To the Members of Sangam (India) Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements ofSangam (India) Limited ("the Company") which comprise the Balance Sheet as at31st March 2021 the Statement of Profit and Loss (including OtherComprehensive Income) Statement of Changes in Equity and Statement of Cash Flow for theyear then ended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas "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 accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31stMarch 2021 and its profit including other comprehensive income changes in equity andits cash outflow for the year ended on that date.
Basis for opinion
We conducted our audit in accordance with the Standards on Auditingspecified under section 143(10) of the Act. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the standalonefinancial statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia ('ICAI') together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the Standalone Financial Statementsfor the financial year ended March 312021. These matters were addressed in the context ofour audit of the Standalone Financial Statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters. For each matter belowour description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditors' responsibilities for the audit of the Standalone FinancialStatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the Standalone Financial Statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying Standalone Financial Statements.
|The key audit matters ||How our audit addressed the key audit matter |
|1. Investment in wholly owned subsidiary company - Impairment of investment || |
|The Company carries its investment in the wholly owned subsidiary company at cost at an aggregate amount of Rs. 5 Lakhs. ||Our audit procedures include: |
|Being strategic investment and net worth of the subsidiary company is fully eroded the determination of impairment charge required the application of significant judgments by management in particular with respect to determination of recoverable / fair value amount of these investments which in aggregate is significant to the consolidated financial statements. || Comparing the carrying amount of investments with audited financial statements of Investee Company to identify whether their net assets being an approximation of their minimum recoverable amount were in excess of their carrying amount. |
| || Obtaining and reviewing recoverable amounts as determined by the management for each investment. |
|The Board of Directors of the Company (SIL) and wholly owned subsidiary company (SLVL) has approved the Scheme of Amalgamation of SLVL with SIL on dated 14th September 2020 and 12th September 2020 respectively appointed date being 1st April 2020. Refer Note 44 of the financial statements. || |
| || Obtaining and reviewing Scheme of Amalgamation of both companies and review of its accounting impacts. |
| || Reviewed the disclosures made by the Company in the financial statements in this regard. |
|2. Uncertainty about Covid 19 pandemic impact on financial position of the company || |
|The Company has made detailed assessment of its liquidity position for the next year and the recoverability and carrying value of its assets comprising property plant and equipment intangible assets right of use assets investments inventory and trade receivables. ||Principal audit procedures performed: |
|Based on current indicators of future economic conditions the Company expects to recover the carrying amount of these assets. It has also assessed the probability of occurrence of forecasted transactions under the hedging relationships and continues to evaluate them as highly probable considering the orders in hand. || |
| || We understood and tested the design and operating effectiveness of controls as established by the management in determination of recoverability and carrying value of its assets comprising property plant and equipment intangible assets right of use assets investments inventory and trade receivables. |
| || We have considered the basis of management judgement in determining impact on the financial statements of any subsequent events related to Covid-19 pandemic taking into consideration the date of the financial statements the facts and circumstances pertaining to the entity and the conditions that existed at or arose after that date. |
| ||As the impacts of the Coivd-19 outbreak continue to evolve including regulatory restrictions/conditions capturing events that relates specifically to conditions that existed at the date of the financial statements or after the date of the financial statements we have considered all subsequent events and transactions to substantiate our conclusions on the appropriateness of management's assessment of Covid-19 impact. |
|The Company closely monitors the recent developments and effect of present pandemic over the business. || |
|The company believes that this pandemic is not likely to have material impact on the carrying value of its assets and hence no provision for any Impairment is required. || |
|As the situation unfolds in the future the eventual impact may be different from the estimates made as on the date of approval of these Financial Statements. || |
| || We have carried out a detailed analysis of data and performed additional analytical procedures for validating the management's assessment of the impact due to Covid-19 related uncertainties. |
Information other than the financial statements and Auditor's reportthereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in theCompany's annual report but does not include the standalone financial statements andour auditor's report thereon. Our opinion on the standalone financial statements doesnot cover the other information and we do not express any form of assurance conclusionthereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.
