To the Members of ISMT Limited
Report on the Audit of standalone financial statements
We have audited the accompanying Standalone Financial Statements of ISMT Limited("the Company") which comprise the Balance Sheet as at March 31 2022 and thestatement of Profit and Loss (including Other Comprehensive Income) statement of changesin equity and the statement of cash flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as "the Standalone FinancialStatements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India including Indian Accounting Standards ("Ind AS") prescribed undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules asamended of the state of affairs of the Company as at 31 March 2022 and its profit(including other comprehensive income) the changes in equity and its cash flows for theyear ended on that date.
2. Basis for Opinion
We conducted our audit of the Standalone Financial Statements in accordance withStandards on Auditing ("SAs") specified under section 143(10) of the CompaniesAct 2013. Our responsibilities under those Standards are further described in theAuditors Responsibilities for the Audit of the Standalone 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 the ethical requirements that are relevant to our audit of the StandaloneFinancial Statements under the provisions of the Act and Rules made there under and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAIs Code of Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Financial Statements.
3. Material uncertainty Related to Going Concern
We draw attention to Note No 3.22 of the Standalone Financial Statements whichindicates that successful debt resolution is inter alia resulting into positive net worthof the Company and its current liabilities does not exceed its current assets as of March31 2022. The Company is having cash profit for the year ended March 31 2022. Theseevents and conditions and based on the other matters as set forth in Note No 3.21 of theStandalone Financial Statement indicate that a material certainty exists on theCompanys ability to continue as a going concern and are the basis for preparation ofStandalone Financial Statements on going concern basis.
Our opinion is not modified in respect of this matter.
4. Emphasis of Matter (s)
a) Note No. 3.2 of the Standalone Financial Statements regarding remuneration toErstwhile Managing Director and Erstwhile Non-Executive Director of the Company amountingto Rs 2.61 Crore and Rs 0.40 Crore respectively for the period ended March 10 2022 (Rs.4.60 Crore cumulative up to March 31 2022) is subject to approval of appropriateauthorities.
b) Note No. 3.13 of the Standalone Financial Statements regarding write off of MinimumAlternate Tax (MAT) credit (Deferred Tax) of Rs 82.05 Crore on exercise of the tax rateoption permitted under section 115BAA of the Income-tax Act 1961 as of March 31 2022.
c) Note No 3.19 and Note No 3.20 of the Standalone Financial Statements regardingimpairment provision made by the Company of Rs 78.41 Crore in respect of its investment(including long term advances considered as equity component) in wholly owned subsidiaries"Structo Hydraulic Sweden" (SHAB) (including investment through Its SubsidiaryCompany ISMT Enterprises S.A. Luxembourg) and "Tridem Port and Power CompanyPrivate Limited" (TPPCL) based on the management assessment and valuation report ofindependent valuer.
d) Note No. 3.22 of the Standalone Financial Statements regarding writeback ofoutstanding principal debt and unpaid interest due to lenders amounting to Rs 2775.96Crore pursuant to the One-time settlement of dues with the lenders;
e) Note No. 3.23 (i) of the Standalone Financial Statements regarding write off of Rs39.53 Crores Government dues from Maharashtra State Electricity Distribution Company Ltd.(MSEDCL) for non-implementation of Energy Banking Agreement;
f) Note No. 3.23 (ii) of the Standalone Financial Statements regarding impairmentprovision made by the Company in respect of carrying value of 40 MW Captive Power Project(CPP) at Chandrapur Maharashtra of Rs 163.92 Crore based on the management assessment andvaluation report of an independent valuer.
Our opinion is not modified in respect of above stated matter.
5. Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements of the current period.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described in Annexure Ato be the key audit matters to be communicated in our report.
6. Information Other than the Standalone Financial Statements and AuditorsReport Thereon
The Companys Board of Directors is responsible for the preparation of the otherinformation. The other Information comprises the information included in ManagementDiscussion and Analysis Boards Report including Annexures to Boards ReportBusiness Responsibility Report Corporate Governance and Shareholders Informationbut does not include the Standalone Financial Statements and our auditors 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 thework we have performed on the other information obtained prior to the date of thisauditors report we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
7. Managements Responsibility for the Standalone Financial Statements
The Companys 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 Indian Accounting Standards (Ind AS) specified under section 133 ofthe Act. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand 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 standalone financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error. In preparing the StandaloneFinancial Statements management is responsible for assessing the Companys abilityto continue as a going concern disclosing as applicable matters related to goingconcern and using the going concern basis of accounting unless management either intendsto liquidate the Company or to cease operations or has no realistic alternative but to doso.
