To the Members of IVP Limited
Report on the Audit of the Ind AS Financial Statements Opinion
We have audited the financial statements of IVP Limited ("the Company")which comprise the balance sheet as at 31 March 2020 and the statement of profit and loss(including other comprehensive income) statement of changes in equity and statement ofcash flows for the year then ended and notes to the financial statements including asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2020 and loss and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the 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 together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current year. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
Description of Key Audit Matter
|Key audit matter ||How the matter was addressed in our audit |
|Trade receivable and provisioning || |
|As at 31 March 2020 the carrying amount of trade receivables was R 9227 lakhs which accounted for 42% of the Company's total assets. ||Our audit procedures to assess the recoverability of trade debtors included the following: |
|The Company determines at each balance sheet date the existence of any objective evidence of impairment of trade receivables. Basis this evaluation Company provides for impairment allowance which comprises of a specific element based on individual debtors and a collective element based on historical experience adjusted for certain current factors. In computing the allowance Company considers factors such as type of products sold credit terms ageing of receivables current creditworthiness past collection history insurance cover as also historical loss experience. ||- Assessing the design and implementation of the Company's internal control in relation to the revenue and collection cycle particularly the controls over receivables collection; |
|We focused on this area because: ||- Obtaining an understanding Company's judgment about recoverability of individual trade debtor balances. Evaluating the provisions for doubtful debt s made by Company for these individual balances with reference to the debtors' financial condition industry in which the debtors are operating ageing of balances historical and post year- end collection records; |
|Trade receivables and its loss allowance are significant to the Company. We identified recoverability of trade debtors as a key audit matter because of delays in collections of amounts due as also the recognition of expected credit losses which is inherently subjective and requires the exercise of significant company judgment. ||- Assessing on a sample basis items in the trade receivables' ageing report were classified within the correct ageing bracket by comparing individual items in the report with underlying documentation; |
| ||- Comparing on a sample basis cash receipts from customers subsequent to the financial year end relating to trade receivable balances as at 31 March 2020 with bank statements and relevant remittance documentation; and |
| ||- Evaluate the rationale of Company's loss allowance estimates by inspecting the information used by the Company such as ageing of overdue balances extent of insurance coverage historical and post year-end collection trend from debtors legal notices issued to overdue debtors and the historical and estimated loss rate. |
|Deferred tax on the indexation benefit of land || |
|As at 31 March 2020 net deferred tax assets recognized were R 497 lakhs. ||Our audit procedures over recognition of deferred tax assets included the following: |
|Deferred tax assets include deferred tax of R 573 lakhs recognized on carry-forward losses and unabsorbed depreciation aggregating R 1641 lakhs. ||- Obtained an understanding of the process and tested the controls over recording of deferred tax and review of deferred tax at each reporting date; |
|The analysis of the recoverability of such deferred tax assets has been identified as a key audit matter because the assessment process involves judgement regarding the future profitability and the likelihood of the realization of these assets in particular whether there will be taxable profits in future periods that support the recognition of these assets. This requires assumptions regarding future profitability which is inherently uncertain. ||- We tested the computation of the amounts recognized as net deferred tax assets; |
| ||- We evaluated company assumptions used to determine the probability that deferred tax assets recognized in the balance sheet will be recovered through taxable income in future years by comparing them against profit trends and future business plans; also compared actual results achieved with forecasts in prior periods; and |
| ||- Read and assessed the disclosure made in the financial statements for assessing compliance with disclosure requirements. |
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the state of affairs loss and other comprehensiveincome changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring accuracy and completeness of the accounting records relevant to the preparationand presentation of the financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.
In preparing the financial statements the Management and Board of Directors areresponsible 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 the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the 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 todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the financial statements made by theManagement and Board of Directors.
Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the 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 auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication. Report onOther Legal and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
(A) As required by Section 143(3) of the Act we report that:
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 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;
d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder section 133 of the Act;
e) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of Section164(2) of the Act;
f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".
(B) 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 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31 March 2020 onits financial position in its financial statements - Refer Note 34 to the financialstatements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;
iv. The disclosures in the financial statements regarding holdings as well as dealingsin specified bank notes during the period from 8 November 2016 to 30 December 2016 havenot been made in these financial statements since they do not pertain to the financialyear ended 31 March 2020.
(C) With respect to the matter to be included in the Auditors' Report under section197(16):
In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us. Annexure A to the Independent Auditors' Report on thefinancial statements
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
(i) (a) The Company has maintained its fixed asset showing quantitative details andlocation of its fixed assets. The costs
incurred on purchase or construction of individual components/constituents of fixedassets have been recorded in the register on a line-item basis. The management is in theprocess of updating the fixed asset register to reflect on a consolidated basis theaggregate cost incurred for purchase or construction of individual items of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of 2 years. In ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the Company and the nature of its assets. Pursuant to the programme certain fixedassets were physically verified during the year. No material discrepancies were noticed onsuch verification.
(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties included in property plant and equipment are held in the name of the Company.
(ii) The inventory except goods-in-transit has been physically verified by themanagement during the year. In our opinion the frequency of such verification isreasonable. The discrepancies noticed on verification between the physical stock and thebook records were not material and have been appropriately dealt with in the books ofaccount.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013 ("the Act"). Accordingly the provisions of clause 3(iii)(a) (b) and (c) of the Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us theCompany has not given any loan made any investment provided any guarantee and securitiesas per the provisions of Section 185 and 186 of the Act. Accordingly paragraph 3 (iv) ofthe Order is not applicable to the Company.
