Indo Rama Synthetics (India) Ltd Auditors Report.
To the Members of
Indo Rama Synthetics (India) Limited
1. We have audited the accompanying financial statements of Indo Rama Synthetics (India) Limited (the Company), which comprise the Balance Sheet as at 31 March 2019, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (Act) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Indian Accounting Standards (Ind AS) specified under section 133 of the Act, of the state of affairs (financial position) of the Company as at 31 March 2019, and its loss (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matter
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
5. We have determined the matters described below to be the key audit matters to be communicated in our report.
|Key audit matter||How the matter was addressed in the audit|
|Going concern basis of accounting (Refer Note 1(iii)(b) to the accompanying financial statements)||Our audit procedures included, but were not limited to, the following in relation to assessment of appropriateness of going concern basis of accounting:|
|The Company has incurred loss before tax amounting to र 421.66 crores for the year ended 31 March 2019 and its current liabilities exceeds its current assets by र 552.33 crores as at 31 March 2019.|| Obtained an understanding of the managements process for identifying all events or conditions that could impact the companys ability to continue as a going concern, and the process followed to assess the mitigating factors existing for such events or conditions.|
|While these above indicate doubts about the companys ability to continue as a going concern, as mentioned in aforesaid note, the Company has taken into consideration the following mitigating factors in its assessment for going concern basis of accounting.|| Evaluated the design and tested the operating effectiveness of key controls around aforesaid identification of events or conditions and mitigating factors, and controls around cash flow projections prepared by the management.|
| Additional equity funding received before and subsequent to the year end|
| Restructuring of loans at lower interest rates subsequent to the year end|| Reconciled the cash flow projections to future business plans of the Company as approved by the Board of Directors.|
| Increased capacity utilization of plants|| In order to corroborate managements future business plans and to identify potential contradictory information we read the board minutes, supervisory board minutes and discussed the business plans with management and the Audit Committee.|
| Procurement of raw material at lower prices basis support from new investor|
|Management has prepared future cash flow forecasts taking into cognizance the above developments and performed sensitivity analysis of the other key assumptions used therein to assess whether the Company would be able operate as a going concern for a period of at least 12 months from the date of financial statements, and concluded that the going concern basis of accounting used for preparation of the accompanying financial statements is appropriate with no material uncertainty.|| Tested the appropriateness of the assumptions that had the most material impact including the growth rates, increased utilization of plants and cheaper procurement of raw materials. In challenging these assumptions, we considered our understanding of the business, actual historical results, other relevant existing conditions, external data and market conditions.|
|We have considered the assessment of managements evaluation of going concern basis of accounting as a key audit matter due to the pervasive impact thereof on the financial statements and the significant judgements and assumptions that are inherently subjective and dependent on future events, involved in preparation of cash flow projections and the overall conclusion.|| Tested the arithmetical accuracy of the calculations including those related to sensitivity analysis performed by the management.|
| Performed independent sensitivity analysis to test the impact of variation in the key assumptions.|
| Reviewed the historical accuracy of the cash flow projections prepared by the management in prior periods.|
| Traced the receipt of money through equity funding before and subsequent to year end to Companys bank account and other supporting documentation.|
| Evaluated the appropriateness of the disclosures made in the financial statements in respect of going concern.|
|Recognition of deferred tax assets (Refer note 1(iii)(s)(ii) and note 8(b) to the accompanying financial statements)||Our audit procedures in relation to the recognition of deferred tax assets included, but were not limited to, the following:|
|As detailed in note 1(iii)(s)(ii) and note 8(b) to the financial statements, the Company has deferred tax assets aggregating to र 246.11 crores as at 31 March 2019 including र 85.93 crores deferred tax assets recognised for brought forward business losses.|| Evaluated the design and tested the operating effectiveness of key controls implemented by the Company over recognition of deferred tax assets based on the assessment of Companys ability to generate sufficient taxable profits in foreseeable future allowing the use of deferred tax assets within the time prescribed by income tax laws.|
|The Companys ability to recover the deferred tax assets is assessed by the management at the close of each financial year which depends upon the forecasts of the future results and taxable profits|| Reconciled the future taxable profit projections to future business plans of the Company as approved by the Board of Directors.|
|that Company expects to earn within the period by which such brought forward losses may be adjusted against the taxable profits as governed by the Income-tax Act, 1961.|| Tested the assumptions used in the aforesaid future projections such as growth rates, expected saving, increased utilization of plants, etc. considering our understanding of the business, actual historical results, other relevant existing conditions, external data and market conditions.|
|This matter was the subject of qualification in audit report issued for the financial year ended 31 March 2018. However, considering the positive developments and revised business plans as stated in above key audit matter relating to going concern assessment, we concur with the assessment done by the management of future taxable profits available for realization of such deferred tax asset.|| Tested the arithmetical accuracy of the calculations including those related to sensitivity analysis performed by the management.|
| Performed independent sensitivity analysis to test the impact of possible variations in key assumptions.|
|We have identified the recoverability of deferred tax assets as a key audit matter for the current year audit considering the materiality and significant judgment including the inherent uncertainty involved in forecasting future taxable profits and the probability of utilising the tax losses.|| Reviewed the historical accuracy of the cash flow projections prepared by the management in prior periods.|
