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ITL Industries Ltd.

BSE: 522183 Sector: Engineering
NSE: N.A. ISIN Code: INE478D01014
BSE 00:00 | 21 Sep 131.85 -4.35
(-3.19%)
OPEN

136.05

HIGH

136.05

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123.10

NSE 05:30 | 01 Jan ITL Industries Ltd
OPEN 136.05
PREVIOUS CLOSE 136.20
VOLUME 11802
52-Week high 225.00
52-Week low 57.05
P/E 6.57
Mkt Cap.(Rs cr) 42
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 136.05
CLOSE 136.20
VOLUME 11802
52-Week high 225.00
52-Week low 57.05
P/E 6.57
Mkt Cap.(Rs cr) 42
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 31stMarch 2020 and the Statement of Profit and Loss (including Other Comprehensive Income)Statement of Cash Flows and Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us 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 with the Indian Accounting Standardsprescribed under section 133 of the act read with Companies (Indian Accounting Standards)Rules 2015 as amended ("Ind AS") and other accounting principles generallyaccepted in India of the state of affairs of the Company as at March 31st2020 and its Profit including other comprehensive income its cash flows and the changesin equity for the year ended on that date.

BASIS FOR OPINION

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in theAuditor's Responsibility for the Audit of the Standalone Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our opinion on standalone financial statements.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone 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 Principal Audit Procedures/ 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 services and the time between the acquisition of assets or inventories for processing and their realisation in cash and cash equivalents.
The classification of assets and liabilities has been done on the basis of documentary evidences. Where conclusive evidences are not available the classification has been done on the basis of 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.
2. Non-responses of external confirmations request perpetrated pursuant to SA 505 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.
COVID-19 has impacted the procedure of external confirmation request by management to vendors and customers. Postal facilities were not available in the near end of the financial year. To combat this the management had sent positive external confirmation requests through
electronic modes. However due to suspension of business activities of many confirming parties there are fewer confirmations received than anticipated. In such events SA also directs the auditors to perform alternative audit procedures.
3. Evaluation of pending tax litigations/ The Company has pending litigation for demand in dispute under various tax statutes which involves significant judgment to determine the possible outcome of these disputes. We have obtained details of tax litigations under various statutes for the year ended 31st March 2020 from the management.
We have reviewed the management's underlying assumptions in estimating the tax provision and the possible outcome of the disputes. We have also reviewed the legal precedence and other rulings provided for review by the management in evaluating its position in various matters.
We have also reviewed the assumptions made by the management as at 31st March 2019 and evaluated whether any change was required on account of information and updates made available during the year.

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 Standalone Financial Statementsour responsibility 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.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENT

The Company's Board of Directors is responsible for the mattersstated in section 134(5) 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 cash flows and changes in equity of theCompany in accordance with the Ind AS and other accounting principles generally acceptedin India. 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 financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONEFINANCIAL STATEMENTS 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 misstatement 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 financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(I) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace 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.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the 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.

EMPHASIS OF MATTER

The Operations of the Company during the year ended 31st March 2020were marginally affected due to Lockdown announced by the Central / State Governments inthe month of March 2020 due to the outbreak ofNovel Coronavirus COVID19.

Considering the restrictions in physical movement and visits to thecompany offices the Company has given us access to their computer/ERP System. We wereable to access the relevant data & records for our Audit purpose. Further the companyhas provided all other data / information / records as required by us using e-data/e-mailsharing modes. We also had continuous communication with the Audit Team & Managementofthe Company using various modes such as Audio/Video Conferencing etc.

Due to the phase wise Lockdown imposed by Central / State Governmentsand the resulting travel restrictions it was not possible for us to physically visit theCompany on a regular basis and carry out the audit function. We have carried out the AuditProcess using various techniques of Online Auditing. We have verified the records /documents / statements received by us through electronic media. We have also receivedManagement Representation Letters wherever necessary. Using such techniques and relying onthe inputs provided by the management we have ensured reasonable assurance that theinformation / record / statements provided to us are free from material misstatement andadhere to the relevant standards.