(v) In our opinion and according to information and explanations given to us theCompany has not accepted deposits from the public as per the directives issued by theReserve Bank of India under the provisions of Section 73 to 76 of the Act or any otherrelevant provisions of the Act and the relevant rules framed thereunder. Accordinglyparagraph 3(v) of the Order is not applicable to the Company.
(vi) The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013 in respect of the products manufactured by theCompany. We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records undersection 148(1) of the Companies Act 2013 in respect of manufacture of products and are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the
Company amounts deducted / accrued in the books of account in respect of undisputedstatutory dues including Provident fund Employees' State Insurance Income-tax Goods andServices tax Duty of customs cess and any other material statutory dues have beenregularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees' State Insurance Income-tax Goods andServices tax Duty of customs cess and any other material statutory dues were in arrearsas at 31 March 2020 for a period of more than six months from the date they becamepayable except for the following dues:
|Name of Statute ||Nature of the dues ||Amount (Rupees) ||Period to which the amount relates |
|The Employees Provident Fund and Miscellaneous Provision Act 1952 ||Provident Fund ||214444 ||February 2019 to June 2019 |
(b) According to the information and explanations given to us there are no dues ofIncome tax Sales tax Service tax Duty of customs Duty of excise Value added tax orGoods and Services tax which have not been deposited by the Company on account ofdisputes except for the following:
|Name of Statute ||Nature of the dues ||Amount (Rupees) ||Period to which the amount relates ||Forum where dispute is pending |
|The Bihar Sales Tax Act 1944 ||Sales Tax ||12668 ||F.Y1992-93 ||Deputy Commissioner (Appeals) Jamshedpur |
|The Central Sales Tax Act 1956 ||Sales Tax ||91700 ||F.Y1992-93 ||Deputy Commissioner (Appeals) Jamshedpur |
| ||Sales Tax (net of deposit of R 134308) ||313384 ||F.Y2015-16 ||Joint Commissioner (Appeals) Bangalore |
|The Integrated Goods and Services Tax Act 2017 ||Goods and Services Tax (net of deposit of R 21900) ||416056 ||F.Y2018-19 ||Joint Commissioner Bhopal |
|The Central Excise Act 1944 ||Duty of Excise (net of deposit of R 288872) ||651639 ||FY 1996-99 ||Commissioner (Appeals) |
|The Income Tax Act 1961 ||Income Tax ||434050 ||F.Y. 2012-13 ||CIT(Appeals) |
| ||Income Tax ||190710 ||F.Y. 2013-14 ||CIT(Appeals) |
| ||Income Tax ||418480 ||F.Y. 2014-15 ||CIT(Appeals) |
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to banks. The Companydid not have any outstanding loans or borrowings from financial institutions or governmentand there are no dues to debenture holders during the year.
(ix) In our opinion and according to the information and explanations given to us theCompany did not raise any money by way of initial public offer or further public offer(including debt instruments) and term loans during the year. Accordingly paragraph 3(ix)of the Order is not applicable to the Company.
(x) According to the information and explanations given to us no material fraud on theCompany by its officers and employees or fraud by the Company has been noticed or reportedduring the course of our audit. Accordingly paragraph 3(x) of the Order is not applicableto the Company.
(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V of the Act for the year ended 31 March 2020.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.
(xiii) In our opinion and according to the information and explanations given to usall transactions with related parties are in compliance with sections 177 and 188 of theAct and the details as required by the applicable accounting standards have beendisclosed in the financial statements.
(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made preferential allotmentor private placement of shares or fully or partly convertible debentures during the year.Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us the Company has notentered into non-cash transactions with directors or persons connected with them duringthe year. Accordingly paragraph 3(xv) of the Order is not applicable to the Company.
The Company is not required to be registered under Section 45-IA of the Reserve Bank ofIndia Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable to theCompany.
Annexure B to the Independent Auditors' Report on the financial statements
(Referred to in paragraph 2(A)(f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report on the internal financial controls with reference to the aforesaid financialstatements under Clause (i) of sub-section 3 of section 143 of the Companies Act 2013
We have audited the internal financial controls with reference to financial statementsof IVP Limited ("the Company") as of 31 March 2020 in conjunction with our auditof the financial statements of the Company for the year ended on that date.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2020 based on the internal financial controls withreference to 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 (the "Guidance Note").
Management's Responsibility for Internal Financial Controls
The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. 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 company's policies the safeguarding ofits 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 (hereinafter referred to as"the Act").
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to financial statements.
Meaning of Internal Financial controls with Reference to financial statements
A company's internal financial controls with reference to financial statements 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 controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
Inherent Limitations of Internal Financial controls with reference to financialstatements
Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
| ||For B S R & Associates LLP |
| ||Chartered Accountants |
| ||Firm's Registration No: 116231W/W-100024 |
| ||Shabbir Readymadewala |
|Place : Mumbai ||Partner |
|Date : 29 June 2020 ||Membership No. 100060 |
| ||ICAI UDIN: 20100060AAAACB4732 |