| Evaluated managements assessment of time period available for adjustment of such deferred tax assets as per provisions of the Income-tax Act, 1961 and appropriateness of the accounting treatment with respect to the recognition of deferred tax assets as per requirements of Ind AS 12, Income Taxes.|
| Evaluated the appropriateness of the disclosures made in the financial statements in respect of deferred tax assets.|
|Litigations (Refer note 1(iii)(r) and note 32 to the accompanying financial statements)||Our audit procedures in relation to the assessment of litigations and provisions included, but were not limited to, the following:|
| Obtained an understanding of the management process for:|
|As detailed in note 1(iii)(r) and note 32 to the financial statements, the Company is exposed to a large number of litigations including matters pertaining to income tax and prior years matters pertaining to excise, customs, sales tax, value added tax, service tax, etc., which could have a significant impact on the financial position of the Company, if the potential exposures were to materialize.||- identification of legal and tax matters initiated against the Company,|
|- assessment of accounting treatment for each such litigation identified under Ind AS 37 accounting principles, and|
|- measurement of amounts involved.|
|The Company has recognized the provision for potential exposure amounting to र 84 crores during the year ended 31 March 2019 based on its estimate of the likelihood of such liability devolving upon the Company.|| Evaluated the design and tested the operating effectiveness of key controls around above process including for completeness and accuracy of the list of litigations outstanding against the Company.|
|The amounts involved are material and the application of accounting principles as given under Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets, in order to determine the amount to be recognised as a liability or to be disclosed as a contingent liability, in each case, is inherently subjective, and needs careful evaluation and judgement to be applied by the management.|| Obtained understanding of the developments during the year in each existing litigation, and understanding of the new litigations initiated against the Company during the year by inquiry with the management, inspection of case related documents such as notices, orders, etc. and correspondence of the Company with their external counsels handling such matters on behalf of the Company.|
|The judgements involved are with respect to the potential exposure of each litigation and the likelihood and/or timing of cash outflows from the Company, and requires interpretation of laws and past legal rulings.|| We conducted a critical review of the assessment done by the management with the help of its legal and tax experts for the likelihood and potential impact of each litigation, examining the available supporting documents. Tested the independence, objectivity and competence of such external experts involved.|
|Considering the significant judgment, materiality of the amounts involved, inherent high estimation uncertainty and reliance on external legal and tax experts, this matter has been identified as a key audit matter for the current year audit.|| Exercised our professional judgment to assess the managements assessment of the potential likelihood of liability devolving upon the Company with respect to each legal case.|
| Involved auditors experts to assess the Companys interpretation and application of relevant tax laws to evaluate the appropriateness of key assumptions used and the reasonableness of estimates made in relation to uncertain tax positions, taking into account past precedents.|
| Tested the underlying calculations of amount of liability recognized and contingent liability disclosed in the financial statements.|
| For the provisions made in the current year, evaluated the underlying conditions and developments in the legal and tax cases triggering reassessment of such potential liabilities in the current year.|
| Evaluated the disclosures made relating to provisions and contingent liability for their appropriateness.|
Information other than the Financial Statements and Auditors Report thereon
6. The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditors report thereon. The Annual Report is expected to be made available to us after the date of this auditors report.
Our opinion on the financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
7. The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.
8. In preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Auditors Responsibilities for the Audit of the Financial Statements
9. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
10. As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the 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 auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
11. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
12. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
13. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
14. The financial statements of the Company for the year ended 31 March 2018 were audited by the predecessor auditor, BSR and Associates, who have expressed a qualified opinion on those financial statements vide their audit report dated 28 May 2018.
Report on Other Legal and Regulatory Requirements
15. As required by section 197(16) of the Act, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.
16. As required by the Companies (Auditors Report) Order, 2016 (the Order) issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure 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, 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 financial statements dealt with by this report are in agreement with the books of account;
d) in our opinion, the aforesaid financial statements comply with Ind AS specified under section 133 of the Act;
e) on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 from being appointed as a director in terms of section 164(2) of the Act;
f) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2019 in conjunction with our audit of the financial statements of the Company for the year ended on that date and our report dated 15 May 2019 as per Annexure II expressed unmodified opinion;
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 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. the Company, as detailed in note 32 to the financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2019;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2019;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2019;
iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from
8 November 2016 to 30 December 2016, which are not relevant to these financial statements. Hence, reporting under this clause is not applicable.
|For Walker Chandiok & Co LLP|
|Firms Registration No.: 001076N/N500013|
|Date: 15th May 2019||Membership No.: 099410)|
Annexure I to the Independent Auditors Report of even date to the members of Indo Rama Synthetics (India) Limited on the financial statements for the year ended 31 March 2019
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased manner over a period of three, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this program, certain fixed assets were verified during the year by engaging the outside expert and no material discrepancies were noticed on such verification.
