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Innovative Ideals and Services India Ltd Auditor Reports

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Innovative Ideals and Services India Ltd Share Price Auditors Report

To,

The Members of

Innovative Ideals and Services (India) Limited

Mumbai, Maharastra-400104

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of Innovative Ideals and Services (India) Limited (the Company) which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss and the Cash Flow Statement for the period ended on March 31, 2023, and a summary of significant accounting policies and other explanatory information. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph of our report, the aforesaid standalone financial statements give the information required by the provisions of Companies 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 March 31, 2023, and losses, and its cash flows for the period ended on that date.

Basis for Qualified opinion

We draw attention to the matters to valuation of inventory, the effect of misstatement and possible effect of undetected misstatement on the financial statement due to inability to obtain sufficient and appropriate audit evidence which are material but not pervasive in nature either individually or in aggregate. The companys inventories are carried in Balance Sheet at Rs. 683.53 Lakhs has not stated by the management at the lower of cost or net realizable value but has stated them solely at cost which constitutes departure from the Accounting standard prescribed under section 133 of the Companies Act, 2013. However in the absence of sufficient audit evidence and Physical Verification the impact of the above qualification on the standalone financial statement, if any, is not ascertainable hence we are unable to comment on the effect of the same on financial statement of the company.

Other Matter

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 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 qualified opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, 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 those matters.

We have determined the matters described below to be the Key Audit Matters to be communicated in our Report:

The Company has filed Suit for the recovery of amounting to Rs. 74.20 Lakhs which is included in other receivable under the head "Other Non- Current Assets" shown in the Financial Statement stated as disputed Trade Debtors and all the matters is currently pending in the respective court, the material suit filed by the company are as follows:

1. Suit No 2374 of 2013 before Bombay City Civil Court, Mumbai amounting to 56.16 Lakhs against Pebble Bay Developers Private Limited, Dated 01/08/2013.

2. Suit No. 807 of 2017 under order XXXVII of the City Civil Procedure Code, 1908 before Bombay City Civil Court, Mumbai amounting to 8.82 Lakhs against Kalpataru Properties Private Limited.

3. Suit No. 369 of 2021 before Bombay City Civil Court, Mumbai amounting to 7.44 lakhs against Kalpataru Properties Private Limited.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Boards Report including Annexures to Boards Report and Shareholders Information, but does not include the standalone financial statements and our auditors report thereon. The Boards Report including Annexures to Boards Report is expected to be made available to us after the date of this auditors report.

Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Boards Report including Annexure to Boards 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 Standalone 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 standalone 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. 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 statement 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, 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.

The Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for Audit of Standalone Financial Statement

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

A. 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.

B. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

C. 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.

D. 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.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("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. Except for the matters described in the Basis for Qualified paragraph 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. Except for the matters described in the Qualified Opinion paragraph in our opinion, proper books of account, as required by the law, have been kept by the Company, so far as 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. Except for the matters described in the Qualified Opinion paragraph in our opinion, the aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014;

e. The matters described under the basis for Qualified Opinion paragraph above in our opinion, may have an adverse effect on functioning of the Company and on the amounts disclosed in standalone financial statement of Company;

f. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above;

g. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure B; and

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:

i. The Company has disclosed the impact of pending litigation as at March 31, 2023 on its financial position in its financial statements Refer Note 25 to the financial statements.

ii. The Company did not have any long-term contracts including derivative contract; as such the question of commenting on any material foreseeable losses thereon does not arise.

iii. There has not been an occasion in case of the Company during the period under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring such sums does not arise.

iv. a) The management has represented that, to the best of its knowledge and belief, as disclosed in to the accounts, 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 persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or

Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

b) The management has represented, that, to the best of its knowledge and belief, as disclosed in the accounts, no funds have been received by the company form any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:

Directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or Provide any guarantee, security or the like form or on behalf of the Ultimate Beneficiaries.

c) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representation sub-clause (i) and (ii) of Rule 11, as provided under (a) and (b) above, contain any material misstatement.

v. There has no dividend or paid during the period ended 31st March, 2023 by the Company hence is in compliance with section 123 of the Act is not arise.

i. With respect to the matter to be included in the Auditors Report under Section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, remuneration paid by the Company to its directions during the current period is in accordance with the provision of section 197 of the Act.