The Board of Directors are also responsible for overseeing the Companys financialreporting process
8. Auditors Responsibilities for the Audit of the Standalone FinancialStatements
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 auditors report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud 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 Standalone Financial Statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Standalone FinancialStatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control;
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls with reference to Standalone FinancialStatements in place and the operating effectiveness of such controls;
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management;
Conclude on the appropriateness of managements 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 theCompanys ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors report to therelated disclosures in the Standalone Financial Statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors report. However future events or conditionsmay cause the Company to cease to continue as a going concern; and
Evaluate the overall presentation structure and content of the Standalone FinancialStatements including the disclosures and whether the Standalone Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
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 Standalone Financial Statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified 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 Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.
9. Report on Other Legal and Regulatory Requirements
A. As required by The Companies (Auditors Report) Order 2016 issued by theCentral Government of India (Ministry of Corporate Affairs) in terms of sub section (11)of section 143 of the Companies Act 2013 we give in Annexure B a statement on thematters specified in paragraphs 3 and 4 of the Order.
B. As required by section 143 (3) of the Act we report to the extent applicablethat:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
c) The Company has no branch offices whose accounts are audited by branch auditors;
d) The Balance Sheet the Statement of Profit and Loss (Including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account;
e) The aforesaid Standalone Financial Statements comply with the Indian AccountingStandards prescribed under section 133 of the Act and the rules prescribed there under asamended;
f) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of section 164 (2) of theAct.
g) with respect to the adequacy of the internal financial controls with respect toStandalone Financial Statements of the Company and the operating effectiveness of suchcontrols refer to our separate report in "Annexure C";
h) With respect to the other matters to be included in the Auditors 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;
i) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements Refer Note 3.1 of StandaloneFinancial Statements;
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 no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that to the best of its knowledge and beliefno funds (which are material either individually or in the aggregate) have been advancedor loaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other person or entity including foreignentity ("Intermediaries") with the understanding whether recorded in writingor otherwise that the Intermediary shall whether directly or indirectly lend or investin other persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;
(b) The Management has represented that to the best of its knowledge and belief nofunds (which are material either individually or in the aggregate) have been received bythe Company from any person or entity including foreign entity ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and(b) above contain any material misstatement.
v. The Company Board of Director has not proposed any dividend for the financialyear covered under Audit. The Company had not paid dividend in respect of previousfinancial year.
For DNV & Co.
Firms registration No.:102079W
CA Bharat Jain
Membership No.: 100583
Date: May 9 2022
|Key Audit matters ||How Was the Key Audit Matter Addressed in the Audit |
|Property Plant and Equipment (including Right of Use Assets). ||In view of the significance of the matter our procedures in this area included the following: |
|(Refer Note No 1.1 2.5 2.6 and 2.20 of the Standalone Financial Statements) ||a. Review the existence assessment of PPE through records maintained and periodical verification process adopted by the Company; |
|The carrying amount of Property Plant and Equipment ("PPE") (including Right of Use Assets) and Capital work in progress is Rs 1083.28 Crore which represents about 54.89% of the total assets of the Company. ||b. Testing the design implementation and operating effectiveness of key controls over asset capitalisation and impairment review process including the review and approval of forecasts and review of valuation models; |
|The Company has made provision for impairment of Rs 163.92 Crore against carrying value of PPE as on March 31 2022. ||c. Assessing the valuation methodology used by Companys specialists 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 Management has under taken an impairment assessment at year end of the carrying value of PPE (including Right of Use Assets) and Intangibles in accordance with Ind AS 36 "Impairment of Assets". ||d. Evaluating reasonableness of valuation assumptions such as discount rates used by Companys specialists through reference to external market data; |
