ICSA (INDIA) LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of ICSA (INDIA) LIMITED
("the Company") which comprise the Balance Sheet as at March 31, 2017, the
Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a
summary of significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these financial statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the Accounting Standards specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This
responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or
error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our
audit.
We have taken into account the provisions of the Act, the accounting and auditing
standards and matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under and the Order under Section 143(11)
of the Act.
We conducted our audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the financial statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the
auditor considers internal financial control relevant to the Companys preparation of the
financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness of the accounting
estimates made by the Companys Directors, as well as evaluating the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the financial statements.
Basis for Qualified Opinion i) Attention is invited to Note No.7 to Notes on
Financial statements regarding non-provision of interest on working capital loans for an
amount of Rs. 15,392.37 lacs (Cumulative upto 31-03-2017 amounting to Rs.48,996.20 lacs)
The loss of the company is understated to an extent of Rs.15,392.37 lacs for the year and
cumulative loss upto 31-03-2017 to the extent of Rs.48,996.20 lacs and liability of the
company is understated to that extent. ii) Attention is invited to Note No.9 to Notes on
Financial statements regarding non-provision of interest on Term Loans from banks for an
amount of Rs.13,190.18 lacs (Cumulative upto 31-03-2017 amounting to Rs.39,148.17 lacs).
The loss of the company is understated to an extent of Rs. 13,190.18 lacs for the year and
cumulative loss upto 31-03-2017 to the extent of Rs. 39,148.17 lacs and liability of the
company is understated to that extent. iii) Attention is invited to Note No.9 to Notes on
Financial statements regarding non-provision of interest on corporate dividend tax for an
amount of Rs.12.85 lacs for the year (Cummulative interest upto 31-03-2017 amounting to
Rs.89.94 lacs. The loss of the company is understated to an extent of Rs.12.85 lacs for
the year and cumulative loss upto 31-03-2017 to the extent of Rs. 89.94 lacs and liability
of the company is understated to that extent.
iv) Attention is invited to Note No.24 (a)(iii) to Notes on Financial statements
regarding non-provision of Rs. 6,427.58 lacs, towards differential interest for non
acceptance of CDR package by banks. The loss of the company is understated to an extent of
Rs. 6,427.58 lacs and the liability of the company is understated to that extent. v) The
company is not carrying on any activities, In view of the above, we are of the opinion
that the company is not able to continue as a going concern
Qualified Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects of the matter described in the Basis for Qualified
Opinion paragraph above, the aforesaid standalone financial statements give the
information required by the Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India, of the state of
affairs of the Company as at 31st March, 2017, and its loss and its cash flows for the
year ended on that date.
Emphasis of Matters
We draw attention on the following matters in the notes to the financial statements i)
Note no. 12 in respect of Long term loans and advances Rs. 5,616.79 lacs. Loans and
Advances are subject to confirmation and reconciliation. ii) Note no. 14 in respect of
Inventory Rs. 4,913.79 lacs. The physical verification was not carried by the management
during the year and valuation is done by the management. We relied upon the
representations given by the Management. iii) Note no. 15 in respect of trade receivables
Rs.16,693.82 lacs (net of provision). Receivables are subject to confirmation and
reconciliation. iv) Financial statements being prepared on going concern basis
notwithstanding the fact that the consortium banks recalled their debts and issued notices
under SARFAESI Act, 2002 to take the possession of the assets of the Company and majority
of the customers have cancelled their contracts with the Company. These events cast
significant doubt on the ability of the Company to continue as going concern. The
appropriateness of assumption of going concern is dependent upon the Companys ability to
infuse funds to meet its debt and resuming normal operations.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order"),
as amended, issued by the Central Government of India in terms of sub-section (11) of
section 143 of the Act, we give in the "Annexure A" a statement on the matters
specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that: a. we have sought and
obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purpose of our audit; b. in our opinion proper books of
account as required by law have been kept by the Company so far as it appears from our
examination of those books; c. the Balance Sheet, the Statement of Profit and Loss and the
Cash Flow Statement dealt with by this Report are in agreement with the books of account
d. In our opinion, the aforesaid financial statements comply with the Accounting Standards
specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014, except Accounting standard (AS) 15 "Employee Benefits" relating
to the provision for gratuity. e. On the basis of written representations received
from the directors as on March 31, 2017 taken on record by the Board of Directors, none of
the directors is disqualified as on March 31, 2017 from being appointed as a director in
terms of Section 164 (2) of the Act.
e. With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls: f. The
system of internal financial controls over financial reporting with regard to Company were
not made available to us to enable us to determine if the Company has established adequate
internal financial control systems over financial reporting at the aforesaid Company and
whether such internal financial controls were operating effectively as at March 31,2017.
We have considered the disclaimer reported above in determining the nature, timing, and
extent of audit tests applied in our audit of the financial statements of Company and the
disclaimer does not affect our opinion on the financial statements of the said Company. g.