(c) The title deeds of all the immovable properties (which are included under the head Property, plant and equipment) are held in the name of the Company except for the following piece of land whose title deeds are not available with the Company:
|Nature of property||Total number of cases||Whether leasehold / freehold||Gross block as on 31 March 2019||Net block on 31 March 2019||Remarks|
|(र in crores)||र (in crores)|
|Land||1||Freehold||0.01||0.01||Management is in the process of applying for certified copies of title deeds.|
(ii) In our opinion, the management has conducted a physical verification of inventory at reasonable intervals, except for goods in transit which have not been verified during the year. No material discrepancies between physical inventory and book records were noticed on physical verification of inventory so physically verified. However, in respect of inventories which were not physically verified we are unable to comment on the discrepancies which could have arisen between physical inventory and book records.
(iii) The Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships (LLPs) or other parties covered in the register maintained under 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 not entered into any transaction covered under Sections 185 and 186 of the Act. Accordingly, the provisions of clause 3(iv) of the Order are not applicable.
(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). 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 pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Companys products and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, service tax, goods and service tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues, as applicable, have not been regularly deposited to the appropriate authorities and there have been significant delays in a large number of cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.
(b) The dues outstanding in respect of income-tax, sales-tax, service-tax, duty of customs, 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|
|(र in crores)||(र in crores)|
|Income Tax Act, 1962*||Income tax||0.19||-||AY 2002-03||Honble Supreme Court|
|Income Tax Act, 1962*||Income tax||0.26||0.26||AY 2006-07||Honble High Court, New Delhi|
|Income Tax Act, 1962*||Income tax||0.23||-||AY 2007-08||Honble High Court, New Delhi|
|Income Tax Act, 1962*||Income tax||0.06||-||AY 2010-11||Commission of Income Tax (Appeals)|
|Income Tax Act, 1962*||Income tax||0.33||-||AY 2017-18||Commission of Income Tax (Appeals)|
|The Central Excise Act, 1944||Duty of excise||25.68||-||2005-06||Customs, Excise & Service Tax Appellate Tribunal|
|The Central Excise Act, 1944||Duty of excise||18.99||3.00||2006-07||Customs, Excise & Service Tax Appellate Tribunal|
|The Central Excise Act, 1944||Duty of excise||8.31||1.00||January-2007 to October-2007||Customs, Excise & Service Tax Appellate Tribunal|
|The Central Excise Act, 1944||Duty of excise||1.98||-||September-2005 to April-2007||Customs, Excise & Service Tax Appellate Tribunal|
|The Central Excise Act, 1944||Duty of excise||1.37||-||December-2007 to September-2008||Commissioner of Central Excise, Customs & Service Tax, Nagpur|
|The Central Excise Act, 1944||Duty of excise||1.12||0.42||2005-2007||Customs, Excise & Service Tax Appellate Tribunal|
|The Central Excise Act, 1944||Duty of excise||0.07||-||1997-2001||Assistant /Deputy Commissioner, Nagpur|
|The Central Excise Act, 1944||Duty of excise||0.02||-||2000-2005||Customs, Excise & Service Tax Appellate Tribunal|
|The Central Excise Act, 1944||Duty of excise||0.43||-||2013-14||Assistant /Deputy Commissioner, Nagpur|
|The Central Excise Act, 1944||Duty of excise||0.31||-||January 2013 to November 2013||Assistant /Deputy Commissioner, Nagpur|
|The Central Excise Act, 1944||Duty of excise||0.20||-||2015-16||Assistant /Deputy Commissioner, Nagpur|
|The Central Excise Act, 1944||Duty of excise||10.90||-||2008-09||Joint secretary, Government of India|
|The Central Excise Act, 1944||Duty of excise||3.20||-||2003-04 to 2004-05||Honble High Court, Mumbai|
|The Central Excise Act, 1944||Duty of excise||2.50||2.50||2004-05||Honble High Court, Mumbai|
|The Central Excise Act, 1944||Duty of excise||18.93||-||2011-12 to 2015-16||Commissioner (Appeals), Nagpur|
|The Central Excise Act, 1944||Duty of excise||0.51||-||March 2008 to December 2010||Customs, Excise & Service Tax Appellate Tribunal|
|The Central Excise Act, 1944||Duty of excise||1.16||0.08||1996-2000||Commissioner (Appeals), Nagpur|
|The Central Excise Act, 1944||Duty of excise||0.33||-||2001-02||Commissioner (Appeals), Nagpur|
|The Central Excise Act, 1944||Duty of excise||0.31||-||2002-03||Commissioner (Appeals), Nagpur|
|The Central Excise Act, 1944||Duty of excise||0.52||-||2008-09 to 2009-10||Customs, Excise & Service Tax Appellate Tribunal|
|The Central Excise Act, 1944||Duty of excise||0.10||-||2000-01||Commissioner (Appeals), Nagpur|
