To the Members of Innovassynth Investments Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the standalone Financial Statements of Innovassynth Investments Limited
("the Company"), which comprise the Balance Sheet as at March 31, 2023, and the
Statement of Profit and Loss (including Other Comprehensive Income), [Statement of Changes
in Equity] and Statement of Cash Flows for the year then ended, and notes to the Financial
Statements, including a summary of Significant Accounting Policies and other explanatory
information (hereinafter referred to as "the Standalone Financial Statements".
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone Financial Statements give the information required
by the Companies Act, 2013 (‘the Act) in the manner so required and give a true and
fair view in conformity with the Indian Accounting Standards prescribed under Section 133
of the Act read with Companies (Indian Accounting Standards) Rules, 2015 as amended and
other the accounting principles generally accepted in India, of the standalone state of
affairs of the Company as at March 31, 2023, and its standalone loss including Other
Comprehensive Income, changes in equity and its standalone cash flows for the year ended
on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) 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 standalone 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 together with the ethical requirements that are relevant to our audit
of the standalone 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.
Material Uncertainty Related to Going Concern
We draw attention to the Note 28 of the standalone financial statements, which
indicates that the Company has incurred a net loss of INR 65.63 lakhs (March 31, 2022: INR
64.50 lakhs) during the year ended March 31, 2023 and as of that date, has accumulated
losses of INR 488.70 lakhs (March 31, 2022 INR 423.07 lakhs). Also, the
Companys current liabilities exceeded its current assets by INR 443.77 lakhs (Previous
year INR 378.17 lakhs) as on balance sheet date. As stated in the said Note, these events,
or conditions, indicate that a material uncertainty exists that may cast significant doubt
on the Companys ability to continue as a going concern.
However, being an investment company, the management believes that on occurrence of
either of the mentioned events in future with respect to its investee company,
Innovassynth Technologies (India) Limited
(‘ITIL) i.e. declaration of dividend by ITIL, or selling off partial/complete
investment stake in ITIL, will enable the
Company to generate additional cash flows. In view of the above, the standalone
financial statements of the Company have been prepared on a going concern basis.
Our opinion is not modified in respect of the above matter.
Other Information
The Companys Board of Directors is responsible for the other information. The other
information comprises the Directors report but does not include the standalone financial
statements and our auditors report thereon.
Our opinion on the financial statements does not cover the other information and we do
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 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. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the standalone financial statements for the year ended March
31, 2023. These matters were addressed in the context of our audit of the standalone
financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
| Transactions with Related Parties: |
How Was the Key Audit Matter Addressed in the Audit |
| The Company has made investment in shares |
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a. |
Obtained an understanding of the process for |
| of its related party which is its Associate. The |
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identifying related party transactions, performed a |
| investment in this Associate is being carried at |
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walkthrough and evaluated the design of controls. |
| its historical cost by the Company at 31st March |
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| 2023. |
b. |
Verified that the transactions are approved in |
| The Company also avails inter-corporate loan |
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accordance with internal procedures and the |
| from this Associate at a rate of interest which is |
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applicable regulations to the Company. |
| at an arms length, for the purposes of its routine |
c. |
Tested on a sample basis the arrangements |
| transactions. |
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between the related par ties along with supporting |
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documents to evaluate the managements |
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assertions that the transactions were at arms |
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length and in the ordinary course of business. |
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d. |
Evaluated and tested on a sample basis the rights |
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and obligations of the related parties and assessed |
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whether the transactions were recorded |
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appropriately and whether the relationships and |
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transactions with related parties have been |
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disclosed in accordance with IND AS 24 "Related |
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|
Party Disclosures". |
Responsibilities of Management and Those Charged with Governance for the Standalone
Financial Statements
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 Standalone Financial Statements
that give a true and fair view of the standalone financial position, standalone financial
performance including other comprehensive income, standalone changes in equity and
standalone cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Indian Accounting Standards (Ind AS) specified
under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,
2015, as amended. 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 standalone Financial Statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error. In preparing the standalone
Financial Statements, the 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.
Those Board of Directors are also responsible for overseeing the Companys financial
reporting process.
