To the Members of VIKAS ECOTECH LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of VIKAS ECOTECH LIMITED("the Company") which comprise the balance sheet as at 31st March 2019 thestatement of Profitand Loss and the statement of cash flows for the period then endedand notes to the financial statements including a summary ofsignificantaccountingpolicies and other explanatory information Subject to the possibleimpact due to matters reported in other matters para in our opinion and to the best ofour information and according to the explanations given to us the aforesaid standalonefinancial statements give the information required by the Companies Act 2013 ("theAct") in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2019 its profit and its cash flows for the period ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs)specifiedundersection 143(10) of the Companies Act 2013. Our responsibilities under those Standards arefurther described in theAuditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2013 and the Rules there under and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.
KEY AUDIT MATTTERS
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. Wehave determined following matters as key audit matters to be communicated in our report.
|S. No. ||Key Audit Matters ||How audit addressed the key audit matter |
|1 ||Assessment of Impairment Losses || |
| ||The Company has recognized provision for impairment loss related to fixed assets other than Land & Building on account of Non Functional Unit at Sigma Plastic Industries (Jammu) and Vikas Global One Limited (Jammu) equivalent to carrying WDV of Rs. 1225416.50 & 3528915.52 respectively. (Refer Note-5) ||Our procedures have focused on management's process and assumptions in recognition of impairment losses. Our work included and were not limited to the following procedures: |
| || || Understanding the Company's process of recognition of provision for impairment losses. |
| ||The recognition process involves use of estimates and assumptions relating to value in use and expected benefits in future. Accordingly the same has been considered as key audit matter || Testing of assumption used in determination of impairment losses. |
|2 ||Litigation Matters || |
| ||The company has certain significant open lega proceedings under Direct and Indirect tax laws and civil suits refer note 35. ||lOur audit procedures included and were notlimited to the following: |
| || || Assessing management's position through discussions with the in-house legal expert the probability of success in the aforesaid cases and the magnitude of any potential loss. |
| ||-Income Tax Demand Rs. 3144000 related to AY 2003- 04. The appeal has been filed by the company and at present it is pending at ITAT New Delhi || |
| ||-Income Tax Demand Rs. 2360500 related to AY 2008- 09. Letter of Request for rectificationwassubmittedto ations during the year litig The Asst. Commissioner of Income Tax [Circle 26(2)] New Delhi since TDS credit from Lupin Ltd.was not letter from the reflected in 26 AS of relevant year. || Discussion with the management on the developmentinthese ended March 31 2019. |
| || || Obtained representation management on the assessment of these matters |
| ||-Income Tax Demand Rs. 1980580 related to AY 2009- 10. Letter of Request for rectification was submitted to The Asst. Commissioner of Income Tax [Circle 26(2)] New Delhi since TDS credit from Lupin Ltd.was not reflected in 26 AS of relevant year. || |
| ||-Excise demand of Rs. 3124983 related M/s Sigma Plastic Industries pertaining to FY 2014-15. The appeal has been filed by the company and at present it is pending at CESTAT New Delhi. The Company had acquired 100% share in Sigma Plastic Industries which was merged in the Company during financial year 2014- 15. Accordingly pending litigation of Sigma Industries has also become part of pending litigation of the Company. || |
| ||The Company has filed civil suit against ADM Agro Industries Kota and Akola Limited supplier of Soya Bean Oil in Saket Court Delhi (Case No-CS OS No.- 198/214) amounting Rs. 9961516 due to poor supply of soya bean oil. The Company has suffered a loss due to such poor quality of material supplied by them and non-recovery of money from debtors and it also affect goodwill of the Company. ADM Agro Industries Kota and Akola Limited has also filed winding up petition against the Company in High Court (Case No. CO PET N. 64/2014) due to non-payment of Rs. 4115664 along with interest at the rate of 18% from the due date of payment. ADM Agro Industries Kota and Akola Limited has also filed a summary suit for recovery of debts in Tis Hazari Court (Summary Suit No. C S (OS) 3077/2014) || |
| ||Due to complexity involved in these litigation matters management's judgement regarding recognition and measurement of provisions for these legal proceedings is inherently uncertain and might change over time as the outcomes of the legal cases are determined. Accordingly it has been considered as a key audit matter || |
|3 ||Status of Insurance Claims || |
| ||The company has reported exceptional item on account of fire loss of Unit-II of RIICO Industrial Area Shahjahanpur Alwar Rajasthan in the financial statement for the year ended 31.03.2017. In this regard surveyor has submitted final report to Oriental Insurance Co Ltd on 05.11.2018 with an Insurance claim of Rs. 9.34 Crs appox. Now The Divisional Office of Oriental Insurance Company Limited has approved the report submitted by the surveyor without any modifications. Further the Divisional office to Head Office for Disbursal of claim. Management is expectingsettlement of claim during the F.Y 2019-20. Refer note 39 ||Our procedures have focused on management's understanding on this insurance claim. Our work included and were not limited to the following procedures: |
| || || Review of communication held between the company and Insurance Company |
| || || Review of communication held between the company and M/s Protocol Insurance Surveyors& Loss Assessors Pvt. Ltd. (loss assessor and surveyor appointed by insurance company) |
| ||Due to element of uncertainty involved regarding expected time of settlement of claim and amount recoverability it has been considered as key audit matter. || |
| || || |
Information other than the financial statements and auditors' report thereon
The Company's board of directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report Business Responsibility Report but does notinclude the financial statements and our auditor's report thereon.
