Praveg Communications (India) Ltd.
|BSE: 531637||Sector: Others|
|NSE: N.A.||ISIN Code: INE722B01019|
|BSE 00:00 | 30 Jul||117.10||
|NSE 05:30 | 01 Jan||Praveg Communications (India) Ltd|
|Mkt Cap.(Rs cr)||216|
|Mkt Cap.(Rs cr)||216.40|
Praveg Communications (India) Ltd. (PRAVEGCOMM) - Auditors Report
Company auditors report
Praveg Communications (India) Limited
(Formerly known as Sword and Shield Pharma Limited in which PravegCommunications Limited has been amalgamated)
REPORT ON THE AUDIT OF
THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements ofPraveg Communications (India) Limited (formerly known as Sword and Shield Pharma Limitedin which Praveg Communications Limited has been amalgamated) ("the Company")which comprise the Balance Sheet as at March 31 2020 the Statement of Profit and Loss(including Other Comprehensive Income) the Statement of Changes in Equity and theStatement of Cash Flows for the year ended on that date and a summary of the significantaccounting policies and other explanatory information (hereinafter collectively referredto as "the standalone financial statements").
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 and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 312020 the profit and total comprehensiveincome changes in equity and its cash flows 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 specified under section 143(10) of the CompaniesAct 2013 (SAs). Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Financial Statements section ofour 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 theindependence requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone financialstatements.
EMPHASIS OF MATTER
1.We draw attention to Note No.41 to the accompanying standalonefinancial statements which explains the uncertainties and the management's assessment ofthe financial impact due to the lockdown and other restrictions related to the COVID-19pandemic situation for which a definitive assessment of the impact in the subsequentperiod is highly dependent upon circumstances as they evolve. Our opinion is not modifiedin respect of the matter.
2.We draw attention to Note No.40 to the accompanying standalonefinancial statements regarding accounting of the scheme of amalgamation of PravegCommunications Limited in Praveg Communications (India) Limited from the appointed datebeing 1st April 2016 as approved by the National Company Law Tribunal (NCLT) AhmedabadBench though the Scheme has become operationally effective from1stMarch 2020howevercomparatives for the previous year have been disclosed in the financial statements of bothcompanies.
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. For each matter below ourdescription of how our audit addressed the matter is provided in that context describedhereunder.
We have fulfilled the responsibilities described in the Auditor'sresponsibilities for the audit of the standalone financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of
procedures designed to respond to our assessment of the risks ofmaterial misstatement of the standalone financial statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion on the accompanying standalone financial statements;
1)Accuracy of recognition measurement presentation and disclosures ofrevenues and other related balances in view of Ind AS 115 "Revenue from Contractswith Customers":-
The application of the Ind AS115 for revenue recognition involvescertain key judgements such as identification of distinct performance obligationsdetermination of transaction price of the identified performance obligations theappropriateness of the basis used to measure revenue recognized over a period.
How our audit addressed this matter : -
We assess the company's process to identify distinct performanceobligations transaction price and appropriateness of the basis used to measure revenuerecognized. Our audit approach consisted testing of the design and operating effectivenessof the internal controls and substantive testing as follows:
We evaluated the design of internal controls relating to revenuerecognition. In the process we selected samples of continuing and new contracts andtested the operating effectiveness of the internal control relating to identification ofthe distinct performance obligations and determination of transaction price& basis ofmeasurement. We carried out a combination of procedures involving enquiry and observationre-performance and inspection of evidence in respect of operation of these controls.
Selected a sample of continuing and new contracts and performed thefollowing procedures:
Read analysed and identified the distinct performanceobligations in these contracts.
Compared these performance obligations with that identified andrecorded by the Company.
Sample of revenues disaggregated by type and service offeringswas tested with the performance obligations specified in the underlying contracts.
Evaluated the contracts on the basis of whether the contract isFixed Price or Variable price contract terms of obligation fulfilment duration ofcontract and accrual points of revenue from such contracts.
2)Effect of scheme of amalgamation as approved by Hon'ble NCLT Matter:-
Hon'ble NCLT have approved the scheme of amalgamation of PravegCommunications Limited into Praveg Communications (India) Limited by virtue of its orderdtd 23-01-2020 which was filed with the MCA and became effective on 24-01-2020 which ismade operationally effective from 01-03-2020 from appointed date 01-04-2016. The Companyaccounted for the amalgamation in the nature of merger under pooling of interest method asdirected by the scheme approved by the Hon'ble NCLT.
We have determined this to be a key audit matter in view of the natureof transaction complexity involved in selection of accounting treatment for mergersignificant management judgment involved with respect to alignment of accounting policiesestimates and accounting post-merger and disclosure of comparative information.
How our audit addressed this matter:-
We evaluated the appropriateness of treatment as per 'Pooling ofinterest' method of accounting adopted by the management to account for the merger asdirected by the approved scheme of Hon'ble NCLT.
On verification of the Order of Hon'ble NCLT Scheme approved byHon'ble NCLT standards of accounting for treatment of business combinations i.e. Ind AS103 and requirements of other accounting standards with respect to business combinationsread with Companies (Indian Accounting Standards) Rules 2015 the conclusion ofmanagement that the accounting treatment of the amalgamation shall be given as per thespecific directions under the scheme approved by the Hon'ble NCLT and accounting treatmentof the amalgamation shall be as per pooling of interest method as directed by the schemeapproved by Hon'ble NCLT found appropriate.