Auditors Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone
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 SAs 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 standalone Financial Statements. As part of an audit in
accordance with SAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone 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. Under section 143(3)(i) of the
Act we are also responsible for expressing our opinion on whether the Company has adequate
internal financial controls system in place and the operating effectiveness of such
controls.
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 standalone 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 standalone Financial
Statements, including the disclosures, and whether the standalone Financial Statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
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. 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.
Other Matters
The Standalone Financial Statements of the Company for the year ended March 31, 2022,
were audited by other auditors who had expressed an unmodified opinion on those statements
on May 30, 2022.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2020 ("the Order"),
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, to the extent applicable.
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 purposes 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, the
Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report
are in agreement with the books of account. d. In our opinion, the aforesaid standalone
financial statements comply with the Accounting Standards specified under Section 133 of
the Act read with Companies (Indian Accounting Standards) Rules, 2015 as amended. e. On
the basis of the written representations received from the directors as on March 31, 2023,
taken on record by the Board of Directors, none of the directors are disqualified as on
March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act.
f. With respect to the adequacy of the internal financial controls with reference to
financial reporting of the
Company and the operating effectiveness of such controls, refer to our separate Report
in "Annexure B". g. As required by section 197 (16) of the Act; in our opinion
and according to information and explanation provided to us, the remuneration paid by the
company to its directors is in accordance with the provisions of section 197 of the Act
and remuneration paid to directors is not in excess of the limit laid down under this
section. h. 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, in our opinion
and to the best of our information and according to the explanations given to us: a) The
Company does not have any pending litigations which would impact its financial position.
b) The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses. c) There were no amounts which were
required to be transferred to the Investor Education and Protection Fund by the Company.
d) (a) The management has represented to us that, to the best of its knowledge and belief,
other than as disclosed in the notes to the accounts to the financial statements, if any,
no funds have been advanced or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the Company to or in any other person(s)
or entity(ies), including foreign entities
("Intermediaries"), with the understanding, whether recorded in writing or
otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the
company ("Ultimate Beneficiaries") or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries. (b) the management has represented to us,
that, to the best of its knowledge and belief, other than as disclosed in the notes to the
accounts to the Financial Statements, if any, no funds have been received by the Company
from any person(s) or entity(ies), including foreign entities ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the
Company shall, whether, directly or indirectly, lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the Funding Party
("Ultimate Beneficiaries") or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries. e) The Company has not declared or paid dividend
during the year. i. The requirement to the use of accounting software for maintaining
Companys books of account which has a feature of recording audit trail (edit log)
facility, as prescribed under rule 3(1) of the Companies (Accounts) Rules, 2014, is
deferred to financial years commencing on or after April 1, 2023, therefore reporting
under Rule 11(g) of Companies (Audit & Auditors) Rules, 2014 is not applicable for
financial year ended on March 31, 2023.
For P G BHAGWAT LLP
Chartered Accountants FRN: 101118W/W100682
Shriniwas Shreeram Gadgil
Partner
Membership Number: 120570
Place: Mumbai Date: 29th May 2023
UDIN: 23120570BGUEGQ1039
Annexure A to the Independent Auditors Report
Referred to in paragraph 1 under the heading, "Report on Other legal and
Regulatory Requirements" of our report on even date:
i. The Company is involved in the business of investing only and does not have any
fixed assets. Accordingly, the provisions stated in paragraph 3 (i) of the Order are not
applicable to the Company.
ii. The Company is involved in the business of investing only and does not have any
inventories. Accordingly, the provisions stated in paragraph 3 (ii) of the Order are not
applicable to the Company.
iii. The company during the year has not made investments in, provided any guarantee or
security or granted any loans or advances in the nature of loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships or any other parties. Hence reporting
under Clause (iii)(a), (iii)(b), (iii)(c), (iii)(d), (iii)(e) and (iii)(f), of the said
Order are not applicable to the Company.
iv. In our opinion, and according to the information and explanations given to us, the
Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013
in respect of the loans and investments made, and guarantees and security provided by it.
v. The Company has not accepted any deposits or amounts which are deemed to be deposits
from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules
framed there under to the extent notified.
vi. The Central Government of India has not specified the maintenance of cost records
under sub-section (1) of Section 148 of the Act for any of the products of the Company.
vii. (a) According to the information and explanations given to us and the records of the
Company examined by us, in our opinion, the Company is regular in depositing the
undisputed statutory dues, including Goods and Service Tax and income tax , with the
appropriate authorities. The provisions of provident fund, employees state insurance,
sales tax, service tax, duty of customs, duty of excise, value added tax and cess were not
applicable to the Company during the year.