Our opinion on the financial statementsdoesnotcovertheotherinformationand we do notexpress 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 standalone financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
The Company's BoardofDirectorsisresponsibleforthemattersstatedinsection134(5) of theCompanies Act 2013 ("the Act") with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and accounting principles generally acceptedinIndiaincludingtheaccountingStandardsspecifiedundersection133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements the Board of Directors 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 unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so. The Board of Directors are also responsible foroverseeing the company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or economicaggregatetheycouldreasonablybeexpectedto decisions of users taken on the basis of thesefinancial statements. As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the 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 todesign audit procedures that are appropriate in the circumstances. Under section143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriatenessofaccountingpolicies used and the reasonableness ofaccounting 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation. Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficienciesin internal control that we identify during our audit. We also provide thosecharged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence and whereapplicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Certain liabilities appearing in the financial statements such (Note-19) Advances fromCustomers (Note-21) are subject to party's confirmation and consequential adjustments ifany as the balance confirmations are not received fully yet from the parties.
Certain assets appearing in the financialstatementssuchasAdvancetoSuppliers(Note-14)aresubjecttoconfirmation and consequentialadjustments if any. Trade Receivables balances (Note- 10) are subject to party'sconfirmation and consequential adjustments if any and include unconfirmed balances whichare outstanding for a period exceeding 12 months however considered good. Realizationsfrom debtors including balances that are offset with other party's balances are subject toverification from bank realization certificates.
The valuation of Inventories (Note-9) comprising raw materials & packing materialsemi finished goods stores and spares and finished goods has been done by the managementof the company and Independent Cost Accountant and relied upon by us.
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 ofthe Act we give in the Annexure-"A" a specified in paragraphs 3 and 4 of theOrder.
2. As required by Section 143(3) of the Act we report to the extent applicable 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 relating to preparationof the aforesaid financial statements have been kept so far as it appears from ourexamination of those books. .
c) The company is not having any branch office and hence clause (c) of section 143(3)of the Companies Act 2013 is not applicable.
d) The Balance Sheet the Statement of Profit and Loss dealt with by this Report are inagreement with the relevant books of account maintained for the purpose of preparation ofthe financial statements.
e) In our opinion except as otherwise disclosed the accountingpoliciesandnotestotheaforesaid financial statementscomplywiththeAccountingStandardsspecifiedunder Section 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014
f) On the basis of the written representations received from the directors of theCompany as on 31st March 2019 taken on record by the Board of Directors of the Companynone of the directors of the company is appointed as a director in terms of Section 164(2) of the Act. disqualified
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 Refer Note35 to the financial statements;
ii. The Company did not have any material foreseeable losses on long-term contractsincluding derivative contracts.
iii. There is unclaimed dividend amounting to 161226.00 pertaining to FY 2009-102010-11 & 2011-12 which needs to be transferred to Investor Education Protection Fundof India by the Company however the same has not been transferred yet as on date and itis still under process of transfer. The Company has already passed instructions for suchtransfer however the respective Bank is yet to transfer the same to IEPFI.
