To the Members of Precot Meridian Limited
Report on the Audit of Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of PrecotMeridian Limited ("the Company") which comprise the Balance Sheet as at March312019 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "Standalone Ind AS 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 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards prescribed under section 133 of the Act readwith the Companies (Indian Accounting Standards) Rules 2015 as amended ( "IndAS") of the state of affairs (financial position) of the Company as at March 312019 and loss (financial performance including other comprehensive income) its cashflows and changes in equity 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 Companies Act 2013. Our responsibilities under thosestandards are further described in the Auditor's Responsibilities for the audit of theStandalone Ind AS financial statements section of our report. We are independent of thecompany in accordance with the code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the Standalone Ind AS financial statements under the provisions of the CompaniesAct2013 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 that we have obtained is sufficient and appropriate to provide abasis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the financial statements of the current period. 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. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
|Key Audit Matter ||How our audit addressed the Key Audit Matter |
|Provisions for pending legal cases - ||Assessing the adequacy of provisions by discussing with the management and reviewing correspondence with the respective authorities; |
|As at 31st March 2019 the company has a provision of '1769.96 lakhs (PY - ' 1806.82 lakhs) as against various outstanding litigations of र 3 115.25 lakhs (PY - ' 3365.00 lakhs). ||Relying on judicial pronouncements; |
|These provisions are estimated using a significant degree of management judgement. ||Obtaining opinion/views from the company's external legal advisors regarding the likely outcome magnitude and exposure to the relevant litigation and claims. |
| || |
|Carrying Value of Property Plant and Equipment-The carrying value of Property Plant and Equipment as at 31.03.2019 was '48723.36 Lakhs and the related depreciation charge for the year was '3109.56 lakhs. The carrying value and depreciation rates are reviewed annually by management with reference to usage obsolescence and relevant technical factors. This involves a significant degree of management judgement. ||Assessing the reasonableness of the management's assertions and estimates regarding estimated useful lives and residual values based on historical experience |
| ||Discussing indicators of possible impairment with the management |
| ||Analysing the assumptions and critical judgements based on historical data. |
Information other than the Financial statements and Auditor's report thereon
The company's Board of Directors is responsible for the other information. The otherinformation obtained at the date of this auditor's report is information included in theDirector's Report and Management Analysis including its Annexures but does not include theStandalone Ind AS financial statements and our auditor's report thereon.
Our opinion on the Standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
If based on the work we have performed on the other information obtained prior to thedate of this auditor's report we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.
Responsibility of Management for Standalone Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Ind AS financial statements that give a true and fair view of the (stateof affairs) financial position loss (financial performance including other comprehensiveincome) cash flows and changes in equity 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 and ensuring their operatingeffectiveness and the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.
In preparing the Standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibility for the audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Ind AS 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 Standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
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 made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe
Standalone Ind AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of the Standalone IndAS financial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
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 also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships 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 standalone financial statementsof the current period and are therefore the key audit matters.
We describe 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.
The comparative figures and financial information of the Company for the year ended 31stMarch 2018 included in these Standalone Ind AS Financial Statements are based on thepreviously issued statutory financial statements prepared in accordance with the Companies(Indian Accounting Standards) Rules 2015 audited by the predecessor auditor whose reportfor the year ended 31st March 2018 dated 21st May 2018 expressed anunmodified opinion.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies(Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section(11) of Section 143 ofthe Act we give in "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
(2) 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 Cash Flow Statement and theStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account;
d. In our opinion the aforesaid Standalone Ind AS financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with relevantrules issued thereunder;
e. On the basis of written representations received from the directors as on April12018 and taken on record by the Board of Directors none of the directors isdisqualified as on March 312019 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 over financialreporting of the Company and the operating effectiveness of such controls we give ourseparate Report in "Annexure 2".
g. With respect to the other matters to be included in the Auditor's Report inaccordance 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 the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
h. With respect to the other matters to be included in the Auditor's 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 on its financialposition in its Standalone Ind AS financial statements - Refer Note 41 on ContingentLiabilities to the Standalone Ind AS financial statements;
(ii) The Company has made provision as required under the applicable law or accountingstandards for material
foreseeable losses if any on long-term contracts including derivative contracts -Refer Note 17 & Note 22 to the standalone I nd AS financial statements;
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company
| ||For VKS Aiyer& Co. |
| ||Chartered Accountants |
| ||ICAI Firm Registration No. 000066S |
| || |
| ||V S Srinivasan |
|Place: Coimbatore ||Partner |
|Date: 22nd May 2019 ||Membership No. 13729 |