||- |
|Provided ||0.64 ||0.64 || ||- |
|Total ||3.16 ||3.16 ||2.07 || |
# Recoverable subject to approval of Lenders. Rs.2.86 Crores up to F.Y. 2017-18 paid/provided
ANNEXURE C' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in para 9C(i) under Report on Other Legal & RegulatoryRequirements' section of our report of even date) Report on the Internal FinancialControls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of ISMTLimited (Company) as of March 31 2019 in conjunction with our audit ofstandalone financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls The Company's management isresponsible for establishing and maintaining internal financial controls based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India. 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 of fraudsand 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'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(Guidance Note) issued by the Institute of Chartered Accountants of India& the Standards on Auditing prescribed under Section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects. Our audit involves performing procedures toobtain audit evidence about the adequacy of the internal financial controls system overfinancial reporting and their operating effectiveness. Our audit of internal financialcontrols over financial reporting included obtaining an understanding of internalfinancial controls over financial reporting assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial 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 31 March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For DNV & Co.
Chartered Accountants Firm's registration No.:102079W
CA Bharat Jain
Membership No.: 100583
Date: June 14 2019