With respect to the other matters to be included in the Auditors Report in accordance
with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 and in our opinion and to
the best of our information and according to the explanations given to us: i. The Company
has disclosed the impact of pending litigations as at 31st March 2017 on its financial
position in its financial statements as referred to in note 24(a) (i) (ii) (iii) and (iv)
to the financial statements. ii. The Company has made provision, as required under the
applicable law or accounting standards, for material foreseeable losses, if any, and on
long term contracts including derivative contracts. iii. There has been no delay in
transferring amounts, required to be transferred, to the Investor Education and Protection
Fund by the Company. iv. The company has provided requisite disclosures in its financial
statements as to holdings as well as dealings in Specified Bank Notes during the period
from 8th November, 2016 to 30th December, 2016 and these are in accordance with the books
of accounts maintained by the Company. Refer to Note No.16.1 to the financial statements.
For RAMBABU & Co.,
Chartered Accountants FRN: 002976S
RAVI RAMBABU
Partner M.No. 018541
| Place: Hyderabad |
| Date: 30-05-2017 |
"Annexure A" to the Independent Auditors Report
Referred to in paragraph 1 under the heading ‘Report on Other Legal &
Regulatory Requirement of our report of even date to the financial statements of the
Company for the year ended March 31, 2017:
1. (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets. However, fixed assets register is not
updated during the year. (b) As explained to us, the fixed assets have not been physically
verified by the management according to the phased program designed to cover all the fixed
assets over the year.
(c) Banks have issued notices under SARFAESI Act, 2002 to take possession of the assets
of the Company. This event cast significant doubts on the ability of the Company to
continue as a going concern.
2) In respect of its inventories:
(a) As explained to us, inventories have not been physically verified during the year
by the management. (b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories followed by the
management are not reasonable and adequate in relation to the size of the company and the
nature of its business.
(c) The company has maintained proper records of inventories. However, the physical
verification of inventory was not carried out by the management during the year.
3. The Company has not granted any loans, secured or unsecured to companies, firms,
Limited Liability partnerships or other parties covered in the Register maintained under
section 189 of the Act. Accordingly, the provisions of clause 3 (iii) (a) to (C) of the
Order are not applicable to the Company and hence not commented upon.
4) In our opinion and according to the information and explanations given to us, the
company has complied with the provisions of section 185 and I86 of the Companies Act, 2013
In respect of loans, investments, guarantees, and security.
5) The Company has not accepted any deposits from the public and hence the directives
issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other
relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with
regard to the deposits accepted from the public are not applicable.
6) We have broadly reviewed the cost records maintained by the Company pursuant to the
rules prescribed by the Central Government of India under Section 148(1) of the Companies
Act 2013 and are of the opinion that prima facie the prescribed cost records have been
made and maintained. We have, however, not made a detailed examination of the cost records
with a view to determine whether they are accurate or complete.
7) (a) According to information and explanations given to us and on the basis of our
examination of the books of account, and records, the Company has not been generally
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 with the appropriate authorities. According
to the information and explanations given to us, no undisputed amounts payable in respect
of the above were in arrears as at March 31, 2017 for a period of more than six months
from the date on when they become payable except the following:
| Nature of Due |
Rs. In Lakhs |
| Corporate Dividend Tax |
142.76 |
| PF Employee Contribution |
1.23 |
| PF Employer Contribution |
1.5 |
| Professional Tax |
0.24 |
| TDS Payable |
1259.32 |
| ESI Employer Contribution |
0.55 |
| Service Tax |
0.92 |
(b) Details of statutory dues which have not been deposited as on 31st March 2017 on
account of disputes are given below:
| Name of the Statute |
Nature of the dues |
year to which the amount relates |
Forum where dispute is pending |
Amount. (Rs. In Lakhs) |
Deposit Amount (Rs.in Lakhs) |
Unpaid Deposit Amount (Rs.in Lakhs) |
| Income Tax Act,1961 |
Income Tax |
2009-10 |
The Commissioner of Income Tax (Appeals) |
2188.06 |
- |
2188.06 |
| Income Tax Act,1961 |
Income Tax |
2010-11 |
The Commissioner of Income Tax (Appeals) |
40,361.92 |
- |
40,361.92 |
| Income Tax Act,1961 |
Income Tax |
2011-12 |
The Commissioner of Income Tax (Appeals) |
26,270.36 |
- |
26,270.36 |
| Income Tax Act,1961 |
Income Tax |
2012-13 |
The Commissioner of Income Tax (Appeals) |
8,401.29 |
- |
8,401.29 |
|
|
Total |
|
77,221.63 |
- |
77,221.63 |
8) According to the records of the Company examined by us and the information and
explanations given to us, the company has defaulted in repayment of dues to financial
institution and banks as at the Balance sheet date.
| Name of the Bank |
Principal (Rs. lacs) |
Interest (Rs. lacs) |
| 1 Andhra Bank |
3615.62 |
827.30 |
| 2 Oriental Bank of Commerce |
9,991.91 |
2,509.02 |
| 3 Bank of India |
- |
1,909.63 |
| 4 Punjab National Bank |
- |
2,591.41 |
| 5 State Bank of India |
|
3,956.85 |
| 6 Union Bank of India |
- |
1,720.61 |
| 7 IDBI Bank Limited |
- |
1,167.33 |
| 8 Andhra Bank |
- |
3,159.66 |
| 9 Bank of India |
3,050.60 |
- |
| 10 Punjab National Bank |
1,845.82 |
- |
| 11 State Bank of India |
3,543.51 |
- |
| 12 Union Bank of India |
2,153.18 |
- |
| 13 IDBI Bank Limited |
125.67 |
|
| 14 Andhra Bank |
1,220.46 |
- |
9) Based upon the audit procedures performed and the information and explanations given
by the management, the company has not raised moneys by way of initial public offer or
further public offer including debt instruments and term Loans. Accordingly, the
provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not
commented upon.
