TO THE MEMBERS OF XPRO INDIA LIMITED
Report on the Audit of the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Xpro IndiaLimited (the Company') which comprise the Balance Sheet as at 31 March 2021 theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards (Ind AS') specified under section 133 of the Act of thestate of affairs of the Company as at 31 March 2021 and its profit (including othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Key Audit Matter
4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
5. We have determined the matter described below to be the key audit matter to becommunicated in our report.
|Key audit matter ||How our audit addressed the key audit matter |
|Assets held for sale of unit situated in Biax - Unit 1 || |
|Refer note 4(e) for the accounting policy and note 20 for the financial disclosures. ||Our audit procedures included but were not limited to the following: |
|The Company has a manufacturing unit situated in Barjora (referred to as Biax-Unit 1'). The management has determined Biax-Unit 1 unit as a single cash generating unit (CGU') in accordance with Ind AS 36 Impairment of Assets. ||Assessed the term sheet and the addendum agreement entered into with the buyer and discussed its validity with the management. |
|The Company had entered a Term Sheet' for sale of its assets situated at Biax-Unit 1 basis the approval of the Board of Directors during the year ended 31 March 2019 for a consideration which was greater than the carrying value of the CGU as on the reporting date which was also approved by the shareholders. The sale was subject to obtaining necessary approvals from regulatory authorities and satisfactory trial runs of the plant. Subsequently the parties have also entered into an addendum agreement on 4 February 2021 providing inter alia for interim operations on a job-work basis pending formal approval of transfer. (Interim operations commenced in March 2021.) ||Assessed the carrying value of the assets for any adjustments during the year. |
|The renewal lease deed having been executed during the year the management as required has applied to the Government of West Bengal for transfer of land to the buyer which is pending as at year end. ||Assessed that the disposal cost which has been carried forward meets the definition of asset. |
|Meanwhile the management has conducted the trial run and purchaser has confirmed the plant as acceptable on an "as is where is basis". ||Reviewed the correspondences between the Company and the regulatory authority for transfer of lease deed. |
|The term sheet continues to be binding on the parties involved and hence the Company has presented these assets as "assets held for sale" in the standalone financial statements and valued it at lower of carrying value and fair value less cost to sell in accordance with Ind AS 105. The fair value has been determined based on the value ascribed in the Term Sheet. ||Assessed the events and circumstances for the classification of asset held for sale under Ind AS 105 along with the conditions mentioned in the Term Sheet. |
|This was considered to be one of the areas which required significant auditor attention and a matter which was of most significance in the standalone financial statements due to the nature of transaction and materiality of the balances. ||Assessed reasonableness of management's judgement with respect to the likelihood and expected timing of the implementation of the term sheet. |
| ||Analysed the term sheet entered into with the buyer and noted the consideration agreed is higher than the carrying value of the land building and plant and machinery situated at Biax - Unit I. |
| ||Assessed the appropriateness and completeness of the disclosures in note 20 in accordance with the applicable Ind AS |
Information other than the Financial Statements and Auditor's Report thereon
6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe standalone financial statements and our auditor's report thereon. Our opinion on thestandalone financial statements does not cover the other information and we do not expressany form of assurance conclusion thereon. In connection with our audit of the standalonefinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
7. The accompanying standalone financial statements have been approved by the Company'sBoard of Directors. The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including the IndAS specified under section 133 of the Act. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
8. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
9. Those Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
10. 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 withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements. 11. As part of an audit inaccordance with Standards on Auditing we exercise professional judgment and maintainprofessional 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 section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating 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 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;
12. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
14. 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 period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when 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.