Responsibilities of Management and Those Charged with Governance forthe standalone Financial statements
The Company's Management and Board of Directors are responsiblefor the matters stated in section 134(5) of the Act with respect to the preparation ofthese standalone financial statements that give a true and fair view of the state ofaffairs profit / loss (including other comprehensive income) changes in equity and cashflow of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified under section 133 ofthe Act. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements Management and Boardof Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless the Board of Directors either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso. The Company's Management and Board of Directors is also responsible foroverseeing the Company's financial 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 Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesestandalone financial statements.
As part of an audit in accordance with Standards on Auditing weexercise professional judgment and maintain professional scepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
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) ofthe Companies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness 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 concernbasis 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 report. However future events or conditionsmay cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Companies Act 2013 we give in the "Annexure A"a statement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.
2. As required by Section 143(3) of the Act we report 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 havebeen kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the Statement of Changes in Equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statementscomply with the Indian Accounting Standards specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2015 as amended.
(e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directorsnone of the directors is disqualified as on 31st March 2021 from beingappointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company with reference to these Standalone FinancialStatements and the operating effectiveness of such controls refer to our separate Reportin "Annexure B" to this report.
(g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:
(i) The Company has disclosed impact of pending litigations under noteno. 38 of standalone financial statements.
(ii) The Company has made provision as at 31st March 2021as required under the applicable Law or Accounting Standards for foreseeable losses onlong term contracts including derivatives contracts.
(iii) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
3. With respect to the matter to be included in the Auditors'Report under section 197(16):
In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.
ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT ON THESTANDALONE FINANCIAL STATEMENTS OF SANGAM (INDIA) LIMITED
(Referred to in Paragraph 1 under the "Report on Other Legal andRegulatory Requirements" section of our report of even date)
(i) In respect of its fixed assets:
a) The Company has maintained proper records showing full Particularsincluding quantitative details and situation of fixed assets on the basis of availableinformation.
b) As explained to us all the fixed assets have been physicallyverified by the management in a phased periodical manner which in our opinion isreasonable having regard to the size of the Company and nature of its assets. No materialdiscrepancies were noticed on such physical verification.
c) According to the information and explanation given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
(ii) In respect of inventories:
In our opinion during the year the inventories have been physicallyverified by the management at reasonable intervals and according to explanation given tous no material discrepancies were noticed during the year on such verification.
(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms or otherparties covered in the register maintained under Section 189 of the Companies Act 2013and hence clause iii (a)iii (b) and iii(c) of the Order not applicable to the Company.
(iv) In our opinion and according to the information and explanationsgiven to us in respect of loans investments guarantees and security the provisions ofsections 185 and 186 of the Act have been complied with.
(v) According to the information and explanations given to us theCompany has not accepted any deposit from the public. Therefore the provisions of Clause(v) of para- graph 3 of the Order are not applicable to the Company.
(vi) In our opinion the maintenance of cost records has been specifiedby the Central Government sub section (1) of section 148 of the Act and such accounts andrecords have been so made and maintained by the company. We have however not made adetailed examination of the records with a view to determining whether they are accurateor complete.
(vii) In respect of statutory dues:
a) According to the records of the Company undis- puted statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax ServiceTax Goods and Service Tax Duty of Customs Duty of Excise Value Added Tax Cess andother material statutory dues have been generally regularly deposited with the appropriateauthorities. According to the information and explanations given to us no undisputedamounts payable in respect of the aforesaid dues were outstanding as at 31stMarch 2021 for a period of more than six months from the date of becoming payable.