We have corroborated the adherence to the directions as mentioned inthe Scheme approved by Hon'ble NCLT in the management's alignment of accounting policiesand estimates by comparing the significant accounting policies and estimates.
INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS ANDAUDITOR'S REPORT THEREON
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the AnnualReport but does not include the standalone financial statements and our auditor's reportthereon.
Our opinion on the financial statements does not cover the otherinformation and we will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the audit or otherwise appears tobe materially misstated.
The other information is expected to be made available to us after thedate of this auditor's report. When we read the other information if we conclude thatthere is a material misstatement therein we are required to communicate the matter tothose charged with governance.
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Company's Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing 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 statements 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.
The Board of Directors are responsible for overseeing the Company'sfinancial reporting process.
AUDITOR'S RESPONSIBILITIES 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 controls.
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 the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's However future events or conditions may causethe 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 financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.
We communicated 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 provided 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 precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso 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 Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the relevant books of account.
e) On the basis of the written representations received from thedirectors as on March 312020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2020 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 internal financialcontrols over financial reporting.
g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as 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 the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us :
i) As informed to us the Company has disclosed the impact of pendinglitigations on its financial 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 has been no amount required to be transferred to theInvestor 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.
TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f) under 'Report on Other Legal andRegulatory Requirements' section of our report to the Members of Praveg Communications(India) Limited (formerly known as Sword and Shield Pharma Limited) 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 Praveg Communications (India) Limited (formerly known as Sword and ShieldPharma Limited) ("the Company") as of March 31 2020 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Board of Directors of the Company is responsible for establishingand maintaining 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 internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.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 was established and maintained and if suchcontrols 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 of therisks of material misstatement of the financial statements whether due 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 controlssystem over financial reporting of the Company.
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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 WITH REFERENCE TO THESE STANDALONE FINANCIAL 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.
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 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members
of Praveg Communications (India) Limited (Formerly Sword and ShieldPharma Limited) of even date)
I. In respect of the Company's fixed assets:
a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
b) The Company has a program of verification to cover all the items offixed assets in our opinion is reasonable having regard to the size of the Company andthe nature of its assets. Pursuant to the program fixed assets were physically verifiedby the management during the year. According to the information and explanations given tous no material discrepancies were noticed on such verification.
c) According to the information and explanations given to us therecords examined by us and based on the examination of the conveyance deeds / registeredsale deed provided to us we report that the title deeds comprising all the immovableproperties of land and buildings which are freehold are in the process to be transferredto be held in the name of the Company as at the balance sheet date. Company has alreadymade application to superintendent of stamp for stamp duty adjudications the saidapplication is under process. In respect of immovable properties of land and building thathave been taken on lease and disclosed as fixed assets in the standalone financialstatements the lease agreements are in the process to be transferred into name of theCompany.
ii. As explained by the management it has conducted physicalverification of inventory at reasonable intervals during the year and no materialdiscrepancies were noticed on such physical verification.
iii. According the information and explanations given to us theCompany has granted unsecured loans to its wholly owned subsidiary Company covered in theregister maintained under section 189 of the Companies Act 2013 in respect of which :
(a) The terms and conditions of the grant of such loans are in ouropinion prima facie not prejudicial to the Company's interest.
(b) The schedule of repayment of principal and payment of interest hasbeen stipulated and repayments or receipts of principal amounts and interest have beenregular as per stipulations
(c) There is no overdue amount in respect of this loan remainingoutstanding as at the year-end.
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 making investments and providing guarantees andsecurities as applicable.
v.The Company has not accepted deposits during the year and does nothave any unclaimed deposits as at March 312020 and therefore the provisions of theclause 3 (v) of the Order are not applicable to the Company.
vi.The maintenance of cost records has not been specified by theCentral Government under section 148(1) of the Companies Act 2013 for the businessactivities carried out by the Company. Accordingly reporting under clause 3(vi) of theorder is not applicable to the Company.
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 Tax Goodsand Service Tax Customs Duty Cess and other material statutory dues as applicable to itwith the appropriate authorities. The provisions relating to excise duty are notapplicable to the Company.
b)There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income Tax Goods and Service Tax Customs Duty Cessand other material statutory dues in arrears as at March 312020 for a period of more thansix months from the date they became payable. The provisions relating to excise duty arenot applicable to the Company.
c)Details of dues of Income Tax Sales Tax Service Tax and ValueAdded Tax which have not been deposited as at March 312020 on account of dispute aregiven below :
viii. In our opinion and according to the information and explanationsgiven by the management the Company has not defaulted in repayment of dues to financialinstitutions banks debenture holders or government accordingly reporting under clause 3(viii) of the Order is not applicable to the Company.
ix. The Company has not raised moneys by way of initial public offer orfurther public offer (including debt instruments) or term loans and accordingly reportingunder clause 3 (ix) of the Order is not applicable to the Company.
x . To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company or 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 accordingly reporting underclause 3 (xii) of the Order is not applicable to the Company.
xiii.In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Section 177 and 188 of the Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the standalone financial statements asrequired 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 paid convertible debenturesand accordingly reporting under clause 3 (xiv) of the Order is not applicable to theCompany.
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 persons connected to its directors and hence provisions of section192 of the Companies Act 2013 are not applicable to the Company.
xvi.According to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.