|Due to the significance of the value of the PPE the inherent uncertainty and judgment involved for determining value in use and impairment analysis thereof we have considered these estimates to be significant to our overall audit strategy and planning. ||e. Considering the potential impact of possible downside changes in the key assumptions; |
| ||f. Evaluated the objectivity and independence of Companys specialists involved in the valuation process and; |
| ||g. Assessed the adequacy of the disclosures made in the Standalone Financial Statements for compliance with disclosure requirements. |
|Evaluation of Uncertain outcome of pending litigation (Refer Note No 3.1 and 2.21 of the Standalone Financial Statements) ||In view of the significance of the matter our procedures in this area included the following: |
|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 liabilities in dispute amounting to Rs 31.10 Crore as on March 31 2022 Further the Company is having pending legal cases filed against the Company with the claim amount involved of Rs 11.96 Crore. ||a. Obtained understanding of key issues involved in pending tax and other litigations; |
|These litigations involve significant management judgment to determine the possible outcome of uncertain tax positions & legal cases consequently having an impact on related accounting & disclosures in Standalone Financial Statements. ||b. Testing key controls surrounding litigation regulatory and tax procedures; |
| ||c. Read and analyzed select key correspondences external legal opinions / consultations by management; |
| ||d. Discussed with appropriate senior management and evaluated managements underlying key assumptions in assessing managements estimate of the possible outcome of the disputed matters; |
| ||e. Review the basis and amounts of provisions made by the Company against pending litigation; |
| ||f. Obtained representation letter from the management on the assessment of these matters; |
| ||g. Based on the evidence obtained while noting the inherent uncertainty with such legal and tax matters we determined the level of provisioning as at March 31 2022 to be appropriate and; |
| ||h. Assessed the adequacy of the disclosures made in the Standalone Financial Statements for compliance with disclosure requirements. |
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 Property Plant and Equipment ("PPE") andrelevant details of right-of-use assets.
b) The Company has maintained proper records showing full particulars of intangibleassets.
c) The Company has a program of verification to cover all the items of PPE andright-of-use assets in a phased manner which in our opinion is reasonable having regardto the size of the Company and the nature of its assets. Pursuant to the program certainPPE and right-of-use assets were physically verified by the management during the year.According to the information and explanations given to us no material discrepancies werenoticed on such verification.
d) According to the information and explanations given to us and based on theexamination of the records provided to us we report that the title deeds comprising allthe immovable properties of land and buildings which are freehold and disclosed in thestandalone financial statements are held in the name of the Company as at the balancesheet date. In respect of immovable properties of land and building that have been takenon lease and disclosed as Right of Use Asset ("ROU") in the Standalone FinancialStatements the lease agreements are in the name of the Company.
e) The Company has not revalued any of its Property Plant and Equipment (includingright-of-use assets) and intangible assets during the year.
f) According to the information and explanations given to us the records examined byus no proceedings have been initiated during the year or are pending against the Companyas at March 31 2022 for holding any benami property under the Benami Transactions(Prohibition) Act 1988 (as amended in 2016) and rules made thereunder.
(ii) a) As explained to us the inventories including goods lying with third partieshave been physically verified by the management at reasonable intervals during the year.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 exceeding 10% or more in case of aggregate for each class of inventory.
b) The Company has not been sanctioned working capital limits in excess of Rs 5 crorein aggregate at any points of time during the year from banks or financial institutionson the basis of security of current assets and hence reporting under clause 3(ii)(b) ofthe Order is not applicable.
(iii) During the year the Company has not made investments in provided any guaranteeor security or granted any loans and advances in the nature of loans secured or unsecuredto companies firms Limited Liability Partnerships except long term advance (consideredas equity component) to a wholly owned subsidiary company of Rs 0.47 Lakhs and hencereporting under clause 3(iii) of the Order is not applicable.
(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 or amounts which are deemed to bedeposits. Hence reporting under clause 3(v) of the Order is not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersubsection (l) of section 148 of the Act and 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 2022 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) There were no transactions relating to previously unrecorded income that havebeen surrendered or disclosed as income during the year in the tax assessments under theIncome Tax Act 1961 (43 of 1961).
