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ITL Industries Ltd.

BSE: 522183 Sector: Engineering
NSE: N.A. ISIN Code: INE478D01014
BSE 00:00 | 27 Jan 173.20 -11.40
(-6.18%)
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180.10

HIGH

181.95

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167.00

NSE 05:30 | 01 Jan ITL Industries Ltd
OPEN 180.10
PREVIOUS CLOSE 184.60
VOLUME 8357
52-Week high 209.00
52-Week low 108.00
P/E 7.98
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 180.10
CLOSE 184.60
VOLUME 8357
52-Week high 209.00
52-Week low 108.00
P/E 7.98
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

ITL Industries Ltd. (ITLINDUSTRIES) - Auditors Report

Company auditors report

TO THE MEMBERS OF ITL INDUSTRIES LIMITED

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS OPINION

We have audited the accompanying Standalone Financial Statements of ITLINDUSTRIES LIMITED ("the Company") which comprise the Balance Sheet as at March312022 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then ended andnotes to the Financial Statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as "Standalone FinancialStatements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Financial Statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards ("Ind AS") of the state of affairs ofthe Company as at March 312022 its total comprehensive income changes in equity and itscash flows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with Standards on Auditing (SAs)specified under section 143(10) of the Act. Our responsibilities under those Standards arefurther described in the Auditor?s Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India("ICAI") together with the ethical requirements that are relevant to our auditof the Financial Statements under the provisions of the Act and Rules there under and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements of thecurrent period. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. No. Key Audit Matter Procedures Performed / Auditor?s Response:
1. Appropriateness of Current / Non-current classification For the purpose of current/non-current classification of assets and liabilities the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of business and the time between the acquisition of assets or inventories for Sales processing and their realisation in cash and cash equivalents.
2. Non-responses of external confirmations request perpetrated pursuant to SA 505. The classification of assets and liabilities has been done based on documentary evidence. Where conclusive evidence is not available the classification has been done based on management?s best estimate of the period in which the assets would be realised or the liabilities would be settled. We have evaluated the reasonability of the management?s estimates.
3. Provisions and contingent liabilities relating to taxation litigations and arbitrations. The provisions and contingent liabilities relate to ongoing litigations and claims with various authorities and third parties. These relate to direct tax indirect tax claims and general legal proceedings arising in the regular course of business. As at the year ended 31st March 2022 the amounts involved are significant. The computation of a provision or contingent liability requires significant judgement by the Company because of the inherent complexity in estimating future costs. The amount recognised as a provision is the best estimate of the expenditure. The provisions and contingent liabilities are subject to changes in the outcomes of litigations and claims and the positions taken by the Company. It involves significant judgement and estimation to determine the likelihood and timing of the cash outflows and interpretations of the legal aspects tax legislations and judgements previously made by authorities. In the absence of related confirmations we performed alternative audit procedures like follow-up confirmation requests verification of subsequent payments and receipts to verify part of the balances appearing in the books of accounts.
4. Measurement of inventory quantities As of 31st March 2022 the Company has inventory of '380030093. This was determined a key audit matter as the measurement of these inventory quantities lying at the warehouse involves significant judgement and estimate resulting from measuring the area. The Company uses internal and external experts to perform assessments basis which the quantity for these inventories is estimated. Our audit procedures included: • Understanding the process followed by the Company for assessment and determination of the amount of provisions and contingent liabilities relating to taxation litigations and claims. • Evaluating the design and implementation and testing operating effectiveness of key internal controls around the recognition and measurement of provisions and reassessment of contingent liabilities. • Involving tax professionals with specialised skills and knowledge to assist in the assessment of the value of significant provisions and contingent liabilities relating to taxation matter on sample basis in light of the nature of the exposures applicable regulations and related correspondence with the authorities. • Inquiring the status in respect of significant provisions and contingent liabilities with the Company?s internal tax and legal team including challenging the assumptions and critical judgements made by the Company which impacted the computation of the provisions and inspecting the computation.
5. Timing of revenue recognition and adjustments for quality variances involving critical estimates Material estimation by the Company is involved in recognition and measurement of its revenue. The value and timing of revenue recognition for sale of goods varies from contract to contract and the activity can span beyond the year end. Our audit procedures relating to the measurement of inventory includes the following:
Revenue from sale of goods is recognised when control is transferred to the customers and when there are no other unfulfilled obligations. This requires detailed analysis of each sale agreement/contract/customer purchase order regarding timing of revenue recognition. • Understanding and evaluating the design and operating effectiveness of controls over physical count and measurement of such inventory.
Inappropriate assessment could lead to a risk of revenue being recognized on sale of goods before the control in the goods is transferred to the customer. • Evaluation of competency and capabilities of management?s experts.
Subsequent adjustments are made to the transaction price due to grade mismatch/slippage of the transferred goods. The variation in the contract price if not settled mutually between the parties to the contract is referred to third party testing and the Company estimates the adjustments required for revenue recognition pending settlement of such dispute. • Involving external expert for quantification of the inventories on sample basis.
Such adjustments in revenue are made on estimated basis following historical trend. • Physically observing inventory measurement and count procedures carried out by management using experts to ensure its appropriateness and completeness; and
Inappropriate estimation could lead to a risk of revenue being overvalued or undervalued. • Obtaining and inspecting inventory measurement and physical count results for such inventories including assessing and evaluating the results of analysis performed by management in respect of differences between book and physical quantities.
Accordingly timing of recognition of revenue and adjustments for quality variances involving critical estimates is a key audit matter. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
• Assessing the Company?s accounting policies for revenue recognition by comparing with the applicable accounting standards i.e Ind AS 115.
• Assessing the appropriateness of the estimated adjustments in the process.
• Testing the design implementation and operating effectiveness of key internal controls over timing of recognition of revenue from sale of goods and subsequent adjustments made to the transaction price.
• Performing testing on selected statistical samples of customer contracts. Checked terms and condition related to acceptance of goods acknowledged delivery receipts and tested the transit time to deliver the goods and its revenue recognition. Our tests of details focused on cutoff samples to verify only revenue pertaining to current year is recognized based on terms and conditions set out in sale agreements/ contracts and delivery documents. We also performed tests to establish the basis of estimation of the consideration and whether such estimates are commensurate with the accounting policy of the Company.

