Jasch Industries Limited (CIN : L24302DL1985PLC383771)
Opinion
We have audited the accompanied standalone financial statements of Jasch Industries Ltd. (hereinafter referred to as “the Company"), which comprise the standalone Balance Sheet as at 31st March 2024, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year ended, on that date and a summary of the material 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 the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024 and its profit, total comprehensive income, changes in equity and its 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 Auditor's 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 (“ICAI") 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 made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
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 of the current period. 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. We have determined the matters described below to be the key matters to be communicated in our report.
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Key Audit Matters
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Auditor's Response
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1. Revenue recognition as per Ind AS 115
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Our principal audit procedures included the following :
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Refer Note -22, (Revenue from operations) to the
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-We evaluated the design and tested operating
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standalone financial statements.
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effectiveness of the relevant controls with respect to revenue recognition including those relating to cut off at
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The Company's revenue is principally derived from sale of Synthetic Leather products.
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year end;
- We performed substantive testing of revenue
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In accordance with Ind AS 115, revenue from sale
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transactions, recorded during the year by testing the
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of goods is recognized when control of the
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underlying documents which included goods dispatch
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products being sold is transferred to the customer
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notes, shipping documents and customer
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and when there are no unfulfilled obligations. The performance obligations in the contracts are
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acknowledgments, as applicable;
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fulfilled at the time of dispatch, delivery or upon
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- We tested manual journal entries posted to revenue to
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formal customer acceptance depending on terms
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identify unusual items; We tested, on a sample basis,
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of contract with the customer. Revenue is
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specific revenue transactions recorded before and after
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measured at fair value of the consideration
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the financial year end date including examination of credit
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received or receivable after deduction of any
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notes issued after the year end to determine whether the
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trade/volume discounts and taxes or duties
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revenue has been recognized int the appropriate financial
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collected.
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period.
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We identified revenue recognition as a key audit
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- We performed analytical review procedures which
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matter since revenue is significant to the
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included product-wise revenue analysis, comparison of
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standalone financial statements and is required to
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the gross margin to sales ratio for the current year with
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be recognized as per the requirements of
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figures for the previous year, and reconciliation with GST
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applicable accounting framework.
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returns and GST payments for the year. These procedures helped ensure the accuracy and consistency of the revenue for the year.
- Cut off procedures, subsequent event, analytical review procedures, testing management assumptions / estimates
Our principal audit procedures included the following :
We draw attention to Note No. 38 to the Standalone
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2. Demerger of the Company pursuant to the
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Financial Statements, which describes the approval of
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Scheme of Arrangement
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application under section 230 to 237 filed by the Company with Hon'ble NCLT, Delhi Bench , the scheme of
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Members of the Company at their meeting held on
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arrangement for transfer of Gauging Business to New
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July 24, 2021 have approved restructuring /
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wholly owned Subsidiary Company namely Jasch Gauging
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demerging of the Company's wholly owned
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Technologies Limited. Final order by the Hon'ble National
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subsidiary, Jasch Gauging Technologies Limited
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Company Law Tribunal (NCLT). dated 12 September 2023
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('JGTL').
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has made the scheme effective from closing hours of 30th
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Pursuant to the Scheme, has been approved by NCLT Delhi with effect from 30 September 2023,
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September 2023.
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the Company, has identified moveable and immoveable assets and liabilities to be
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Our principal audit procedures included the following:
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transferred to and vested in the wholly owned
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- We read and examined the scheme of amalgamation and
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subsidiary of the Company, namely, Jasch Gauging
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arrangement pursuant to which demerger was carried out
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Technologies Limited (JGTL) as a going concern . The Company has prepared these Financial
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along with regulatory approvals required for the scheme to take effect.
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Statements to give effect to the Scheme of
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• We have assessed the adequacy and appropriateness of
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Arrangement of demerger of the specified
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the disclosures around
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business of the Company into JGTL, with an
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selection of method of accounting for this transaction in
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appointed date of April 01, 2022 per the NCLT
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accordance with the
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order. In accordance with the requirements of IND AS 105 - Non-current Assets Held for Sale and Discontinued Operations, the comparative,
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Indian accounting standards.
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reported figures for the year ended March 31, 2023
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and as at April 1, 2022, have been restated as if the
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business combination had occurred from the
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beginning of the preceding period i.e. April 1,
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2022, to incorporate the impact of the demerger in
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accordance with the Scheme of Arrangement.
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As a result of the above, with possible effects on
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financial performance including revenue and
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profit, along with asset distribution and
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restatement of previous year numbers, we
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identified Demerqer as a Key Audit Matter.
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Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors are responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards report including Annexures to Board's Report, Business Responsibility and Sustainability Report, Corporate Governance and Shareholder's Information, but does not include the consolidated financial statements, standalone financial statements and our auditor’s report thereon.
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 during the course of our audit otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is an material misstatement of this other information, we are required to report that fact, We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company's 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 financial position, financial performance, including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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, Management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors is also responsible for overseeing the Company's financial reporting process.
Auditor's 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 auditor's 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 scepticism 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 with reference to standalone financial statements 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 the Management.
• Conclude on the appropriateness of Management's 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 Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's 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 auditor's 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.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, make it probable that the economic discission of a reasonably acknowledgeable user of the standalone financial statement may be influenced. We considered 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 standalone 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.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's 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.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor's Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the 'Annexure B', 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, based on our audit 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 Standalone Balance Sheet, the Standalone Statement of Profit and |oss (including other comprehensive income), Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows 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 Ind AS specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024 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 Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls with reference to Standalone Financial Statements.
B. With respect to the other matters to be included in the Auditor's Report in accordance with requirement of section 197 (16) of the Act, as amended, in our opinion and to the best of our information and according to explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
C. With respect to the other matters to be included in the Auditor's Report in accordance with requirement of section 197 (16) of the Act, as amended. In our opinion and to the best of our information and according to explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements - Refer Note 37 to the Standalone Financial Statements;
(ii) The Company did not have any long-term derivative contracts for which there were no foreseeable losses;
(iii) The Company did not have any amount required to be transferred to the Investor Education and Protection Fund.
(iv) (a) The Management has represented that, to the best of its knowledge and belief, no funds have (which are material either individually or in aggregate) 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, 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, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("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
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
(v) The Company has not declared/paid any dividend during the year and subsequent to the year-end.
(vi) Based on our examination which included test checks, the Company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, as amended is applicable for the Company only w.e.f. 1 April 2023, therefore, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, as amended, on preservation of audit trail as per the statutory requirements for record retention is not applicable for financial year ended 31 March 2024.
For Arora & Choudhary Associates.
Chartered Accountants (Firm Registration No. 003870N)
CA. Vijay Kumar Choudhary Partner
(Membership No. 081843)
UDIN: 24081843BKBFVT8276
Place: New Delhi Date : 30.05.2024
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