"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 statement of the Company for the period ended March 31, 2023:

I. In respect of Property, Plant, Equipment and intangible Assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant, Equipment and intangible Assets;

b) The major Property, Plant & Equipment of the Company have been physically verified by the management at reasonable interval during the year and no material discrepancies were noticed on such verification.

c) The Company has not revalued its Property, Plant and Equipment and intangible assets during the year. Accordingly, the reporting under clause 3(i) (d) of the Order is not applicable to the company.

d) Based on the information and explanation furnished to us, no proceedings have been initiated on or are pending against the company for holding Benami property under Benami Transactions (Prohibitions) Act, 1988 (as amended in 2016) (formerly the Benami Transaction (Prohibition) Act, 1998(45 of 1988) and Rules made thereunder, and therefore the question of our commenting on whether the company has appropriately disclosed the details in its standalone financial statements does not arise.

II. Inventory:

a) The physical verification of inventory (excluding stock with third parties) has been conducted at reasonable intervals by the Management during the year and, in our opinion, the coverage and procedures of such verification by Management is appropriate. The discrepancies noticed on physical verification of inventory as compared to book records were not 10% or more in aggregate for each class of Inventory, except the matter disclosed in Basis for Qualified Opinion.

b) During the year, the Company has been sanctioned working capital limits in excess of ‘5 Crores, in aggregate, from banks on the basis of security of current assets. The Company has filed quarterly returns or statements with such banks, which are in aggregate with the books of account other than those as set out in Annexure 1;

III. Loans given by the Company:

Based on information and explanation furnished to us, the Company has not provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to Companies, Firms, Limited Liability Partnership or any other parties, during the year. The company has not made investments in, Companies, Firms, Limited Liability Partnership or any other parties, during the year.

IV. Loans to Directors & Investment by the Company:

According to information and explanation given to us, the company has no loans, investments, guarantee or security where provision of section 185 and 186 of the Companies Act, 2013 are to be complied with.

V. Deposits:

The Company has not accepted any deposits or amounts which are deemed to be deposits within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

VI. Cost Records:

To the best of our knowledge and belief, the Central Government has not specified maintenance of cost records under sub-section (1) of section 148 of the Act, in respect of Companys products/ Services. Accordingly, the provisions of clause 3(vi) of the order are not applicable.

VII. Statutory Dues:

a) According to information and explanation given to us and on basis of our examination of the books of accounts, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Goods and Services Tax, Duty of Customs, Duty of Excise, Cess and any other statutory dues with the appropriate authorities except as mentioned below:

Name of the Statute Nature of Dues Amount (Rs.in Lakhs) Period to which the amount relates Due Date of Payment Date of Payment
1.17 April 22 15th May, 2022 9th February, 2023
1.17 May 22 15th June, 2022 9th February, 2023
1.22 June 22 15th July, 2022 9th February, 2023
1.22 July 22 15th August, 2022 9th February, 2023
1.21 August 22 15th September, 2022 9th February, 2023
EPF & MP Act,1952 Provident Contribution 1.17 September 22 15th October, 2022 4th May, 2023
1.07 October 22 15th November, 2022 -
1.03 November 22 15th December, 2022 -
1.03 December 22 15th January, 2023 -
1.03 January 23 15th February, 2023 -
0.95 February 23 15th March, 2023 4th May, 2023
0.93 March 23 15th April, 2023 -
0.41 April 21 7th May, 2021 23rd August, 2022
0.21 April 21 7th May, 2021 28th July, 2022
0.27 May 21 7th June, 2021 28th July, 2022
Tax Deducted at Source 0.90 May 21 7th June, 2021 23rd August, 2022
0.28 June 21 7th July, 2021 28th July, 2022
Income Tax Act, 1961
0.90 June 21 7th July, 2021 23rd August, 2022
0.31 July 21 7th August, 2021 29th July, 2022
0.90 July 21 7th August, 2021 23rd August, 2022
0.42 August 21 7th September, 2021 29th July, 2022
0.60 August 21 7th September, 2021 23rd August, 2022
0.86 September 21 7th October, 2021 29th July, 2022
0.60 September 21 7th October, 2021 23rd August, 2022
0.18 October 21 7th November, 2021 29th July, 2022
0.60 October 21 7th November, 2021 23rd August, 2022
0.13 November 21 7th December, 2021 29th July, 2022
0.60 November 21 7th December, 2021 23rd August, 2022
0.31 December 21 7th January, 2022 29th July, 2022
0.67 January 22 7th February, 2022 29th July, 2022
0.25 February 22 7th March, 2022 29th July, 2022
0.61 March 22 7th April, 2022 29th July, 2022
1.19 April 22 7th May, 2022 -
1.04 May 22 7th June, 2022 -
1.04 June 22 7th July, 2022 -
1.26 July 22 7th August, 2022 -
1.10 August 22 7th September, 2022 -
0.01 April 22 15th May, 2022 20th May, 2022
0.02 May 22 15th June, 2022 2nd July, 2022
0.01 June 22 15th July, 2022 12th August,2022
0.01 July 22 15th August, 2022 20th January, 2023
0.01 August 22 15th September, 2022 20th January, 2023
Employee Contribution 0.01 September 22 15th October, 2022 20th January, 2023
0.01 October 22 15th November, 2022 23rd June, 2023
0.01 November 22 15th December, 2022 23rd June, 2023
0.01 December 22 15th January, 2023 28th June, 2023
The Employees State Insurance Act, 1948 0.01 January 23 15th February, 2023 28th June, 2023
0.01 February 23 15th March, 2023 28th June, 2023
0.01 March 23 15th April, 2023 23rd June, 2023
0.06 April 22 15th May, 2022 20th May, 2022
0.07 May 22 15th June, 2022 2nd July,2022
0.06 June 22 15th July, 2022 12th August, 2022
0.06 July 22 15th August, 2022 20th January, 2023
0.06 August 22 15th September, 2022 20th January, 2023
Employer Contribution 0.05 September 22 15th October, 2022 20th January, 2023
0.05 October 22 15th November, 2022 23rd June, 2023
0.06 November 22 15th December, 2022 23rd June, 2023
0.06 December 22 15th January, 2023 28th June, 2023
0.06 January 23 15th February, 2023 28th June, 2023
0.05 February 23 15th March, 2023 28th June, 2023
0.05 March 23 15th April, 2023 23rd June, 2023