(b) According to the information and explanations given to us and the records of the
Company examined by us, there are no statutory dues referred to in sub-clause (a) which
have not been deposited on account of any dispute. viii. In terms of the information and
explanations given to us and the books of account and records examined by us, the Company
has not surrendered or disclosed as income during the year in the tax assessments under
the Income Tax Act, 1961. Hence reporting under clause 3(viii) of the order is not
applicable.
ix.
(a) According to the records of the Company examined by us and the information and
explanation given to us, the Company has not defaulted in repayment of loans or other
borrowings or in the payment of interest thereon to any lender as at the balance sheet
date. (b) According to the information and explanations given to us and on the basis of
our audit procedures, we report that the company has not been declared wilful defaulter by
any bank or financial institution or government or any government authority. (c) In our
opinion and according to the information and explanations given to us, the company has
utilized the money obtained by way of term loans during the year for the purposes for
which they were obtained.
(d) According to the information and explanations given to us, and the procedures
performed by us, and on an overall examination of the financial statements of the company,
we report that the company has used funds raised on short term basis aggregating to Rs.
443.77 crores for long-term purposes. (e) According to the information explanation given
to us and on an overall examination of the standalone financial statements of the Company,
we report that the Company has not taken any funds from an any entity or person on account
of or to meet the obligations of its associate. The Company does not have any subsidiary
or joint venture. (f) According to the information and explanations given to us and
procedures performed by us, we report that the company has not raised loans during the
year on the pledge of securities held in its subsidiaries, joint ventures or associate
companies.
x.
(a) The Company has not raised any moneys by way of initial public offer, further
public offer (including debt instruments) during the year. Accordingly, the provisions of
Clause 3(x)(a) of the Order are not applicable to the Company. (b) The Company has not
made any preferential allotment or private placement of shares or fully or partly or
optionally convertible debentures during the year. Accordingly, the provisions of Clause
3(x)(b) of the Order are not applicable to the Company.
xi.
(a) During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing practices in India, and
according to the information and explanations given to us, we have neither come across any
instance of fraud by the Company or on the Company noticed or reported during the year,
nor have we been informed of any such case by the Management. (b) During the course of our
examination of the books and records of the Company, carried out in accordance with the
generally accepted auditing practices in India, and according to the information and
explanations given to us, report in the form ADT-4 as specified under sub-section (12) of
section 143 of the Companies Act has not been filed. Accordingly reporting under clause
3(xi)(b) of the order is not applicable. (c) During the course of our examination of the
books and records of the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and explanations given to us
and as represented to us by the management, there are no whistle blower complaints
received by the company during the year.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable
to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with
the provisions of Sections 177 and 188 of the Act. The details of related party
transactions have been disclosed in the financial statements as required under Ind AS 24,
Related Party Disclosures specified under Section 133 of the Act, read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended. xiv.
(a) In our opinion and based on our examination, the Company has an internal audit
system commensurate with the size and nature of its business. (b) We have considered
internal audit reports issued by internal auditors during our audit.
xv. The Company has not entered into any non-cash transactions with its directors or
persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are
not applicable to the Company. xvi.