 

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR?SREPORT THEREON

The Company?s board of directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in Board?s Report including Annexure to Board?s Report and managementcompliance certificate but does not include the standalone Financial Statements and ourauditor?s report thereon.

Our opinion on the Standalone Financial Statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Financial Statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Financial Statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is nomaterial 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 FINANCIAL STATEMENTS

The Company?s Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standaloneFinancial Statements that give a true and fair view of the financial position financialperformance including other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding Ind AS specified under section 133 of the Act read with relevant rules issuedthere under. This responsibility also includes maintenance of adequate accounting recordsin accordance 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 Statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone Financial Statements management isresponsible for assessing the Company?s ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting 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 FINANCIALSTATEMENTS

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor?s report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone 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 misstatements of thestandalone Financial Statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3) (i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialStatements in place and 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?sreport to the related disclosures in the standalone Financial Statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor?s report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone Financial Statements including the disclosures and whether the standaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

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 Statements 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 standaloneFinancial 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.

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 the paragraph 3 and 4 of the Order to the extent applicable.

2. As required by Section 143 (3) of the Act based on our audit wereport 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.

c) The standalone Balance Sheet the Statements of Profit and Lossincluding Other Comprehensive Income Statements of Changes in Equity and the Cash FlowStatements dealt with by this report are in agreement with the books of account.

d) In our opinion the aforesaid standalone Financial Statements complywith the Accounting Standards specified under Section 133 ofthe Act.

e) On the basis of the written representations received from thedirectors as on 31st March 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2022 from being appointed as a director interms of Section 164 (2) ofthe Act;

f) 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 "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company?s internalfinancial controls over financial reporting.

g) With respect to the other matters to be included in theAuditor?s Report in accordance with the requirements of section 197(16) ofthe Act asamended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

h) 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 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations as of 31stMarch 2022 on its financial position in its financial statements - Refer Note 32(3a) tothe financial Statements.