We have carried out the Audit Process subject to our disclosures asmentioned above. The audit evidence obtained by us is adequate to express our auditopinion. While expressing our audit opinion we have also relied upon certifications bythe management or certifications by other independent auditors wherever required.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of section 143 (11) ofthe Act we give in the "Annexure A" a statement on the matters specified inthe paragraph 3 and 4 of the Order.

2. As required by Section 143 (3) ofthe 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 havebeen kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flows dealtwith by this report are in agreement with the relevant books of account.

(d) In our opinion the aforesaid standalone financial statementscomply with the Ind AS specified under section 133 of the Act.

(e) On the basis of the written representations received from thedirectors as on March 31st 2020 taken on record by the Board of Directors none of thedirector is disqualified as on March 31st 2020 from being appointed as a director interms of Section 164 (2) ofthe Act.

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to 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) of the Actas amended 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 ofthe 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 as amended in our opinion and to the best of our information and according tothe explanations given to us:

a. The Company has disclosed the impact of pending litigations as atMarch 31st 2020 on its financial position vide Additional Notes on Accounts no.27(B)(2)(A) in its standalone financial statements.

b. The Company has made adequate provision as at March 31st 2020 asrequired under the applicable law or Indian accounting standards for material foreseeablelosses acknowledged by the company if any on long-term contracts including derivativecontracts.

c. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

Statutory Auditors
FOR: MAHENDRA BADJATYA & CO
CHARTERED ACCOUNTANTS
ICAI FRN 001457C
CA NIRDESH BADJATYA
PARTNER
ICAI MNO 420388
PLACE: INDORE ICAI UDIN: 20420388AAAAIO8312
DATE: 23/07/2020

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

The Annexure required under CARO 2016 referred to in our Report to themembers of the ITL INDUSTRIES LIMITED ("the

Company") for the year ended March 31st 2020 andaccording to the information and explanations given to us we report as

under:

(i) (a) The Company has maintained adequate records showing generalparticulars including quantitative details and situation

ofFixed Assets.

(b) The fixed assets have been physically verified by the management ina phased manner with a regular programme of verification over a period of three years. Inour opinion this periodicity physical verification is reasonable having regard to the sizeof the company and the nature of its assets. The discrepancies noticed on suchverification which were not material and have been properly dealt with in the books ofaccount.

(c) On the basis of our examination of records of the Company wereport that The Title Deeds comprising all the immovable properties of land &buildings which are free hold are held in the name of company as at the balance sheetdate. In respect of lease hold immovable properties of land and building that have beentaken on lease and disclosed as property plant and equipment in the standalone financialstatements the lease agreements are in the name of the company where the Company is thelessee in the agreement.

(ii) In our opinion on the basis of our examination of the records ofthe company the inventories and stocks lying with third parties have been physicallyverified by the management during the year. For stock lying with third parties at year endwritten confirmation have been obtained. The material discrepancies noticed if any hasproperly been dealt with in the books of accounts.

(iii) The company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnership or other parties covered in the registermaintained under section 189 of the Companies Act 2013. Therefore clauses (iii) (a) (b)and (c) of the aforesaid order are not applicable.

(iv) In our opinion and according to information and explanations givento us the company has complied with provisions of Section 185 and 186 of the Act inrespect of grant of loans making investments and providing guarantees and securities asapplicable.

(v) The company has neither invited nor accepted any deposits from thepublic in accordance with the provisions of section 73 to 76 or any other relevantprovisions of the Act and rules framed there under. Accordingly paragraph 3(v) of theOrder is not applicable to the company.

(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 of the CompaniesAct 2013 and are of the opinion that prima facie the prescribed cost records have beenmaintained. We have however not made a detailed examination of the cost records with aview to determine whether they are accurate and complete.