(a) The Company is not required to be registered under Section 45-IA of the Reserve
Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi)(a) of the Order are
not applicable to the Company. (b) According to the information and explanations given to
us and procedures performed by us, we report that the Company has not conducted any
Non-Banking Financial or Housing Finance activities during the year. Therefore reporting
under clause 3(xvi)(b) of the order is not applicable. (c) According to the information
and explanations given to us and procedures performed by us, the Company is not Core
Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India,
hence reporting under clause 3(xvi)(c) of the order is not applicable. (d) According to
the information and explanations given to us and procedures performed by us, the Company
does not have any CIC as part of its group. Hence the provisions stated in paragraph
clause 3 (xvi) (d) of the order are not applicable to the company.
xvii. The Company has incurred cash losses of INR 65.63 Lakhs during current financial
year and had incurred cash losses of INR 64.50 Lakhs during immediately preceding
financial year.
xviii. There has been no resignation by statutory auditors during the year hence
reporting under clause 3(xviii) of the order is not applicable.
xix. According to the information and explanations given to us and on the basis of the
financial ratios, ageing and expected dates of realization of financial assets and payment
of financial liabilities, other information accompanying the financial statements, our
knowledge of the Board of Directors and management plans, in our opinion and according to
the information and explanations given to us during the course of the audit, material
uncertainty exists as on the date of the audit report that company is not capable of
meeting its liabilities existing at the date of balance sheet as and when they fall due
within a period of one year from the balance sheet date.
Read with the paragraph "Material uncertainty related to Going Concern" in
Main Auditors Report.
xx. According to the information and explanations given to us, the provisions of
section 135 of the Act are not applicable to the Company. Accordingly, the provisions of
paragraph (xx)(a) to (b) of the Order are not applicable to the Company.
For P G BHAGWAT LLP
Chartered Accountants FRN: 101118W/W100682
Shriniwas Shreeram Gadgil
Partner
Membership Number: 120570
Place: Mumbai Date: 29th May 2023
UDIN: 23120570BGUEGQ1039
Annexure B to the Independent Auditors Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the
Companies Act, 2013 ("the Act")
Opinion
We have audited the internal financial controls with reference to the Standalone
Financial Statements of
Innovassynth Investments Limited ("the Company") as of March 31, 2023 in
conjunction with our audit of the
Standalone Financial Statements of the Company for the year ended on that date.
In our opinion, the Company has, in all material respects, adequate internal financial
controls with reference to standalone financial statements and such internal financial
controls with reference to standalone financial statements were operating effectively as
at March 31, 2023, based on the internal control with reference to standalone financial
statements criteria established by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI) (the
"Guidance Note").
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal controls over financial reporting criteria
established by the Company considering the essential components of internal controls
stated in the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the Institute of Chartered Accountants of India. 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 its business, including adherence to 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.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls with reference to the Standalone Financial Statements based on our audit. We
conducted our audit in accordance with the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting (the
"Guidance Note") and the Standards on Auditing, to the extent applicable to an
audit of internal financial controls, both issued by the Institute of Chartered
Accountants of India. 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 internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls with reference to the Standalone Financial Statements and
their operating effectiveness. Our audit of internal financial controls with reference to
the Standalone Financial Statements included obtaining an understanding of internal
financial controls with reference to the Standalone Financial Statements, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal controls based on the assessed risk. The procedures selected
depend on the auditors judgement, including the assessment of the risks of material
misstatement of the Standalone Financial Statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls with
reference to the Standalone Financial Statements.
Meaning of Internal Financial Controls with reference to Standalone Financial
Statements
A companys internal financial controls with reference to the Standalone Financial
Statements is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of Standalone Financial Statements for external
purposes in accordance with generally accepted accounting principles. A companys internal
financial controls with reference to the Standalone Financial Statements includes 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 Standalone 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 Standalone Financial Statements.
Inherent Limitations of Internal Financial Controls with reference to Standalone
Financial Statements
Because of the inherent limitations of internal financial controls with reference to
the Standalone Financial Statements, 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 internal financial
controls with reference to the Standalone Financial Statements to future periods are
subject to the risk that the internal financial controls with reference to the Standalone
Financial Statements may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
For P G BHAGWAT LLP
Chartered Accountants FRN: 101118W/W100682
Shriniwas Shreeram Gadgil
Partner
Membership Number: 120570
Place: Mumbai Date: 29th May 2023
UDIN: 23120570BGUEGQ1039
+91-9892691696