b) There are no dues of Income Tax Sales Tax Wealth Tax and ServiceTax duty of Customs Duty of Excise Value Added Tax and Cess which have not beendeposited as on 31st March 2021 on account of any dispute except in respectof the following:
|S r. Name of the statute No. ||Nature of dues ||Amount of disputed demand (Rs.In Lakhs) ||period to which the amount relate (F.Y.) ||Forum where dispute is pending |
| || ||Gross ||Net of Deposited || || |
|1 Central Excise Act 1944 ||Excise Duty and Penalty ||11 ||10 ||2015-16 ||Commissioner of Excise and Service tax (Appeals) Jodhpur |
|2 Finance Act 1994 ||Service tax and Penalty ||444 ||420 ||2010-11 to 2014-15 ||CESTAT New Delhi |
|3 Rajasthan Value Added Tax Act 2003 ||Value Added Tax ||250 ||234 ||2012-13 ||Tax Board Ajmer |
| ||Value Added Tax with RIPS Incentive on Exports ||7 ||7 ||2010-11 to 2012-13 ||Tax Board Ajmer |
|4 The Rajasthan Tax on Entry of Goods into Local Areas Act 1999 ||Penalty and Interest ||47 ||47 ||2014-15 to 2015-16 ||Rajasthan High Court Jodhpur |
|5 Rajasthan Stamp Duty Act 1998 ||Stamp Duty ||109 ||89 ||2006-07 ||Rajasthan High Court Jodhpur |
|6 Electricity Act 2003 ||Fixed Charges Recovery ||66 ||42 ||2009-10 to 2010-11 ||APTEL New Delhi |
(viii) Based on our audit procedures and the information andexplanations provided by the management we are of the opinion that the company has notdefaulted in repayment of loans or borrowing to financial institutions banks andGovernment. The Company does not have any debenture holders.
(ix) In our opinion and according to the information and explanationsgiven to us the term loans raised during the year have been applied for the purpose forwhich those loans were raised. The company has not raised money by way of initial publicoffer or further public offer including debt instruments.
(x) In our opinion and according to the information and explanationsgiven to us no fraud by the Company or on the Company by the officers and employees ofthe Company has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanationsgiven to us the managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct.
(xii) The Company is not a Nidhi Company and hence reporting underclause (xii) of paragraph 3 of the Order is not applicable.
(xiii) In our opinion and according to the information and explanationsgiven to us the Company's transactions with its related parties are in compliancewith Sections 177 and 188 of the Act where applicable and details of related partytransactions have been disclosed in the standalone financial statements etc. as requiredby the applicable accounting standards.
(xiv) In our opinion and according to the information and explanationsgiven to us the Company has made private placements of fully paid up equity shares duringthe year and the requirements of Section 42 of the Act have been complied with and theamount raised have been used for the purposes for which the funds were raised.
(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 with him and hence reporting under clause (xv) ofparagraph 3 of the Order is not applicable to the Company.
(xvi) In our opinion and according to the information and explanationsgiven to us the Company is not required to register under section 45-1A of the ReserveBank of India Act 1934.
ANNEXURE "B" to the independent auditors' report on thestandalone FINANCIAL STATEMENTS of SANGAM (INDIA) LIMITED
(Referred to in paragraph 2 (f) under Report on other Legal andRegulatory Requirements' of our report of even date)
Report on the Internal Financial Controls over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financialreporting of Sangam (India) Limited ("the Company") as of 31st March2021 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting with reference to these StandaloneFinancial Statements based on our audit. We conducted our audit in accordance with theGuidance Note 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 with reference to these Standalone FinancialStatements was established and maintained and if such controls operated effectively in allmaterial respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting withreference to these Standalone Financial Statements and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting with reference tothese Standalone Financial Statements assessing the risk that a material weakness existsand testing and evaluating the design and operating effectiveness of internal controlbased on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material is statement of thestandalone 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 Company's internalfinancial controls system over financial reporting with reference to these StandaloneFinancial Statements.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reportingwith reference to these Standalone Financial Statements is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparationof standalone financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting with reference to these Standalone Financial Statements includes those policiesand procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of theCompany are being made only in accordance with authorizations of management and directorsof the Company; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the Company's assetsthat could have a material effect on the standalone 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 with reference to these Standalone Financial Statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these Standalone Financial Statements to future periods are subject to the risk thatthe internal financial control over financial reporting with reference to these StandaloneFinancial Statements may become inadequate because of changes in conditions or that thedegree 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 with reference to these StandaloneFinancial Statements and such internal financial controls over financial reporting wereoperating effectively as at 31st March 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
|For Rajendra & Co. ||for o. R Dad & co. |
|Chartered Accountants || |
|Firm Registration No. 108355W ||Firm Registration No. 002330C |
|Akshay R. shah ||o. R. Dad |
|Partner || |
|Membership No.103316 ||Membership No. 035373 |
|Place : Mumbai ||Place : Bhilwara |
|UDIN: 21103316AAAAFY8599 ||UDIN: 21035373MMCD4203 |
|Date: 05th May 2021 ||Date: 05th May 2021 |