(vii) (a)According to the records of the Company it is generallyregular in depositing undisputed statutory dues including

Provident Fund Employees' State Insurance Income Tax Goods andService Tax Duty of Custom and any other material statutory dues whichever is applicableto the company with the appropriate authorities during the year and no undisputed amountswere outstanding as at March 31st 2020 for a period of more than six months from thedate they become payable.

(b) There are no dues of Income Tax Goods and Service Tax Duty ofCustom and any other statutory dues which have not been deposited on account of anydispute except as under;

Name of Statute Forum where dispute is pending Period to which the Amount Relates Amount Involved Amount Unpaid
Central Sales Tax 1956 Appellate Authority FY 2014-15 23.53 17.65
FY 2011-12 48.65 34.17
FY 2015-16 31.30 22.49
FY 2016-17 26.64 23.98
Income Tax Act 1961 CPC Bengaluru AY 2011-12 0.41 0.41
Income Tax Act 1961 Jurisdictional AO AY 2018-19 9.96 9.96
Income Tax Act 1961 CPC Bengaluru AY 2019-20 0.35 0.35
Income Tax Act 1961 - CPC TRACES Prior Year 2.80 2.80
TDS demand

(viii) The Company has not defaulted in repayment of dues to banks andfinancial institution. There are no debenture holders and loan from government.

(ix) The company has not raised any money by way of initial publicoffer or further public offer (including debt instruments) and had not taken any term loanduring the year.

(x) Based upon the audit procedures performed no fraud by the companyor any fraud on the Company by its officers or employees has been noticed or reportedduring the course of our Audit.

(xi) To the best of our knowledge and belief managerial remunerationhas been paid / provided in accordance with the requisite approvals if any mandated bythe provisions of Section 197 read with Schedule V to the Companies Act 2013.

(xii) The Company is not a Nidhi company. Accordingly paragraph 3(xii)of the order is not applicable.

(xiii) In our opinion all transactions with the related parties are incompliance with section 177 and 188 of Companies Act 2013 wherever applicable and thedetails have been disclosed in the Financial Statements as required by the applicablestandards.

(xiv) Based on our examination of the record of the company thecompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year.

(xv) In our opinion the company has not entered into any non cashtransaction with directors or persons connected with him; therefore the reportingrequirement of the clause is not applicable to the company.

(xvi) In our opinion and as per the transactions of the company thecompany is not required to be registered u/s 45IA of the Reserve Bank of India Act1934therefore the reporting requirement of the clause is not applicable to the company.

Statutory Auditors
FOR: MAHENDRA BADJATYA & CO
CHARTERED ACCOUNTANTS
ICAI FRN 001457C
CA NIRDESH BADJATYA
PARTNER
ICAI MNO 420388
PLACE: INDORE ICAI UDIN: 20420388AAAAIO8312
DATE: 23/07/2020

ANNEXURE - "B" TO THE INDEPENDENT AUDITOR'S REPORT

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of ITL INDUSTRIES LIMITED ("the Company") as on March 31st2020 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date. MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIALCONTROLS

The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control 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("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting with reference to these standalonefinancial statements based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting with reference to these 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 over financial reporting with reference tothese standalone financial statements and their operating effectiveness. Our audit ofinternal financial controls over financial reporting included obtaining an understandingof internal financial controls over financial reporting with reference to these standalonefinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgment includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlsover financial reporting with reference to these standalone financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

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 themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIALREPORTING

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion to the best of our information and according to theexplanation given to us the Company has in all material respects a reasonable internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31st 2020based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Finance Controls Over Financial Reporting issued by The Institute ofChartered Accountants of India.

Statutory Auditors
FOR: MAHENDRA BADJATYA & CO
CHARTERED ACCOUNTANTS
ICAI FRN 001457C
CA NIRDESH BADJATYA
PARTNER
ICAI MNO 420388
ICAI UDIN: 20420388AAAAIO8312
PLACE: INDORE DATE: 23/07/2020

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