b) According to the information and explanation given to us, there are no dues of income tax, sales tax, goods & service tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute except:

Nature of Statute Nature of Dues Amount (Rs. In Lakhs) Period to which the amount relates Forum where dispute is pending
Income Tax Act, 1961 Income Tax Dues 17.70 Lakhs AY 2017-18 CPC
Income Tax Act, 1961 Income Tax Dues 195.50 Lakhs AY 2018-19 CPC
Income Tax Act, 1961 Income Tax Dues 303.79 Lakhs AY 2019-20 CPC
GST Act, 2017 ITC Mismatch 37.85 Lakhs AY-2018-19 Assistant Commissioner of GST
GST Act, 2017 ITC Mismatch 141.83 Lakhs AY-2019-20 Assistant Commissioner of GST

VIII. Unrecorded Income:

According to the information and explanations given to us and the records of the Company examined by us, there are no transactions in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

IX. Repayment of Loan:

a) According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of loans or other borrowings or in the payment of interest to any lender during the year, except as mentioned below:

Nature of borrowing, Including Debt Securities Name of the Lender Amount not paid on due date (Rs. In Lakhs) Whether principal or interest No. of Days, Delay or unpaid
Business Loan HDFC Bank 0.19 Principal 55 Days
Business Loan HDFC Bank 0.06 Interest 55 Days
Business Loan HDFC Bank 0.02 Interest 102 Days
Business Loan HDFC Bank 0.44 Principal 133 Days
Business Loan HDFC Bank 0.04 Interest 133 Days
Business Loan HDFC Bank 0.20 Principal 178 Days
Business Loan HDFC Bank 2.27 Principal Unpaid
Business Loan ICICI Bank 1.04 Principal 25 Days
Business Loan ICICI Bank 0.36 Principal 44 Days
Business Loan ICICI Bank 0.37 Principal 54 Days
Business Loan ICICI Bank 0.74 Principal 56 Days
Business Loan ICICI Bank 0.38 Principal 85 Days
Business Loan ICICI Bank 0.47 Interest 25 Days
Business Loan ICICI Bank 0.14 Interest 44 Days
Business Loan ICICI Bank 0.13 Interest 54 Days
Business Loan ICICI Bank 0.26 Interest 56 Days
Business Loan ICICI Bank 0.12 Interest 85 Days
Business Loan ICICI Bank 0.78 Principal Unpaid
Business Loan ICICI Bank 0.22 Interest Unpaid
Term Loan Bank of Maharashtra 1.41 Principal 7 Days
Term Loan Bank of Maharashtra 1.43 Principal 8 Days
Term Loan Bank of Maharashtra 1.40 Principal 18 Days
Term Loan Bank of Maharashtra 3.74 Principal 25 Days
Term Loan Bank of Maharashtra 1.28 Principal 37 Days
Term Loan Bank of Maharashtra 2.11 Principal 38 Days
Term Loan Bank of Maharashtra 0.48 Principal 49 Days
Term Loan Bank of Maharashtra 0.15 Interest 7 Days
Term Loan Bank of Maharashtra 0.60 Interest 8 Days
Term Loan Bank of Maharashtra 0.64 Interest 18 Days
Term Loan Bank of Maharashtra 0.27 Interest 37 Days
Term Loan Bank of Maharashtra 0.25 Interest 56 Days
Term Loan Bank of Maharashtra 0.80 Interest 86 Days
Term Loan Bank of Maharashtra 0.32 Interest 117 Days
Term Loan Bank of Maharashtra 0.35 Interest 145 Days
Term Loan Bank of Maharashtra 0.35 Interest 176 Days
Term Loan Bank of Maharashtra 0.34 Interest 207 Days
Term Loan Bank of Maharashtra 0.06 Interest 237 Days
Term Loan Bank of Maharashtra 186.93 Principal Unpaid
Term Loan Bank of Maharashtra 1.33 Interest Unpaid

