To The Members of Mahindra EPC Irrigation Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements ofMahindra EPC Irrigation Limited ("the Company") which comprise the BalanceSheet as at 31 March 2021 and the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Cash Flows and the Statement of Changes in Equityfor the year then ended and a summary of significant accounting policies and otherexplanatory 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 the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2021and its profit total comprehensive income its cash flows and the changes in equity forthe year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act(SAs). 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 made thereunder 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 audit opinion on the 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. We have determined that there are no key audit matters to be communicatedin our report.
Information Other than the Financial Statements and Auditor'sReport Thereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the financial highlights managementdiscussion & analysis Board report and related annexure there to corporategovernance but does not include the standalone financial statements consolidatedfinancial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusion thereon
In connection with our audit of the standalone financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.
If based on the work we have performed we conclude that thereis a material misstatement of this other information we are required to report that fact.We have nothing to report in this regard.
Management's Responsibility for the Standalone FinancialStatements
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 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 the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements management 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 Responsibility for the Audit of the Standalone 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 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 control 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 the 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 audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to ceaseto 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.
Report on Other Legal and Regulatory Requirements
1. 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 Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the Statement of Cash Flows and Statement of Changes in Equity dealtwith by this Report are in agreement with the relevant books of account.
d. In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from thedirectors as on 31 March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2021 from being appointed as a director in termsof Section 164(2) of the 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 A". 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 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 as amended in ouropinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements.
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company.
2. 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 "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.
For Deloitte Haskins & Sells
Chartered Accountants (Firm's Registration No. 117364W)
(Membership Number: 102637) UDIN: 21102637AAAABU1236
Date: 11 May 2021 Place:- Nashik
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f) under Report on Other Legal andRegulatory Requirements' section of our report of even date)
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 Mahindra EPC Irrigation Limited ("the Company") as of March 312021 in conjunction with our audit of the standalone Ind AS financial statements of theCompany for the year ended on that date.
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. 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 respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting of the Company based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
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 judgement including the assessment ofthe risks of material misstatement 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 Over Financial Reporting
A company's internal financial control over financial reporting isa process 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 controlover financial 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.
In our opinion to the best of our information and according to theexplanations 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 March 31 2021 based on thecriteria for internal financial control over financial reporting established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.
For Deloitte Haskins & Sells
Chartered Accountants (Firm's Registration No. 117364W)
Kedar Raje Partner
(Membership Number: 102637) UDIN: 21102637AAAABU1236 Date: 11 May 2021Place: Nashik
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under Report on Other Legal and
Regulatory Requirements' section of our report of even date)
i. (a) The Company has maintained proper records
showing full particulars including quantitative details and situationof property plant and equipment.
(b) The Company has a programme of verification of property plant andequipment to cover all the items in a phased manner over a period of three years which inour opinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme certain fixed assets were physically verified by theManagement during the year. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deed / transferdeed / conveyance deed provided to us we report that the title deeds comprising all theimmovable properties of buildings which are freehold are held in the name of the Companyas at the balance sheet date. Immovable properties of buildings whose title deeds havebeen pledged as security for loans availed from banks are held in the name of the Companybased on the confirmation directly received by us from the bank. In respect of immovableproperties of land that have been taken on lease and disclosed as prepaid asset in the IndAS financial statements the lease agreements are in the name of the Company where theCompany is the lessee in the agreement.
ii. As explained to us the inventories were physically verified duringthe year by the Management at reasonable intervals except stock lying with third partiesfor which confirmations have been obtained and no material discrepancies were noticed onphysical verification.
iii. The Company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under Section 189 of the Act.
iv. The Company has not granted any loans made investments or providedguarantees to which the provisions of Sections 185 and 186 of the Act apply and hencereporting under clause (iv) of CARO 2016 is not applicable.
v. According to the information and explanations given to us theCompany has not accepted any deposit during the year. In respect of unclaimed depositsthe Company has complied with the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the Companies (Acceptance of Deposits) Rules 2014 as amended.According to the information and explanations given to us no order has been passed by theCompany Law Board or the National Company Law Tribunal or the Reserve Bank of India or anyCourt or any other Tribunal.
vi. The maintenance of cost records has been prescribed by the CentralGovernment under Section 148(1) of the Act. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under Section 148(1) of the Act and areof the opinion that prima facie the prescribed cost records have been made andmaintained. We have however not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.
vii. According to the information and explanations given to us inrespect of statutory dues:
(a) The Company has generally been regular in depositing undisputedstatutory dues including provident fund employees' state insurance income-taxgoods and services tax customs duty cess and other material statutory dues applicable toit with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of providentfund employees' state insurance income-tax goods and services tax customs dutycess and other material statutory dues in arrears as at 31 March 2021 for a period of morethan six months from the date they became payable.
(c) Details of dues of income-tax goods and services tax sales-taxservice tax customs duty excise duty and value added tax which have not been depositedas on 31 March 2021 on account of disputes are given below:
|Name of statute ||Nature of dues ||Forum where dispute is pending ||Period to which the amount relates ||Amount unpaid (Rs. in lakhs) |
|Central Excise Act 1944 ||Excise Duty ||Commissioner of Central Excise ||FY 1996-97 ||174.33 |
|Commissioner of Central Excise ||FY 1997-98 ||37.21 |
|Madhya Pradesh Vat Act 2002 ||Sales Tax ||Addtl CCT/APP DC/ DCAPP DC Bhopal ||FY 2014-15 ||424.09 |
|Chhattisgarh VAT Act 2003 ||Sales Tax ||Deputy Commissioner of Commercial Tax Raipur ||FY 2014-15 ||11.41 |
|Income Tax Act 1961 ||Income Tax ||Commissioner of Income Tax (Appeals) ||FY 2016-17 ||140.50 |
| || ||Commissioner of Income Tax (Appeals) ||FY 2011-12 ||193.94 |
| || ||Commissioner of Income Tax (Appeals) ||FY 2017-18 ||48.46 |
|Tamil Nadu VAT Act 2006 ||Sales Tax ||State Tax Officer ||FY 2016-17 ||13.62 |
| ||Sales Tax ||State Tax Officer ||FY 2017-18 ||5.13 |
viii. In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings to banksand government. The Company has not borrowed from financial institutions and has notissued any debentures.
ix. The Company has not raised moneys by way of initial public offer orfurther public offer (Including debt instruments) or term loans and hence reporting underclause (ix) of CARO 2016 is not applicable.
x. To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company and no material fraud on the Company byits officers or employees has been noticed or reported during the year.
xi. In our opinion and according to the information and explanationsgiven to us the Company has paid / provided managerial remuneration in accordance withthe requisite approvals mandated by the provisions of Section 197 read with Schedule V tothe Act.
xii. The Company is not a Nidhi Company and hence reporting underclause (xii) of CARO 2016 is not applicable.
xiii. In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Sections 177 and 188 of the Act whereapplicable for all transactions with the related parties and the details
of related party transactions have been disclosed in the Ind ASfinancial statements etc. as required by the applicable accounting standards.
xiv. During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures andhence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.
xv. In our opinion and according to the information and explanationsgiven to us during the year the Company has not entered into any non-cash transactionswith its directors or directors of its holding company or persons connected with them andhence provisions of Section 192 of the Act are not applicable.
xvi. The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934.
For Deloitte Haskins & Sells
Chartered Accountants (Firm's Registration No. 117364W)
Kedar Raje Partner
(Membership Number: 102637) UDIN: 21102637AAAABU1236
Date: 11 May 2021