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. The Company has transferred an amount of ' 2.03 Lakhs (P.Y - '1.46Lakhs) to the Investor Education and Protection Fund during the year ended 31stMarch 2022.

iv. (i) The management has represented that to the best of itsknowledge and belief other than as disclosed in the notes to the accounts no funds havebeen advanced or loaned or invested (either from borrowed funds or share premium or anyother sources or kind of funds) by the company to or in any other person(s) orentity(ies) including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries")or provide any guarantee security or the like on behalf of the Ultimate Beneficiaries (ifany);

(ii) The management has represented that to the best of its knowledgeand belief other than as disclosed in the notes to

the accounts no funds have been received by the company from anyperson(s) or entity(ies) including foreign entities ("Funding Parties") withthe understanding whether recorded in writing or otherwise that the company shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the Funding Party ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate Beneficiaries (if any); and

(iii) Based on such audit procedures that we (the auditors of thecompany) have considered reasonable and appropriate in the circumstances; nothing has cometo our notice that has caused us to believe that the representations under subclause (i)and (ii) contain any material misstatements.

v. The dividend declared an amount of '16.02 Lacs during the year bythe company is in compliance with section 123 of the Companies Act 2013.

vi. The company has used accounting software for maintaining its booksof account which has a feature of recording audit trail (edit log) facility and the samehas been operated throughout the year for all transactions recorded in the software andthe audit trail feature has not been tampered with and the audit trail has been preservedby the company as per the statutory requirements for record retention.

Annexure - "A" to the Independent Auditor?s Report

[Referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements? in the Independent Auditor?s Report of even date to themembers of ITL INDUSTRIES LIMITED on the Financial Statements for the year ended 31stMarch 2022]

The Annexure required under CARO 2020 referred to in our Report to themembers of ITL INDUSTRIES LIMITED ("the Company") for the year ended 31stMarch 2022 and according to information and explanations given to us we report as under:

i. a) (A) The company is maintaining reasonable records showing fullparticulars including quantitative details and situation of Property Plant andEquipment.

(B) The company is maintaining proper records showing full particularsof intangible assets.

b) These Property Plant and Equipment?s have been physicallyverified by the management at reasonable intervals and as informed no materialdiscrepancies were noticed on such verification. In our opinion the frequency ofverification is reasonable having regard to the size of the Company and the nature of itsassets.

c) The title deeds of all the immovable properties (other thanproperties where the company is the lessee and the lease agreements are duly executed infavour ofthe lessee) disclosed in the financial statements are held in the name ofthecompany.

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) The company does not have any benami property under the BenamiTransactions (Prohibition) Act 1988 (45 of 1988) and rules made there under Accordinglythe provisions of clause 3(i)(e) of the Order is not applicable.

ii. (a) The physical verification of inventory has been conducted atreasonable intervals by the management and in our opinion the coverage and procedure ofsuch verification by the management is appropriate; No discrepancies of 10% or more in theaggregate for each class of inventory were noticed and they have been properly dealt within the books of account.

(b) During the year the company has been sanctioned working capitallimits in excess of five crore rupees in aggregate from banks or financial institutionson the basis of security of current assets. The quarterly returns or statements filed bythe company with such banks or financial institutions are in agreement with the books ofaccount of the Company.

iii. During the year the company has made investments in providedguarantee or security or granted any loans or advances in the nature of loans secured orunsecured to companies firms Limited Liability Partnerships or any other parties and

(a) During the year the company has not provided loans or providedadvances in the nature of loans or stood guarantee or provided security to any otherentity and

(A) The Company has no joint venture but has subsidiary & associateand has not advanced loans or advances and guarantees or security given. Accordingly theprovisions of clause 3(iii)(a)(A) of the Order is not applicable.

(B) The aggregate amount during the year and balance outstanding atthe balance sheet date with respect to such loans or advances and guarantees or securityto parties other than subsidiaries joint ventures and associates are as under: -

(Amount in Rs)

2021-2022

2020-2021

Type of Borrower

Aggregate amount during the year

Balance outstanding at the balance sheet date

Aggregate amount during the year

Balance outstanding at the balance sheet date

PROMOTER

0

0

0

0

DIRECTORS

0

0

0

0

KEY MANAGERIAL PERSONNEL

0

0

0

0

OTHERS

(0.72)

200.00

200.72

200.72

 

(b) The investments made and the terms and conditions of the grant ofadvances in the nature of loans are not prejudicial to the Company?s interest. TheCompany has not provided any guarantee given any security.

(c) According to the information and explanations given to usrepayment of loan instalments together with interest wherever stipulated are regular.

(d) According to the information and explanations and based on ouraudit procedures there is no overdue amount that remains outstanding as the year end.

(e) None of the advances in the nature of loan granted and has fallendue during the year has been renewed or extended or fresh loans granted to settle theoverdue of existing loans given to the same parties.