(Note: The Amounts which are delayed or unpaid as shown above are calculated based on Repayment Schedule issued at the time of Sanction of the respective Loans provided by the management of the Company. We have asked the further information from the company related to loan repayment multiple times. As we have not received any information from the company, we are not able to comment on the same.)

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 Willful 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, term loans which were applied for the purpose for which the loans 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 standalone financial statements of the Company, we report that the Company has not used funds raised on short-term basis for the long-term purposes.

e) According to the information and explanations 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 any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

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. Utilization of IPO & FPO and Private Placement and Preferential issues:

a) The Company has not raised any money by way of initial public offer and through debt instruments by way of further public offer during the year.

b) According to the information and explanation given to us, the company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year.

xi. Reporting of Fraud:

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 material 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, no report under Section 143(12) of the Act, in Form ADT-4, as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 has been filed with the Central Government. Accordingly, the reporting under Clause 3(xi)(b) of the Order is not applicable to the Company.

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, the Company has not received whistle-blower complaints during the year, which have been considered by us for any bearing on our audit and reporting.

XII. NIDHI Company:

As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the reporting under Clause 3(xii) of the Order is not applicable to the Company.

XIII. Related Party Transaction:

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 such related party transactions have been disclosed in the standalone financial statements as required under Accounting Standard 18 "Related Party Disclosures" specified under Section 133 of the Act.

XIV. Internal Audit

a. According to the information and explanations given to us, the company has an internal audit system commensurate with the size and nature of its business.

b. We have considered the reports of the Internal Auditors for the period under audit.

XV. Non-Cash Transaction:

The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the reporting on compliance with the provisions of Section 192 of the Act under Clause 3(xv) of the Order is not applicable to the Company.

XVI. Register under RBI Act, 1934:

In our opinion, the Company is not required to be registered under section 45 - IA of the Reserve Bank of India Act, 1934. Hence, reporting under clause 3(xvi) (a), (b), (c) and (d) of the Order is not applicable.

XVII. Cash Losses

The Company has incurred cash losses in the financial year of Rs. 963.31 Lakhs as per the standalone audited financial statement.

XVIII. Auditors resignation

There has been no resignation of the statutory auditors during the year, accordingly this clause is not applicable.

XIX. Financial Position

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 standalone financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that the 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, except in the current Financial Year 2022-23, Company was not able to pay debts of some Loans due to which the Company has been declared as NPA (Non-Performing Asset) by Banks. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

XX. Corporate Social Responsibility

The Provision of Section 135 of the Companies Act 2013 in relation to Corporate Social Responsibility are not applicable to the Company during the year and hence reporting under this clause is not applicable.

"Annexure B" to the Independent Auditors Report of even date on the Financial Statements of Innovative Ideal and Services (India) Limited.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Innovative Ideals and Services (India) Limited ("the Company") as of March 31, 2023 in conjunction with our audit of the financial statements of the Company for the period ended on that date.

Managements Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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. 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 respective 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 Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company 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") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 judgment, including the assessment of the risks of material misstatement of the 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 internal financial controls system over financial reporting of the Company.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting 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 internal financial control over financial reporting 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 financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, 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 over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2023, except valuation of Inventory, based on the internal control over financial reporting 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.

For Keyur Shah & Co.
Chartered Accountants
FRN.: 141173W
Keyur Shah
Proprietor
Membership No.: 153774 Date: 30th May, 2023
UDIN :- 23153774BGWLVQ8112 Place: Ahmedabad

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