10) Based upon the audit procedures performed and the information and explanations
given by the management, we report that no fraud by the Company or on the company by its
officers or employees has been noticed or reported during the year.
11) Based upon the audit procedures performed and the information and explanations
given by the management, the company has not paid/provided any managerial remuneration
during the year under Audit.
12) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of
clause 4 (xii) of the Order are not applicable to the Company.
13) In our opinion, all transactions with the related parties are in compliance with
section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the
Financial Statements as required by the applicable accounting standards.
14) Based upon the audit procedures performed and the information and explanations
given by the management, the company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures during the year under
review. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to
the Company and hence not commented upon.
15) Based upon the audit procedures performed and the information and explanations
given by the management, the company has not entered into any non-cash transactions with
directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of
the Order are not applicable to the Company and hence not commented upon. 16) In our
opinion, the company is not required to be registered under section 45 IA of the Reserve
Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are
not applicable to the Company and hence not commented upon.
For RAMBABU & Co.,
Chartered Accountants
FRN: 002976S
RAVI RAMBABU
Partner
M.No.018541
Place: Hyderabad Date: 30-05-2017
DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
To
The Board of Directors ICSA (INDIA) LIMITED
Dear Sir,
I undertake to comply with the conditions laid down in Regulation 25 of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 read with section 149 and
Schedule IV of the Companies Act, 2013 in relation to conditions of independence and in
particular: (a) I declare that upto the date of this certificate, apart from receiving
directors remuneration, I did not have any material pecuniary relationship or
transactions with the Company, its promoter, its directors, senior management or its
holding Company, its subsidiary and associates as named in the Annexure thereto which may
affect my independence as director on the Board of the Company. I further declare that I
will not enter into any such relationship/transactions. However, if and when I intend to
enter into such relationships/transactions, whether material or non-material I shall keep
prior approval of the Board. I agree that I shall cease to be an independent director from
the date of entering into such relationship/transaction.
(b) I declare that I am not related to promoters or persons occupying management
positions at the Board level or at one level below the board and also have not been
executive of the Company in the immediately preceding three financial years.
(c) I was not a partner or an executive or was also not partner or executive during the
preceding three years, of any of the following: (i) the statutory audit firm or the
internal audit firm that is associated with the Company and (ii) the legal firm(s) and
consulting firm(s) that have a material association with the company (d) I have not been a
material suppliers, service provider or customer or lessor or lessee of the company, which
may affect independence of the director, and was not a substantial shareholder of the
Company i.e., owning two percent or more of the block of voting shares.
Thanking you.
Yours Faithfully,
Date: 11.08.2017 Place : Hyderabad.
Sd/-
SARVESWAR REDDY MANDRA
(Independent Director) (Din: 02646060)
DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
To
The Board of Directors ICSA (INDIA) LIMITED
Dear Sir,
I undertake to comply with the conditions laid down in Regulation 25 of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 read with section 149 and
Schedule IV of the Companies Act, 2013 in relation to conditions of independence and in
particular: (a) I declare that upto the date of this certificate, apart from receiving
directors remuneration, I did not have any material pecuniary relationship or
transactions with the Company, its promoter, its directors, senior management or its
holding Company, its subsidiary and associates as named in the Annexure thereto which may
affect my independence as director on the Board of the Company. I further declare that I
will not enter into any such relationship/transactions. However, if and when I intend to
enter into such relationships/transactions, whether material or non-material I shall keep
prior approval of the Board. I agree that I shall cease to be an independent director from
the date of entering into such relationship/transaction.
(b) I declare that I am not related to promoters or persons occupying management
positions at the Board level or at one level below the board and also have not been
executive of the Company in the immediately preceding three financial years.
(c) I was not a partner or an executive or was also not partner or executive during the
preceding three years, of any of the following: (i) the statutory audit firm or the
internal audit firm that is associated with the Company and (ii) the legal firm(s) and
consulting firm(s) that have a material association with the company (d) I have not been a
material suppliers, service provider or customer or lessor or lessee of the company, which
may affect independence of the director, and was not a substantial shareholder of the
Company i.e., owning two percent or more of the block of voting shares.
Thanking you.
Yours Faithfully,
Date: 11.08.2017 Place : Hyderabad.
| Sd/- |
| TELUKUTLA SRINIVASA RAO |
| (Independent Director) |
| (Din: 06545264) |
+91-9892691696