(f) The Company has not granted any loans or advances in the nature ofloans to Promoters related parties as defined in clause (76) of section 2 of theCompanies Act 2013 either repayable on demand or without specifying any terms or periodof repayment. Accordingly the provisions of clause 3(iii)(f) of the Order is notapplicable.

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 185 and 186 of theAct in respect of grant of loans and making investments. The Company has not provided anyguarantees and securities.

v. In our opinion the Company has not accepted any deposits noraccepted any amounts which are deemed to be deposits within the meaning of Sections 73 to76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.

vi. We have broadly reviewed the cost records maintained by thecompany pursuant to the Companies (Cost Records and Audit) Rules 2014 as amendedprescribed by the Central Government under sub section (1) of section 148 ofthe CompaniesAct 2013 and are ofthe opinion that prima facie the prescribed cost records have beenmaintained. We have however not made a detailed examination ofthe cost records with aview to determine whether they are accurate and complete.

vii. a. The company is regular in depositing undisputed statutory duesincluding Goods and Services Tax provident fund employees' state insurance income-taxsales-tax service tax duty of customs duty of excise value added tax cess and anyother statutory dues to the appropriate authorities. Further no undisputed amountspayable in respect thereof were outstanding at the year-end for a period of more than sixmonths from the date they become payable. b. The following dues ofIncome Tax VAT &Central Sales Tax have not been deposited by the company on account of disputes: -

Name of statute

Nature of Dues

Demand (In ' lacs)

Period to which Amount Relates

Forum where dispute is pending

Income Tax Act 1961

Income Tax

0.41

AY 2011-12

CPC Bangalore

Income Tax Act 1961

Income Tax

11.35

AY 2018-19

CPC Bangalore

Income Tax Act 1961

Income Tax

0.35

AY 2019-20

CPC Bangalore

Income Tax Act 1961

TDS

0.12

AY 2022-23

CPC

Income Tax Act 1961

TDS

0.36

AY 2021-22

CPC

Income Tax Act 1961

TDS

0.22

FY 2020-21

CPC

Income Tax Act 1961

TDS

0.01

FY 2019-20

CPC

Income Tax Act 1961

TDS

2.47

Prior Years

CPC

Central Sales Tax 1956

CST

85.63

Prior Years

Appellate Authority

Value Added Tax

VAT

11.54

Prior Years

Appellate Authority

Total

112.46

 

viii. There were no transactions not recorded in the books of accountwhich have been surrendered or disclosed as income during the year in the tax assessmentsunder the Income Tax Act 1961 (43 of 1961) Accordingly the provisions of clause 3(viii)ofthe Order is not applicable.

ix. a) The Company has not defaulted in repayment of loans or otherborrowings or in the payment of interest thereon to any lender Accordingly theprovisions of clause 3(ix)(a) of the Order is not applicable.

b) The company is not declared willful defaulter by any bank orfinancial institution or other lender Accordingly the provisions of clause 3(ix)(b)ofthe Order is not applicable.

c) The company has taken the term loans during the year and wereapplied for the purpose for which the loans were obtained Accordingly the provisions ofclause 3(ix)(c) of the Order is not applicable.

d) The company has not raised any funds on short term basis which havebeen utilized for long term purposes Accordingly the provisions of clause 3(ix)(d) ofthe Order is not applicable.

e) The company has not taken any funds from any entity or person onaccount of or to meet the obligations of its subsidiaries associates or joint venturesAccordingly the provisions of clause 3(ix)(e) ofthe Order is not applicable.

f) The company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries joint ventures or associate companies Accordinglythe provisions of clause 3(ix)(f) ofthe Order is not applicable.

x. a) The Company did not raise moneys by way of initial public offeror further public offer (including debt instruments) during the year. Accordingly theprovisions of clause 3(x)(a) of the Order is not applicable. b) The Company has not madeany preferential allotment or private placement of shares or convertible debentures(fully partially or optionally convertible) during the year. Accordingly the provisionsof clause 3 (x)(b) ofthe Order is not applicable.

xi. a) No fraud by the company or any fraud on the company has beennoticed or reported during the year covered by our audit. Accordingly the provisions ofclause 3(xi)(a) of the Order is not applicable.

b) No report under sub-section (12) of section 143 of the Companies Acthas been filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies(Audit and Auditors) Rules 2014 with the Central Government. Accordingly the provisionsof clause 3(xi)(b) of the Order is not applicable.

c) There were no whistle-blower complaints received during the year bythe company. Accordingly the provisions of clause 3(xi)(c) of the Order is notapplicable.

