THE MEMBERS OF VIPUL LIMITED
Report on the Audit of the Standalone Ind AS Financial Statements
1. We have audited the accompanying financial statements ofstandalone Ind AS VIPULLIMITED ("the Company") which comprise the Balance Sheet as at 31st March2019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Cash Flows and the Statement of Changes in Equity for the year then ended onthat date including a summaryofsignificantaccounting policies and other explanatoryinformation (herein after referred to as "Standalone Ind AS FinancialStatements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of theCompanyasatMarch312019itsprofit(including OtherComprehensive Income) Changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
2. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of the IndAS Financial 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 together with the ethical requirements that are relevant to our audit of the Ind ASfinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matters
3. We draw your attention to the following matters included in the Notes to theStandalone Financial Statements:
i. Note 45 which relates to various claims and counter claims are pending beforeArbitration Tribunal.
ii. Note 43 (i) which relates to certain Loans and Advances and Trade Receivable whichare subject to confirmation.
Key Audit Matters
4. Key Audit Matters are those matters that in our professional significancein ourjudgment were of most audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matter ||Auditor's Response |
|1 Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) ||Principal Audit Procedures |
| ||We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. |
| ||Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: |
| ||Evaluated the design of internal controls relating to implementation of the new revenue accounting standard. |
|The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognised over a period. ||Selected a sample of continuing and new contracts and performed the following procedures: |
| ||1. Read analysed and identified the distinct performance obligations in these contracts. |
| ||2. Compared these performance obligations with that identified and recorded by the Company. |
|Additionally new revenue accounting standard contains disclosures which involves collection of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. ||3. Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration. |
| ||4. Samples in respect of revenue recorded for material contracts were tested using a combination of customer acceptances subsequent invoicing and historical trend of collections and disputes. |
| ||In respect of samples relating to fixed price contracts progress towards satisfaction of performance obligation used to compute recorded revenue was verified with actual and estimated efforts. |
| ||Performed analytical procedures for reasonableness of revenues disclosed. |
|2 Contingent Liabilities ||Principal Audit Procedures |
|The company has several on-going legal matters relating to statutory taxes which require management judgement to be applied in order to determine the likely outcome. ||In assessing the potential exposures to the Company we have completed a range of procedures including: |
| || assessing the design and implementation of controls in relation to the monitoring of known exposures; |
| || reading Board and other meeting minutes to identify areas subject to Company consideration; |
| || meeting with the Company's internal legal advisors in understanding on-going and potential legal matters impacting the Company; |
| || reviewing third party correspondence and reports; and |
| || reviewing the proposed accounting and disclosure of actual and potential legal liabilities drawing on third party assessment of open matters. |
5. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and Analysis;Board's Report including Annexures to Board Report Business Responsibility ReportCorporate Governance and Shareholders' Information but does not include the standalonefinancial statements and our auditor's report thereon. The aforesaid documents areexpected to be made available to us after the date of this auditor's report.
6. Our opinion on the standalone Ind AS financialstatements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
7. In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
8. When we read the aforesaid documents if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance.
Management's Responsibility for the Standalone Ind AS Financial Statements
9. The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financialperformance changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 Ind AS financialstatementthat give a true and fair view and are free from material misstatement whether due tofraud or error.
10. In preparing the Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
11. The Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibility for the Audit of the Ind AS Financial Statements
12. Our objectives are to obtain reasonable assurance about whether the 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 influencethe economic decisions of userstaken on the basis of these Ind AS financial statements. 13. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Ind AS 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.
Obtained 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 Companies Act 2013 we are also responsible for expressing our opinion onwhether the company has adequate internal financialcontrols system in place and theoperating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may doubt on the Company's ability to continueas a going concern. If we conclude that a material castsignificant uncertainty exists weare required to draw attention in our auditor's report to the related disclosures in theInd AS 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 Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
14. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the findings including any significant deficiencies ininternal control and that we identify during our audit. 15. We also provide those chargedwith governance with a statement that we have complied with relevant ethical requirementsregarding independence and to communicate with them all relationships and other mattersthat may reasonably be thought to bear on our independence and where applicable relatedsafeguards.
16. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matters or when we determine that a matter shouldnot be communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefitsof such communication.
17. Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.
Report on Other Legal and Regulatory Requirements
18. 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 statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable. 19. As required by Section 143 (3) of theAct 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 have been kept by theCompany so far as it appears from our examination of those books.
(c) The report on the accounts of the unit of the Company audited under section 143(8)of the Act by branch auditor has been sent to us and has been properly dealt with by us inpreparing this report.
(d) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) and the Cash Flow Statement Statement of Changes in Equity dealt with by thisreport are in agreement with the books of account and with the returns received from theunit not visited by us.
(e) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(f) 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;
(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 the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
(i) 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:
a. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note 39 of the standalone Ind AS financialstatements.
b. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
c. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
ANNEXURE- A: TO THE INDEPENDENT AUDITOR'S REPORT To the Members of VIPUL LIMITED
[Referred to in paragraph 18 of the Auditors' Report of even date]
1. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of Property plant and equipments.
(b) As explained to us the company has a system of verifying all its major PropertyPlant & Equipments over a period of three years. The Property Plant & Equipmentsso scheduled for verification during this The discrepancies noticed on such verificationwere not material and yearhavebeenphysicallyverified. have been properly dealt with in thebooks of accounts.
(c) According to the information and explanations given to us and the records of theCompany examined by us the title deeds of the immovable property is yet to be registeredin the name of the Company.
2. The inventory has been physically verified by the management during the year. Thediscrepancies noticed on physical verification of inventory as compared to book recordswere not material and have been properly dealt with in the books of account.
3. (a) According to the information and explanations given to us and based on the auditprocedures conducted by us the Company has granted unsecured loans to a subsidiarycompany covered in the register maintained under section 189 of the Companies Act 2013.The terms and conditions of these loans in our opinion are not prejudicial to theinterests of the Company.
(b)As per the terms of the loan the neither the principal and nor the interest is duefor repayment.
(c ) As per the information and explanations given to us and the records examined byus there is no amount overdue for more than ninety days in respect of recovery ofprincipal and interest of the above loans.
4. According to the information and explanations given to us and the records of theCompany examined by us the provisions of section 185 and 186 of the Companies Act 2013have been complied with in respect of loans investments guarantees and securities givenby the Company.
5. The Company has not accepted any deposits within the meaning of Sections 73 to 76 ofthe Act and the rules framed there under.
6. We have broadly reviewed the books of accounts maintained by the Company pursuant tothe order made by the Central Government for the maintenance of cost records under section148(1) of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. We have not however carried out any detailedexamination of such records and accounts.
7. (a) According to the information and explanations given to us and the records of thecompany examined by us in our opinion the company has generally been regular indepositing the undisputed statutory dues including employees' state insurance income-taxduty of customs goods and services tax cess and any other statutory dues as applicableother than provident fund and income tax deducted at source. According to the informationand explanations given to us no undisputed amounts payable in respect thereof were inarrears as at the last day ofthefinancialyear for a period of more than six months fromthe date they become payable.
(b) According to the information and explanations given to us and the records of thecompany examined by us the following dues of income tax sales tax service tax valueadded tax have not been deposited on account of dispute:-
|Name of the statute ||Nature of dues ||Amount (Rs. in Lacs) ||Financial year for which the amount relates ||Forum where the dispute is pending |
|1 Service Tax (Finance Act1994) ||Service Tax Penalty ||142.32 ||2010-11 to 2013-14 2014-15 2015-16 ||Appeal filed before CAET |
|2 Income Tax Act 1961 ||Income Tax Demand ||870.54 ||(*) 2004-05 2012-13 2013-14 ||CIT (Appeals)New Delhi |
|3 Income Tax Act 1961 ||Income Tax Demand ||81.91 ||2015-16 ||CIT (Appeals)New Delhi |
|4 Income Tax Act 1961 ||TDS Demand ||43.25 ||2013-14 2014-15 2015-16 ||CIT (Appeals)New Delhi |
|5 Orissa Value Added Tax 2004 ||VAT Demand ||106.37(**) ||2009-102011-12 ||Odisha High Court & JCCT Odisha |
|6 Haryana Value Added Tax2003 ||VAT Demand ||979.50 ||2014-15 ||Excise and Taxation Commissioner Haryana |
|7 Service Tax (Finance Act1994) ||Service Tax Demand ||16.11 ||2003-04 2004-05 ||Joint Commissioner Service Tax New Delhi |
|8 Service Tax (Finance Act1994) ||Service Tax Demand ||700.49(***) ||2010-11 to 2013-14 2014-15 2015-16 ||Appeal filed before CAET |
* Net of 74.07 (Rs. In lacs)(PY 74.07) adjusted with demand.