Report on Other Legal and Regulatory Requirements
15. As required by section 197(16) of the Act based on our audit we report that theCompany has paid remuneration to its directors during the year in accordance with theprovisions of and limits laid down under section 197 read with Schedule V to the Act. 16.As required by the Companies (Auditor's Report) Order 2016 (the Order') issued bythe Central Government of India in terms of section 143(11) of the Act we give in theAnnexure I a statement on the matters specified in paragraphs 3 and 4 of the Order. 17.Further to our comments in Annexure I as required by section 143(3) of the Act based onour audit 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 purpose of our audit of theaccompanying standalone financial statements;
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 standalone financial statements dealt with by this report are in agreement withthe books of account;
d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under section 133 of the Act;
e) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2021 from being appointed as a director in terms of section 164(2) of the Act;
f) we have also audited the internal financial controls with reference to financialstatements of the Company as on 31 March 2021 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated 25 May 2021 as per Annexure II expressed unmodified opinion; and
g) with respect to the other matters to be included in the Auditor's Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous:
i. the Company as detailed in note 41 to the standalone financial statements hasdisclosed the impact of pending litigations on its financial position as at 31 March 2021;
ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31 March 2021;
iii. there has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended 31 March 2021;and
iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these standalone financial statements. Hence reporting under thisclause is not applicable.
For Walker Chandiok & Co LLP
Firm's Registration No. 001076N/N500013
Partner Membership No. 507568
Date: 25 May 2021
Annexure I to the Independent Auditor's Report of even date to the members of XproIndia Limited on the standalone financial statements for the year ended 31 March 2021
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets comprising of property plant andequipment capital work-in-progress right-of-use assets and intangible assets.
(b) The fixed assets comprising property plant and equipment and capitalwork-in-progress have been physically verified by the management during the year and nomaterial discrepancies were noticed on such verification. In our opinion the frequency ofverification of the fixed assets is reasonable having regard to the size of the Companyand the nature of its assets.
(c) The title deeds of all the immovable properties (which are included under the headProperty plant and equipment Capital work-in-progress and Right- of- use assets')are held in the name of the Company except for the following properties: ( in lakhs)
|Nature of property ||Total Number of Cases ||Whether leasehold/ freehold ||Gross block as on 31 March 2021 ||Net block on 31 March 2021 ||Remarks * |
|Land ||Two ||Leasehold ||31.24 ||31.24 ||Refer note 5(c) of standalone financial statements |
* Subsequent to year end the Company have got the title deed of the above two landsregistered in their name
(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year. No material discrepancies were noticed on theaforesaid verification.
(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships (LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b)and 3(iii)(c) of the Order are not applicable.
(iv) In our opinion the Company has complied with the provisions of Section 186 inrespect of investments. Further in our opinion the Company has not entered into anytransaction covered under Section 185 and Section 186 of the Act in respect of loansguarantees and security.
(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's products and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax cess and other material statutory dues as applicable have generally beenregularly deposited to the appropriate authorities though there has been a slight delayin a few cases. Further no undisputed amounts payable in respect thereof were outstandingat the year-end for a period of more than six months from the date they became payable.
(b) The dues outstanding in respect of income-tax sales-tax service-tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:
Statement of Disputed Dues
|Name of the statute ||Nature of dues ||Amount ||Amount paid under Protest ||Period to which the amount relates ||Forum where dispute is pending |
| || ||(Rs in lakhs) ||(Rs in lakhs) || || |
|Central Excise Act 1944 ||Excise duty ||19.92 ||- ||2012-14 ||Commissioner of Central Excise Appeals Kolkata |
|Central Excise Act 1944 ||Excise duty ||9.88 ||0.74 ||2016-18 ||Superintendant Central Excise Kolkata |
|Central Excise Act 1944 ||Excise Duty ||11.73 ||- ||2010-11 ||Commissioner of Central Excise Appeals Kolkata |
|Central Excise Act 1944 ||Excise Duty ||10.59 ||- ||2010-11 ||Commissioner of Central Excise Appeals Kolkata |
|Sales Tax Act ||UP Trade Tax ||4.26 ||3.41 ||2004-05 ||Commissioner of Sales Tax |