ANNEXURE TO THE AUDITOR'S REPORT
The Annexure referred to in our report to the members of VIKAS ECOTECHLIMITED("the Company") for the year ended March 31 2018. We report that:
|Particulars ||Auditor's Remarks |
|(i) (a)whether the company is maintaining proper records showing full particulars quantitative details and situation of fixed assets; ||In the absence of requisite documents and explanation we are unable to comment on this. |
| ||In the absence of requisite documents and explanation we are unable to comment on this. |
|(b) whether these fixedassetshavebeenphysically verifiedby the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so whether the same have been properly dealt with in the books of account; || |
|(c) Whether the title deeds of immovable properties are held in the name of the company. If not provide the details thereof; ||According to information and explanations and on the basis of examination of the records of the company the title deeds of immovable properties held in the name of the Company |
|(ii) whether physical verification of inventory has been conducted at reasonable intervals by the management and whether any material discrepancies were noticedand if so whether they have been properly dealt with in the books of account; ||In our opinion according to information given to us the inventories have been physically verified during the year by the Management at reasonable intervals and as explained to us no material discrepancies were noticed on physical verification. |
|(iii) Whether the company has granted any loans secured or unsecured to companies firms Liability Partnerships or other parties coveredin the register maintained under section ||The company has not granted any loans secured or unsecured firmsLimited Liability to companies Partnerships or other parties covered in the register maintainedunderSection 189 of the Companies Act 2013. If so 189 of the Companies Act 2013. |
|(a) whether the terms and conditions of the grant of such loans are not prejudicial to the company's interest; ||NA. |
|(b) whether the schedule of repayment of principal andpaymentofinteresthasbeen stipula whether the repayments or receipts are regular; ||NA |
|(c) if the amount is overdue state the total amount overdue for more than ninety days and whether reasonable steps have been taken by the company for recovery of the principal and interest; ||NA |
|(iv) In respect of loans investments guarantees and security whether provisions of section185 and 186 of the Companies Act 2013 have been complied with. If not provide the details thereof. ||The company has not given any loan or guarantee or provided any security during the year. |
|(v) in case the company has accepted deposits whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under where applicable have been complied with? If not the nature of such contraventionsbe stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal whether the same has been complied with or not? ||According to the information and explanations given to us the Company has not accepted any deposit within meaning of section 73 to 76 of the and rules framed there under during the year. |
|(vi) Whether maintenance of cost records has been specified by the Central Government under sub- section (1) of section 148 of the CompaniesAct 2013 and whether such accounts and records have been so made and maintained. ||As explained to us the Company has maintained cost records as required as specified Government under sub-section Companies Act 2013. However we have not examined in detail such cost records and solely relied upon the management representation and cost accountant certificate given to us in this regard. |
|(vii) (a) whether the company is regular in depositing undisputed statutory dues including provident fund employees' state insurance income-tax sales-tax service tax duty of customs duty of excise value added tax cess and any other statutory dues to the appropriate authorities andifnot theextentofthe arrears of outstanding statutory dues as on the last day of the financialyear concerned for a period of more than six months from the date they became payable shall be indicated; ||According to the information and explanations given to us and on the basis of our examination of the records of the Company in respect of undisputed statutory dues including Provident Fund Employee's State Insurance Fund Income Tax Sales Tax Service Tax Goods and Service Tax Custom Duty Value Added Tax cess and other material statutory dues have been deposited during the year by the Company with the appropriate authorities but delay in observed in some of the cases. As on year end following are the unpaid statutory dues which are remaining unpaid since very long time: |
| ||1. Central Sales Tax Demand Payable Rs. 1691 |
| ||2. Custom Duty Payable Rs. 10638175** |
| ||3. Ed Cess Payable (Raj) Rs. 1020031 |
| ||4. High Ed Cess Payable (Rajasthan) Rs. 464344 |
| ||5. Custom Duty Payable: Rs. 69648 |
| ||** This amount is payable against goods damaged in fire for which claim has been filed Insurance Company. The amount has been put on hold for payment and shall be paid as and when insurance company settles the insurance claim. |
|(b) where dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not be treated as a dispute). ||For amounts which are not paid on account of disputes for which appeals are pending refer Note 35 to Financial Statements for the year ended 31st March 2019. |
|(viii) Whether the company has defaulted in repayment of loans or borrowing to a financial bank Government or dues to debenture holders? If yes the period and the amount of defaul to be reported (in case of defaults to banks financial lender wise details to be provided). ||In our opinion and according to the information and explanations given to us the Company has not defaulted institution in the repayment of loans or borrowings to financial institutions banks and Government or dues to debenture holders during the year. |
|(ix) Whether moneys raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those are raised. If not the details together with delays or default and subsequent rectification if any as may be applicable be reported; ||During the year the company has not raised any money by way of public offer. The amount raised by way of term loans were applied for the purpose for which those are raised. |