(ix) a) According to the information and explanations given to us during the yearthere are defaults in repayment of dues to lenders till execution of onetime settlementagreement (OTS) with lenders and post that outstanding principal and unpaid interest arepaid as per the terms of OTS. Details of defaults are mentioned in Annexure- II to thisreport.
b) According to the information and explanations given to us the Company has not beendeclared wilful defaulter by any bank or financial institution or government or anygovernment authority.
c) The Company has not taken any term loan during the year. Hence reporting underclause 3(ix)(c) of the Order is not applicable.
d) According to the information and explanations given to us and the proceduresperformed by us and on an overall examination of the financial statements of the Companywe report that no funds raised on short-term basis have been used for long-term purposesby the Company.
e) On an overall examination of the financial statements of the Company the Companyhas not taken any funds from any entity or person on account of or to meet the obligationsof its subsidiaries.
f) The Company has not raised any loans during the year on the pledge of securitiesheld in its subsidiaries or associate companies and hence reporting on clause 3(ix)(f) ofthe Order is not applicable.
(x) a) The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year and hence reporting under clause3(x)(a) of the Order is not applicable.
b) In our opinion and according to the information and explanations given to us theCompany has utilized funds raised by way of preferential allotment of equity shares forthe purposes for which they were raised (xi) Based upon the audit procedures performed byus and according to the information and explanations given to us
a) No fraud on or by the Company has been noticed or reported during the year.
b) No report under sub-section (12) of section 143 of the Companies Act has been filedin Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules 2014with the Central Government during the year and upto the date of this report.
c) We have taken into consideration the whistle blower complaints received by theCompany during the year (and upto the date of this report) while determining the naturetiming and extent of our audit procedures.
(xii) The Company is not a Nidhi Company and hence reporting under clause
(xii) of the Order is not applicable.
(xiii) In our opinion the Company is in compliance with section 177 and 188 of theCompanies Act 2013 with respect to applicable transactions with the related parties andthe details of related party transactions have been disclosed in the Standalone FinancialStatements as required by the applicable accounting standards.
(xiv) a) The Company has an internal audit system in place. In our opinion and based onour examination we are of the opinion that the internal audit system is required to bestrengthened in certain areas commensurate with the size and the nature of its business.
b) We have considered the internal audit reports for the year under audit issued tothe Company during the year and till date in determining the nature timing and extent ofour audit procedures.
(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) of the Order is not applicable.
(xvi) a) The Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934. Hence reporting under clause 3(xvi)(a) and (b) of theOrder is not applicable.
b) According to the information and explanation given to us the Company is not a CoreInvestment Company (CIC) and there is no CIC within the Group (as defined in the CoreInvestment Companies (Reserve Bank) Directions 2016) and accordingly reporting underclause 3(xvi) (c) and (d) of the Order is not applicable.
(xvii) The Company has not incurred cash losses during the current financial year buthas incurred cash losses of Rs 31.36 Crore in the immediately preceding financial year.The cash losses figures have been arrived after considering the effect of thequalifications whose effect have been quantified and the effect of unquantifiedqualifications have not been taken into consideration for reporting under this clause.
(xviii) There has been no resignation of the statutory auditors of the Company duringthe year and accordingly reporting under clause 3(xviii) of the Order is not applicable.(xix) On the basis of the financial ratios ageing and expected dates of realization offinancial assets and payment of financial liabilities other information accompanying thefinancial statements and our knowledge of the Board of Directors and Management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report indicating that Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.
(xx) In view of losses in three immediately preceding financial years the Company isnot required to incur expenditure on CSR Activities under Section 135(5) of the CompaniesAct 2013. Accordingly reporting under clause 3(xx)(a) and 3(xx)(b) of the Order is notapplicable for the year.