**Net of 15.98 (Rs. In lacs) (PY 15.98) paid under protest.
*** Net of 56.80 (Rs. In lacs) (PY Nil) paid under protest.
8. According to the information and explanation given to us and the records of thecompany examined by us the Company has defaulted in the repayment of dues of certainbanks and financial institutions as detailed below:
|Name of Bank/Financial ||Amount of Default ||Period of Default ||Regularised on |
|Institution ||(Rs. in Lakhs) ||(in days) || |
|DMI Finance Private Limited ||297.94 ||98 ||24/05/2019 |
|Punjab National Bank ||290.67 ||53 ||30/03/2019 |
9. In our opinion and according to the information and explanation given to us on anoverall basis the money raised by Company during the year by way of term loan have beenapplied for the purpose for which they were obtained.
The Company has not raised any money by way of initial public offer or further publicoffer (including debt instruments).
10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud on or by the Company noticed or reported during the year nor have webeen informed of such case by the management. 11. According to the information andexplanations given to us and the records of the company examined by us total managerialremuneration paid as reflected in the financial statements for the year ended 31st March2019 are in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Act as applicable.
12. The related statutes are not applicable as the Company is not a Nidhi Company.
13. According to the information and explanations given to us and the records of theCompany examined by us the company has complied with the requirements of sections 177 and188 of the Act with respect to its transactions with the related parties. Pursuant to therequirement of the applicable Accounting Standard details of the related partytransactions have been disclosed in Note 47 of the standalone Ind AS financial statementsfor the year under audit. 14. The Company has neither made any preferential allotment ofshares nor fully or partly convertible debentures during the year under audit.
15. According to the information and explanations given to us and the records of theCompany examined by us the Company has not entered into any non-cash transactions withany director of the Company and the holding company or persons connected with theminvolving acquisition of assets by or from them for consideration other than cash. 16. Inour opinion and according to the information and explanations given to us not being anon-banking financial company the Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934.
ANNEXURE- B TO THE INDEPENDENT AUDITOR'S REPORT To the Members of VIPUL LIMITED
[Referred to in paragraph 19 (g) of the Independent Auditor's Report of even date]
Report on the Internal Financial Control under Clause (i) of Sub sections 3 ofSection 143 of the Companies Act 2013("the Act")
1. We have audited the internal financial controls over financial reporting ofVIPULLIMITED ("the Company") as of 31st March 2019 in conjunction with our auditof The Ind AS financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Control
2. The Company's management is responsible for establishing and maintaining internalfinancial control 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 (the"Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
3. 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" and the Standard on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includesobtaining an understanding of internal financial control over financial reportingassessing the risk that a material Weakness exists and testing and evaluating the designand operating effectiveness of internal controls based on the assessed risk. The procedureselected depends on the auditor's judgment including the assessment of the risk ofmaterial misstatement of the financial statement whether due to fraud or error.
5. 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 Control over Financial Reporting
6. A Company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that 1) Pertain to themaintenance of the records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; 2) provide reasonableassurance that the transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditure of the Company are being made only in accordance withauthorization of management and directors of company; and 3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition use or dispositionof the Company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Control over Financial Reporting
7. Because of inherent limitation of internal financial control over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to errors or fraud may occur and not be detected.Also projections of any evaluations of the internal financialcontrol 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.
1. In our opinion the Company has in all material respect an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2019 based on theinternal control over financial reporting criteria established by the company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Control Over Financial Reporting issued by ICAI.
| ||For JSUS & Associates |
| ||Chartered Accountants |
| ||(Registration number: 329784E) |
| ||sd/- |
| ||(J. Sil ) |
|Place : Gurugram ||Partner |
|Date : May 30 2019 ||(Membership Number 012723) |