|(x) whether any fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year; If yes the nature and the amount involved is to be indicated; ||Based upon the audit procedures performed and information and explanations we report that no fraud on or by the Company has been noticed or reported during |
|(xi) Whether managerial remuneration has been to us the Company has paid / paidor providedinaccordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act? If not state the amount involved and steps taken by the company for securing refund of the same; ||In our opinion and according to the information and explanations provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act 2013. |
|(xii) whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1: 20 to meet out the liability and whether the Nidhi Company is maintaining ten per cent unencumbered term deposits as specified in the Nidhi Rules 2014 to meet out the liability; ||The Company is not a Nidhi Company and hence reporting under clause (xii) of Paragraph 3 of the Order is not applicable. |
|(xiii) Whether all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act 2013 where applicable and the details have been disclosed in the Financial Statements etc. as required by the applicable accounting standards; disclosed in the financial statements etc. ||In our opinion and according to the information and explanations given to us the Company's transactions with its related party areincompliancewithSections177 and 188 of the Companies Act 2013 where applicable and details of related party transactions have been as required by the applicable accounting |
|(xiv) Whether the company has made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and if so as to whether the requirement of section 42 of the Companies Act 2013 have been complied with and the amount raised have been used for the purposes for which the funds were raised. If not provide the details in respect of the amount involved and nature of non-compliance; ||During the year under review the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence this clause is not applicable. |
|(xv) whether the company has entered into any non-cash transactions with directors or persons connected with him and if so whether the provisions of section have been complied with; ||The company has not entered into any non-cash transactions with directors or persons connected with him hence the provisions of section 192 of Companies Act 2013 are not applicable |
|(xvi) Whether the company is required to be registered under section 45-IA of the Reserve Bank of India Act 1934 and if so whether the registration been obtained. ||In our opinion and according to information and explanations provided to us the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. |
Annexure "B" to the Independent Auditors Report on the FinancialStatements of VIKAS ECOTECH LIMITED (Referred to in paragraph 2 (f) underReport on Other Legal and Regulatory Requirements' of our report of even date)
REPORT ON THE INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING UNDER CLAUSE (i) OFSUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013 ("THE ACT")
We have audited the internal financial controls over financial reporting of VIKASECOTECH LIMITED ("the Company") as of March 31 2019 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
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 Reporting bythe Institute of Chartered Accountants of India". These responsibilities include thedesign implementation and maintenance of adequate internal financial 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 my/our audit conducted in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standards on Auditing to the extent applicable to anaudit of internal financial controls both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate Internal Financial Controls over Financial Reporting were 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 judgement 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 sufficient 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 internalfinancialcontrol over financial reportingis a process designed toprovide reasonable regarding the reliability of financial reporting and the preparation offinancial in accordance with generally accepted accounting principles. A company'sinternal financial reporting includes those policies and procedures that (1) pertain tothe maintenance of records that in reasonable detail accurately and fairly reflect thetransactionsand dispositions of the assets of the company; (2) provide reasonableassurance that transactionsare recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of couldhave a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financialcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of theinternal financial periods are subject to the risk that the internal financial because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
Except for the possible impact due to matter reported in other matters para in ouropinion to the best of our information and according to the explanations given to us theCompany has in all material respects an adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting wereoperating as at March 31 2019 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the ICAI.
With reference to stock and inventory the company needs to make its inventorymanagement system including physical ective and robust. Further the company also needs toimprove its process for conduct eff stocktakingprocessmore of physical verification offixed assets in phased manner at regular intervals and also process for obtaining balancesconfirmations from suppliers or customers at regular interval. The company is still underprocess of implementation of ERP and as on date only manual controls exists in company'scontrol system.
| ||For KSMC & ASSOCIATES |
| ||Chartered Accountants |
| ||FRN: 003565N |
| ||Sd/- |
| ||(CA SACHIN SINGHAL) |
| ||Partner |
| ||M. No.:505732 |
|Place: New Delhi || |
|Date: 30.05.2019 || |