|Sales Tax Act ||Sales Tax Demand ||35.06 ||3.88 ||1996-2011 ||Deputy Commissioner (Appeal) Durgapur |
|Sales Tax Act ||Sales Tax Demand ||0.91 ||0.23 ||2013-14 ||Office of appellate authority commercial tax department Madhya Pradesh |
|Central Excise Act 1944 ||Excise Duty ||22.62 || ||2013-15 ||Directorate General of Central Excise Intelligence |
| || || ||- || || |
|Central Excise Act 1944 ||Excise Duty ||12.79 ||- ||2013-15 ||Commissioner of Central Excise Appeals Kolkata |
|Central Excise Act 1944 ||Excise Duty ||6.64 || ||2014-16 ||Commissioner of Central Excise Appeals Kolkata |
| || || ||- || || |
|Central Excise Act 1944 ||Excise Duty ||4.09 ||- ||2015-16 ||Commissioner of Central Excise Appeals Kolkata |
|Central Excise Act 1944 ||Excise Duty ||15.53 ||1.86 ||2013-15 ||Commissioner of Central Excise Appeals Kolkata |
|Central Excise Act 1944 ||Excise Duty ||9.31 || ||2014-16 ||Commissioner of Central Excise Appeals Kolkata |
| || || ||- || || |
|Central Excise Act 1944 ||Excise Duty ||26.93 ||2.29 ||2015-16 ||Commissioner of Central Excise Appeals Kolkata |
|Central Excise Act 1944 ||Excise Duty ||26.00 ||2.66 ||2016-17 ||Commissioner of Central Excise Appeals Kolkata |
|Central Excise Act 1944 ||Excise Duty ||1.32 ||0.40 ||2014-17 ||Commissioner of Central Excise Appeals Kolkata |
|Sales Tax Act ||Uttar Pradesh Entry Tax ||11.34 ||- ||2002-03 ||Hon'ble Supreme Court of India |
|Central Excise Act 1944 ||Excise Duty ||7.28 ||- ||2014-17 ||Commissioner of Central Excise Appeals Kolkata |
|Central Excise Act 1944 ||Excise Duty ||61.23 ||- ||2018-19 ||Assistant Commissioner of Central Excise Appeals Kolkata |
|Central Excise Act 1944 ||Service Tax ||0.82 ||0.25 ||2014-17 ||Commissioner of Central Excise Appeals Kolkata |
|Central Excise Act 1944 ||Service Tax ||53.11 ||- ||2014-16 ||Commissioner of Central Excise Appeals Kolkata |
|Central Goods & Services Tax Act 2017 ||Excise Duty ||0.32 ||- ||2013-14 ||Assistant Commissioner CGST & Central Excise Bankura |
|Central Goods & Services Tax Act 2017 ||Excise Duty ||23.90 ||- ||2014-17 ||Assistant Commissioner CGST & Central Excise Bankura |
|Central Goods & Services Tax Act 2017 ||Excise Duty ||1.80 ||- ||2014-17 ||Assistant Commissioner CGST & Central Excise Bankura |
(viii) The Company has not defaulted in repayment of loans or borrowings to any bankduring the year. The Company did not have any loans or borrowings payable to any financialinstitution or government and no outstanding debentures during the year.
(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained.
(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the Company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.
(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.
(xv) In our opinion the Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
For Walker Chandiok & Co LLP
Firm's Registration No. 001076N/N500013
Partner Membership No. 507568
Date: 25 May 2021
Annexure II to the Independent Auditor's Report of even date to the members of XproIndia Limited on the standalone financial statements for the year ended 31 March 2021
Independent Auditor's Report on the internal financial controls with reference to thestandalone financial statements under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 (the Act')
1. In conjunction with our audit of the standalone financial statements of Xpro IndiaLimited (the Company') as at and for the year ended 31 March 2021 we have auditedthe internal financial controls with reference to financial statements of the Company asat that date.
Responsibilities of Management and Those Charged with Governance for Internal FinancialControls
2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the Guidance Note') issued by the Institute of Chartered Accountants ofIndia (ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of the Company's business including adherenceto the Company'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 Act.
Auditor's Responsibility for the Audit of the Internal Financial Controls withReference to Financial Statements
3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Standards on Auditing issued by the ICAI prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controlswith reference to financial statements and the Guidance Note issued by the ICAI. 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 controls with reference to financial statements were established and maintainedand if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements includes obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements 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 withreference to financial statements.
Meaning of Internal Financial Controls with Reference to Financial Statements
6. A company's internal financial controls with reference to financial statementsis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrols with reference to financial statements include those policies and procedures that(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements
7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
8. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to financial statements and such controls were operatingeffectively as at 31 March 2021 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.
For Walker Chandiok & Co LLP
Firm's Registration No. 001076N/N500013
Partner Membership No. 507568
Date: 25 May 2021