To the Members of
Proseed India Limited
Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Proseed India Limited("the Company") which comprise the Balance Sheet as at 31st March 2019 andthe Statement of Profit and Loss including the statement of Other Comprehensive Incomethe Cash Flow Statement and the Statement of Changes in Equity for the year then endedand notes to the financial statements including a summary of the significant accountingpolicies and other explanatory information.
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 and fairview in conformity with the accounting principles generally accepted in India includingthe state of affairs ( financial position) of the Company as at 31st March 2019 and itsloss ( financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (Sas) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the Code of Ethics'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 audit opinion on the Standalone Ind AS 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 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.Except for the matter described in the Material Uncertainty Related to Going Concernsection no other KAM needs to be addressed in our report.
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 Standalone Financial Statements
Proceed India Limited is under Corporate Insolvency Resolution Process under Insolvencyand Bankruptcy Code ( "the code"). An application being led by an operationalcreditor and the process of the code is under the initial stage of hearings.
The Company's Board of Directors are responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the state of affairs (financial position) Profit or 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 safeguardingthe 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 the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the standalone financial statements 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 management either intends to liquidate the Company or to ceaseoperations 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 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 system in place and the operating effectiveness ofsuch 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa 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.
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 Ind AS financialstatements for the financial year ended March 31 2019 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we givein"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
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 including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the Indian AccountingStandards Specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended.
e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 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 refer to ourseparate Report in "Annexure B".
g) 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 financial statements;
ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which are required to be transferred to the InvestorEducation and Protection Fund by the Company.
For Navitha And Associates
ICAI Firm Registration Number: 012026S
Membership Number: 221085
ANNEXURE "A" TO THE AUDITOR'S REPORT
Referred to in paragraph 1 under the head "Report on other legal & regulatoryrequirements" of our report of even date.
i) a. The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
b. All the property plant and equipment have been physically veri ed by the managementduring the year according to the information and explanations given to us no materialdiscrepancies were noticed on such veri cation.
c. As per the documents veri ed by us and explanation given to us the Title Deeds ofimmovable properties are held in the name of the company.
ii). The inventory has been physically veri ed during the year by the management. Inour opinion the frequency of veri cation is reasonable. No material discrepancies havebeen noticed on physical veri cation of stocks as compared to book records.
iii). According to the information and explanations given to us the company has notgranted any loans secured or unsecured to companies rms Limited Liability Partnershipor other parties who are covered in the register maintained under section 189 of CompaniesAct 2013 accordingly paragraph3 (iii) (a)(b) and (c) of the order are not applicable tothe company.
iv) According to the information and explanations given to us the Company has notgranted any loans guarantees and security and made investments as per section 185 &186 of the Companies Act 2013.
v) According to the information and explanations given to us the Company has notaccepted any deposits from the public as per the directives issued by the Reserve Bank ofIndia and as per the provisions of section 73 to 76 or any other relevant provisions ofthe Companies Act 2013 and the rules framed there under.
vi) The Company has maintained cost records as speci ed by the Central Government undersection 148(1) of the Companies Act 2013.
vii) a. According to the information & explanations given to us none of theundisputed statutory dues including Provident Fund Employees State Insurance Income TaxSales Tax Service Tax Custom Duty Excise Duty Value Added Tax Goods & ServiceTax Cess and any other Statutory Dues were outstanding as at last day of the financialyear concerned for a period of more than six months.
b. According to the information & explanations given to us there is no dues inrespect of disputed amount to be deposited in respect of Sales Tax Service Tax CustomDuty Excise Duty Value Added Tax as on 31st March 2019 except as stated below:
|Name of the Statute ||Nature of dues ||Period to which the amount relates ||Amount (Rs) ||Forum where the dispute is pending |
|Income Tax Act 1961 ||Income Tax ||AY 2010-11 ||14753800 ||Income Tax Appellate Tribunal |
viii) According to the information and explanations given to us the company hasdefaulted in repayment of loans or borrowing to the financial institutions banks or duesto directors.
ix) In our opinion and according to the information and explanations given to us thecompany has raised money by way of term loans and has applied for the purpose for which itwas raised company has not raised money by way of initial public offer or further publicoffer (including debt instruments) during the year.
x) According to the information and explanations given to us no fraud by the Companyor any fraud on the company by its of cers/employees has been noticed or reported duringthe course of our audit.
xi) According to the information and explanations given to us the Company has paid andprovided managerial remuneration during the year as per the provisions of Section 197 readwith Schedule V to the Companies Act.
xii) In our opinion the Company is not a Nidhi Company. Accordingly Clause (xii) ofParagraph 3 of the Order is not applicable.
xiii) According to the information and explanations given to us all transactions withthe related party are in compliance with section 177 & 188 of Companies Act 2013 andthe same has been disclosed in financial statements as required by the AccountingStandards.
xiv) According to the information and explanations given to us the company has notmade preferential allotment of shares and convertible share warrants on private placementbasis during the year. Accordingly paragraph 3 (xiv) of the Order is not applicable tothe 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.Accordingly paragraph 3 (xv) of the Order is not applicable to the company.
xvi) According to the information and explanations given to us company is not requiredto be registered under section 45-IA of Reserve Bank of India Act 1934.
For Navitha And Associates
ICAI Firm Registration Number: 012026S
Membership Number: 221085
Annexure "B" to the Independent Auditor's Report of even date on theFinancial Statements of Proseed India Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ProseedIndia Limited ("the Company") as of March 31 2019 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 an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal financial controls over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial controls Over Financial Reportingissued by the Institute of Chartered Accountants of India". These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing 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 judgment 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 suf cient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly re ect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
For Navitha And Associates
ICAI Firm Registration Number: 012026S
Membership Number: 221085