|For DNV & Co. |
|Chartered Accountants |
|Firms registration No.:102079W |
|CA Bharat Jain |
|Membership No.: 100583 |
|UDIN: 22100583AIQVRY3304 |
|Place: Pune |
|Date: May 9 2022 |
Annexure - I
Particulars of dues of Sales Tax / Excise Duty /Custom Duty/ Income Tax not depositedon account of disputes:
|Nature of Statue ||Nature of Dues ||Amount Disputed ||Forum where dispute is pending |
|Central Sales Tax Act 1956 ||Sales Tax ||0.08 ||Assessing Officer |
| || ||0.01 ||High Court Mumbai |
| || ||2.37 ||Maharashtra Sales Tax Tribunal |
| || ||1.36 ||Joint Commissioner (Appeals) |
|Maharashtra Sales Tax Act 1959 ||Sales Tax ||0.33 ||Maharashtra Sales Tax Tribunal |
| || ||0.07 ||Joint Commissioner (Appeals) |
|Central Excise Act 1944 ||Excise Duty ||16.43 ||CESTAT |
| || ||6.74 ||High Court Bombay |
| || ||1.96 ||Commissioner Appeals |
| || ||0.88 ||Appellate Commissioner |
|Customs Act1962 ||Custom Duty ||1.49 ||Deputy Commissioner |
| || ||0.25 ||Assistant Commissioner |
| || ||2.01 ||CESTAT |
|Income Tax Act 1961 ||Income Tax ||1.43 ||Income Tax Tribunal |
Default in repayment of dues to Lenders including interest up to the date of payment asper One Time Settlement Agreement:
|Name of the Lenders ||0-30 Days ||31-60 Days ||61- 90 Days ||More than 90 Days ||Total |
|Andhra Bank ||1.14 ||0.93 ||2.33 ||134.48 ||138.88 |
|Bank of Baroda ||4.75 ||2.84 ||7.65 ||543.11 ||558.35 |
|Central Bank of India ||0.44 ||0.36 ||0.57 ||53.72 ||55.09 |
|ICICI Bank Limited ||0.68 ||0.00 ||0.91 ||125.70 ||127.29 |
|IKB Deutsche Industrie Bank AG ||0.52 ||0.00 ||0.69 ||102.06 ||103.27 |
|*Edelweiss Asset Reconstruction Co. Ltd. ||0.93 ||0.76 ||0.76 ||77.10 ||79.55 |
|**Asset Reconstruction Company India Ltd. ||23.75 ||22.56 ||24.97 ||2413.04 ||2484.32 |
|*** SC Lowy Primary Investment Limited ||0.37 ||0.00 ||0.49 ||62.45 ||63.31 |
|Total ||32.58 ||27.45 ||38.37 ||3511.66 ||3610.06 |
* Loans Assigned by ICICI Bank Limited.
** Loans Assigned by Indian Overseas Bank Bank of India IDBI Bank Bank ofMaharashtra and State Bank of India. ***Loans Assigned by Bank of India.
Refer Note No 3.22 of the Standalone Financial Statements regarding execution of onetime settlement agreement with lenders in respect of settlement of principal outstandingdebt and unpaid interest and accordingly payment has been made by the Company in March2022.
Details of Managerial Remuneration paid / provided in excess of requisite approval:
|Designation ||Amount paid / provided ||Amount paid / provided in excess of requisite approval ||Amount due as recoverable from Balance Sheet ||Steps taken for recovery |
|Erstwhile || || || || |
|Managing Director || || || || |
|Remuneration: || || || || |
|Paid ||- ||- ||- ||- |
|Provided ||2.61 ||2.61 ||- ||- |
|Erstwhile || || || || |
|Non-Executive Director || || || || |
|Remuneration: || || || || |
|Paid ||- ||- ||- ||- |
|Provided ||0.40 ||0.40 ||- ||- |
|Total ||3.01 ||3.01 ||- ||- |
ANNEXURE C TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 9 B (g) under Report on Other Legal and RegulatoryRequirements section of our report of even date)
Report on the Internal Financial Controls with reference to standalone financialstatements under Clause (i) of Subsection 3 of section 143 of the Companies Act 2013("the Act")
We have audited the internal financial controls with reference to standalone financialstatements of ISMT Limited ("the Company") as of March 31 2022 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to standalone financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to companys policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. 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 with reference to standalone financialstatements was established and maintained and if such controls operated effectively in allmaterial respects. Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to standalone financial statement included obtaining anunderstanding of internal financial controls with reference to standalone financialstatements 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 auditors judgement including the assessment ofthe risks of material misstatement of the standalone financial statements whether due tofraud or error. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Companys internalfinancial controls system with reference to standalone financial statements.
Meaning of Internal Financial Controls with reference to standalone financialstatements
A companys internal financial control with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A Companysinternal financial control with reference to standalone financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the Company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the companys assets that could havea material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls with reference to standalonefinancial statements
Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at March 31 2022 based on the internal control with referenceto standalone financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For DNV & Co.
Firms registration No.:102079W
CA Bharat Jain
Membership No.: 100583
Date: May 9 2022