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Proseed India Ltd.

BSE: 590057 Sector: Others
NSE: PROINDIA ISIN Code: INE217G01035
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OPEN 73.55
PREVIOUS CLOSE 70.05
VOLUME 5751
52-Week high 74.10
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Mkt Cap.(Rs cr) 758
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OPEN 73.55
CLOSE 70.05
VOLUME 5751
52-Week high 74.10
52-Week low 0.27
P/E
Mkt Cap.(Rs cr) 758
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Proseed India Ltd. (PROINDIA) - Auditors Report

Company auditors report

To the Members of

PROSEED INDIA LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone Ind AS financial statements of Proseed India Limited("the Company") which comprise the Balance Sheet as at 31st March 2020 theStatement of Profit and Loss Statement of Changes in Equity and Statement of Cash Flowsfor the year then ended and a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as "the financial statements").

The National Company Law Tribunal ("NCLT") Hyderabad Bench vide Order datedJuly 10 2019 ("Insolvency Commencement Order") had allowed Corporate InsolvencyResolution Process ("CIRP") against Proseed India Limited based on petitionfiled by the Operational Creditor under Section 9 of the Insolvency and Bankruptcy Code2016 ("the Code"). Mr. Sreenivasa Rao Ravinuthala has been appointed asResolution professional by the Hon'ble NCLT vide its Order dated October 15 2019 tomanage affairs of the Company. Thereafter pursuant to the Insolvency Commencement Orderthe powers of the Board of Directors are stand suspended during the year under review andthe same are exercised by Resolution Professional. In our opinion and to the best of ourinformation and according to the explanations given to us the aforesaid financialstatements give the information required by the Companies Act 2013 (the "Act")in the manner so required and give a true and fair view in conformity with IndianAccounting Standards prescribed under section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended ("Ind AS") and otheraccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2020 loss total comprehensive income changes in equity and cash flowsfor the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the financial statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India ("ICAI") 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 ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the financial statements.

Material Uncertainty Related to Going Concern

We draw attention to the fact that the company's operations have been suspended sincebeginning of the year under review and the company has incurred a net loss of Rs. 31.55lakhs during the year ended 31st March 2020 and as of that date the company's currentliabilities exceeded its current assets by Rs.1791.44 lakhs. We draw the attention furtherto the current status of the Corporate Insolvency Resolution Process which was initiatedagainst the Company on July 10 2019 and these factors cast a significant uncertainty onthe Company's ability to continue as a going concern and therefore the company may beunable to realise its assets and discharge its liabilities in the normal course ofbusiness. Pending the resolution of the above uncertainties the Company has prepared theaforesaid statement on a going concern basis.

Accordingly we are unable to comment on the consequential impact if any on theaccompanying standalone financial statement.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsigni cance 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.

Information Other than the Financial Statements and Audit Report Thereon

In the ongoing Corporate Insolvency Resolution Process (CIRP) The ResolutionProfessional (RP) is responsible for the preparation of the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report and Shareholder's Information butdoes not include the standalone financial statements and our auditor's report thereon.These reports are expected to be made available to us after the date of this auditor'sreport.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance and conclusion thereon. In connection with ouraudit of the standalone financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

In the view of ongoing Corporate Insolvency Resolution Process (CIRP) The ResolutionProfessional (RP) is responsible for the matters stated in section 134(5) of the Act withrespect to the preparation of these financial statements that give a true and fair view ofthe financial position financial performance total comprehensive income changes inequity and cash flows of the Company in accordance with the Ind AS and other accountingprinciples generally accepted in India. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities selection and application of appropriate accounting policies makingjudgments and estimates that are reasonable and prudent and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring 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 thefinancial statements the management is responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless the management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.

The respective Board of Directors/ Management under the direction of the Resolution

Professional are responsible for overseeing the Company's financial reporting 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 in uence the economic decisions of userstaken on the basis of these Standalone Ind AS financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalscepticism 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 suf cient 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 to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct 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 reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast signi cant 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 Ind ASfinancial 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 signi cant audit ndings including any signicant de ciencies 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 signi cance in the audit of the Standalone Ind AS financialstatements for the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure A" a statement on the matters speci ed in paragraphs 3 and 4of the Order.

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 Speci ed 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 March31 2020 taken on record by the Resolution Professional none of the director isdisqualified as on March 31 2020 from being appointed as director in terms of section164(2) of the Act. However in the view of corporate resolution process ("CIRP")from July 10 2019 the powers of Board of Directors stand suspended as per section 17 ofthe code and such powers are exercised by the Resolution Professional during the year.

f) The Company has not appointed qualified Company Secretary as Compliance officerduring the year under review in violation of Regulation 6 of SEBI (LODR) Regulations 2015and Section 203 of the Companies Act 2013.

g) 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".

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 financial statements by way of disclosure in note no. 1 (f) to thefinancial 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
Chartered Accountants
ICAI Firm Registration Number: 012026S
Sd/-
Navitha.K
Place : Hyderabad Proprietor
Date : 27-07-2020 M. No: 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) According to the information and explanations given to us in respect of the classof industry the company falls under the Central Government has not prescribed themaintenance of cost records under Section 148(1) of the Act. Therefore paragraph 3(vi) ofthe Order is not applicable to the Company.

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 and Value Added Tax as on 31st March 2020 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
Income Tax Act 1961 Income Tax AY 2012-13 104767640 Circle 16(2) Hyderabad
*
Income Tax Act 1961 Income Tax AY 2013-14 103366340 Circle 16(2) Hyderabad
*
Sales tax Mumbai Sales Tax FY 2011-12 672066 --

* The Income-Tax Department has re-opened the assessments of the Company for the years2012-13 2013-14 during the moratorium period under CRIP and determined the taxliability ex-parte and issued notice of demand under Section 156 of the Income-tax Act1961. The moratorium declared by the Adjudicating Authority prohibits such orders underSection 14 (1)(a) of the IBC 2016. The above claims were not admitted by the ResolutionProfessional in the Information Memorandum (IM) issued while inviting Resolution plansfrom the prospective Applicants.

viii) According to the information and explanations given to us the company hasdefaulted in repayment of loans to the banks and to promoters. These dues are subjectmatter of insolvency proceedings the Company is undergoing under IBC 2016. Pursuant tothe approval of the order by the Hon'ble NCLT and as per the terms of the Resolution Planoutstanding loans will be settled partially and balance will be waived off. The Companyhas not taken any loans or borrowings from the government or has not issued anydebentures.

ix) According to the information and explanations given to us and based on the auditprocedures performed and the representations obtained from the management we report thatno fraud by the company or on the Company by its officers or employees having a materialmisstatement on the financial statements has been noticed or reported during the periodunder audit.

x) According to the information and explanations given to us and based on verificationof records the managerial remuneration has been paid in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V of the CompaniesAct 2013.

xi) In our opinion the Company is not a Nidhi Company. Accordingly Clause (xii) ofParagraph 3 of the Order is not applicable.

xii) 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.

xiii) 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.

xiv) 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.

xv) 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
Chartered Accountants
ICAI Firm Registration Number: 012026S
Sd/-
Navitha.K
Place : Hyderabad Proprietor
Date : 27-07-2020 M.No: 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 2020 in conjunction with our auditof the financial statements of the Company for the year ended on that date.

Opinion

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 2020 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 ef cient 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.

Auditors' Responsibility

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
Chartered Accountants
ICAI Firm Registration Number: 012026S
Sd/-
Navitha.K
Place : Hyderabad Proprietor
Date : 27-07-2020 M.No: 221085

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