|The Central Excise Act, 1944||Duty of excise||0.38||-||2005-06||Commissioner (Appeals), Nagpur|
|The Central Excise Act, 1944||Duty of excise||0.24||-||December 2008 to June 2010||Commissioner/Assistant Commissioner /Deputy Commissioner, Nagpur|
|The Central Excise Act, 1944||Duty of excise||0.30||0.02||2004-05 to 2014-15||Assistant /Deputy Commissioner, Nagpur|
|Customs Act, 1962||Duty of customs||0.04||-||1997-98 to 1998-99||Assistant Commissioner/ Deputy Commissioner, Nagpur|
|Customs Act, 1962||Duty of customs||6.02||-||2006-07||Customs, Excise and Service Tax Appellate Tribunal|
|Customs Act, 1962||Duty of customs||3.67||0.13||2014-15 to 2015-16||Customs, Excise and Service Tax Appellate Tribunal|
|Customs Act, 1962||Duty of customs||214.25||-||2006-07||Supreme Court|
|Bombay Sales Tax Act, 1959/ Central Sales Tax Act, 1956||Sales tax||0.43||0.13||1998-99 to 1999-00||Joint Commissioner Sales Tax (Appeals), Nagpur|
|Maharashtra Value Added Tax Act, 2002||Value added tax||16.86||3.90||2010-11 to 2014-15||Joint Commissioner Sales Tax (Appeals), Nagpur|
|Finance Act, 1994||Service tax||0.71||-||2007-08||Commissioner (Appeals), Nagpur|
|Finance Act, 1994||Service tax||0.08||-||1997-98 and 2000-01||Assistant/ Deputy Commissioner, Nagpur|
|Finance Act, 1994||Service tax||0.20||-||2002-03 to 2005-06||Commissioner, Nagpur|
|Finance Act, 1994||Service tax||0.22||0.08||2004-05 to 2009-10||Customs, Excise and Service Tax Appellate Tribunal|
*excluding cases where losses/unabsorbed depreciation have been adjusted by the tax authorities without raising any demands, though disputed by the Company.
The above amounts are exclusive of interest and penalty, if any, which may be levied on conclusion of the matters at respective forums.
(viii) There are no loans or borrowings payable to financial institutions or government. The Company has not defaulted in repayment of any dues to debenture-holders during the year. The Company has defaulted in repayment of loans/borrowings to the following banks:
|Name of the bank||Amount of default as on 31 March 2019||Period of default||Remarks|
|(र in crores)|
|IKB Deutsche Bank||63.64||1 to 895 days|
(ix) In our opinion, the Company has applied moneys raised by way of debt instruments and the term loans for the purposes for which these were raised.
(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the Company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable Ind AS.
(xiv) During the year, the Company has made private placement of shares. In respect of the same, in our opinion, the Company has complied with the requirement of Section 42 of the Act and the Rules framed thereunder. Further, in our opinion, the amounts so raised have been used for the purposes for which the funds were raised.
(xv) In our opinion, the Company has not entered into any non-cash transactions with the 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 Reserve Bank of India Act, 1934.
|For Walker Chandiok & Co LLP|
|Firms Registration No.: 001076N/N500013|
|Date: 15th May 2019||Membership No.: 099410)|
Annexure II to the Independent Auditors Report of even date to the members of Indo Rama Synthetics (India) Limited on the financial statements for the year ended 31 March 2019
Independent Auditors Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the Act)
1. In conjunction with our audit of the financial statements of Indo Rama Synthetics (India) Limited (the Company) as at and for the year ended 31 March 2019, we have audited the internal financial controls over financial reporting (IFCoFR) of the Company as at that date.
Managements Responsibility for Internal Financial Controls
2. The Companys Board of Directors is responsible for establishing and maintaining internal financial controls based on the IFCoFR criteria established by the Company considering the essential components of internal financial controls stated in 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 of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Companys business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
3. Our responsibility is to express an opinion on the Companys IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks 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 to provide a basis for our audit opinion on the Companys IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A Companys IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companys IFCoFR include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such controls were operating effectively as at 31 March 2019, based on the IFCoFR criteria established by the Company considering the essential components of internal financial controls stated in the Guidance Note issued by the ICAI.
|For Walker Chandiok & Co LLP|
|Firms Registration No.: 001076N/N500013|
|Date: 15th May 2019||Membership No.: (099410)|