xii. In our opinion the Company is not a Nidhi Company; accordinglythe provision of clause 3(xii) of the Order is not applicable.

xiii. In our opinion all transactions with the related parties are incompliance with Sections 177 and 188 of Act where applicable and the requisite detailshave been disclosed in the financial statements etc. as required by the applicable Indianaccounting standard.

xiv. a) The company has an internal audit system commensurate with thesize and nature of its business.

b) The reports of the Internal Auditors for the period under audit wereconsidered by the statutory auditor.

xv. In our opinion the company has not entered into any non-cashtransactions with the directors or persons connected with them covered under Section 192of the Act. Accordingly the provision of clause 3(xv) of the Order is not applicable.

xvi. (a) The company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934 (2 of 1934). Accordingly the provisions ofclause 3(xvi)(a) of the Order is not applicable.

b) The company has not conducted any Non-Banking Financial or HousingFinance activities without a valid Certificate of Registration (CoR) from the Reserve Bankof India as per the Reserve Bank of India Act 1934. Accordingly the provisions of clause3(xvi)(b) of the Order is not applicable.

c) The company is not a Core Investment Company (CIC) as defined in theregulations made by the Reserve Bank of India. Accordingly the provisions of clause3(xvi)(c) of the Order is not applicable.

d) The Group does not have any CIC as part of the Group. Accordinglythe provisions of clause 3(xvi)(d) of the Order is not applicable.

xvii. The company has not incurred cash losses in the financial yearand in the immediately preceding financial year. Accordingly the provision of clause3(xvii) of the Order is not applicable.

xviii. There has been no resignation of the statutory auditors duringthe year. Accordingly the provision of clause 3(xviii) of the Order is not applicable.

xix. On the basis of the financial ratios ageing and expected dates ofrealization of financial assets and payment of financial liabilities other informationaccompanying the financial statements the auditor?s knowledge of the Board ofDirectors and management plans we (the auditor) are of the opinion that no materialuncertainty exists as on the date of the audit report and that the company is capable ofmeeting its liabilities existing at the date of balance sheet as and when they fall duewithin a period of one year from the balance sheet date.

xx. a) In respect of other than ongoing projects the company has nounspent amount required to be transferred to a Fund specified in Schedule VII to theCompanies Act within a period of six months of the expiry of the financial year incompliance with second proviso to sub-section (5) of section 135 of the said Act.Accordingly the provision of clause 3(xx)(a) of the Order is not applicable. The companyhas provided for an amount of ' 13.80/- Lacs (Pr. Yr. ' 13.86/- Lacs) towards thedischarge of Corporate Social Responsibility b) The Company has no ongoing projects.Accordingly the provision of clause 3(xx)(b) of the Order is not applicable.

xxi. There have been no qualifications or adverse remarks by therespective auditors in the Companies (Auditor's Report) Order (CARO) reports of thecompanies included in the consolidated financial statements of the company.

Annexure - "B" to the Independent Auditor?s Report

(Referred to in paragraph 2 under ‘Report on Other Legal andRegulatory Requirements? in the Independent Auditor?s Report of even date to themembers of ITL INDUSTRIES LIMITED on the Standalone Financial Statements for the yearended 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")

OPINION

We have audited the internal financial controls over financialreporting of ITL INDUSTRIES LIMITED ("the Company") as of 31st March2022 in conjunction with our audit of the Financial Statements of the Company for the yearended on that date.

In our opinion and to the best of our information and according to theexplanation 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 31 March 2022 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by ICAI.

MANAGEMENT?S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company?s management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting 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 (the"Guidance Note"). 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 Act.

AUDITOR?S RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 misstatements of the Financial Statements whether due to fraud orerror.

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 WITH REFERENCE TO FINANCIALSTATEMENTS

A company's internal financial control over financial reporting is aprocess 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 control overfinancial reporting includes those policies and procedures that:

1. Pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany.

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 authorizations of management and directors of thecompany; and

3. Provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the Financial Statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TOFINANCIAL STATEMENTS

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.

STATUTORY AUDITORS
FOR MAHENDRA BADJATYA & CO.
CHARTERED ACCOUNTANTS
ICAI FRN 001457C
CA NIRDESH BADJATYA
PARTNER
ICAI MNO 420388
ICAI UDIN 22420388AJWJCU6782
PLACE: INDORE
DATE: 30/05/2022

 

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