To the Members of AminTannery Limited
Report on the Audit of Financial Statements
We have audited the financial statements of Amin Tannery Limited ("theCompany") which comprise the balance sheet as at 31st March 2019 and the Statementof Profit and Loss (including other comprehensive income) and statement of cash flows andthe statement of change in equity for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation. In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 (the Act) in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and its profit(including othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
Description of Key Audit Matter
Accuracy of revenue recognition measurement presentationand disclosures in view ofadoption of Ind AS 115 "Revenue from contract with customers"
Revenue is measured net of rebate &discounts and returns if any.Due to theCompany's presence across different marketing regions within the country and outsidethecompetitive business environment the revenue recognition requires certain key judgmentsrelating to identification of performance obligation determination of transaction priceand appropriateness of the basis used to measure the revenue. (refer notes 1 (B) (27) and20 to the Financial Statements)
How the matter was addressed in our audit
Our audit approach consisted testing of design and operating effectiveness of internalcontrols procedures and included:
Evaluating the design of internal controls relating to implementation of newaccounting standard.
Assessing the appropriateness of the revenue recognition accounting policiesincluding those relating to discounts and rebates.
Checking of completeness and accuracy of the data used by the management for thepurpose of purpose of revenue recognition including calculation of the discounts rebatesand incentives and for sales returns and checking of its arithmetical accuracy.
Comparison between the estimates in the past with subsequent actuals andanalysis of the nature of any deviations to corroborate the effectiveness of themanagement estimation process.
Performing analytical procedures for reasonableness of revenue disclosed.
Considered the adequacy of the Company's disclosures in respect of revenue.
Information Other than the Financial Statements and Auditors' Report Thereon
The Company's Board of Directors are responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and ourauditors' report thereon.
Our opinion on the financialstatements does not cover the other information and we donotexpress any form of assurance conclusion thereon.
In connection with our audit of the financialstatements our responsibility is to readthe other information andin doing so consider whether the other information ismateriallyinconsistent with the financial statements or ourknowledge obtained in the auditor otherwise appears to bematerially misstated. If based on the work we have performedweconclude that there is a material misstatement of this otherinformation we are requiredto report that fact. We have nothingto report in this regard.
Responsibility of Management for Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Actwith respect to the preparation of these financial statements that give atrue and fair view of the financial position financial performance change in equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateimplementation and maintenance of accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error. In preparing the financial statementsmanagement is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe 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 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 and on the basis of such checks of the books and records of thecompany as we considered appropriate and according to information and explanations givento us we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under Section 197 read with Schedule V to the Act.
3. Further to our comments in Annexure A as required by Section 143(3) of the Act wereport that:
(a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books;
(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the statement of Cash Flowsand statement of change in equitydealt with by thisReport are in agreement with the books of account;
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
(e) On the basis of the written representations received from the directors as of March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. the Company does not have any pending litigations which would impact its financialposition - Refer Note no. 30 to the financial statements;
ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and
iii. there were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from November 08 2016 to December 30 2016which are not relevant to these financial statements. Hence reporting under this clauseis not applicable. (Referred to in paragraph 1 of our report of even date on the Ind ASfinancial statements for the financial year ended March 31 2019 of Amin Tannery Limited)
In terms of the information and explanations given to us and also on the basis of suchchecks as we considered appropriate we state that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) All the fixed assets have not been physically verified by the management during theyear but there is regular program of physical verification which in our opinion isreasonable having regard to the size of the Company and the nature of fixed assets. Nomaterial discrepancies have been noticed in respect of the assets physically verifiedduring the year.
(c) Immovable properties having carrying amount as at March 31 2019 aggregating to Rs.62.04 Lacs transferred to the company pursuant to the Scheme of Arrangement (Demerger)from Demerged Company approved by the National Company Law Tribunal Allahabad Bench(NCLT) vide Order dated December 27 2017 included in the books of the company remain inthe name of Demerged Company pending completion of the certain formalities. (refer Noteno. 40).
(ii) The inventories of the Company have been physically verified by the management atregular interval during the year. In our opinion the frequency of verification isreasonable. As explained to us the discrepancies noticed on verification were notmaterial in relation to the operations of the Company.
(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships or other parties listed in the register maintained underSection 189 of the Companies Act 2013 (the Act).
(iv) The Company has complied with the provisions of Sections 185 and 186 of the Act inrespect of grant of loans making investments and providing guarantees and securities asapplicable.
(v) In our opinion the Company has not accepted any deposit during the year within themeaning of Section 73 to Section 76 of the Companies Act 2013 (the Act) read with theRules framed there under. Hence paragraph 3(v) of the Order is not applicable.
(vi) Having regard to the nature of the Company's business / activities themaintenance of cost records has not been specified by the Central Government under section148(1) of the Act. Accordingly reporting under clause
(vi) of paragraph 3 of the Order is not applicable.
(vii) (a) According to the books and records produced and examined by us the Companyis generally regular in depositing undisputed Statutory dues including Provident FundEmployees' State Insurance Income Tax Sales Tax Service Tax Duty of Customs Duty ofExcise Value Added Tax Goods and Services Tax (GST) Cess and other material statutorydues as applicable with the appropriate authorities and no undisputed amount payable inrespect of aforesaid statutory dues were outstanding as at March 31 2019 for a period ofmore than six months from the date they become payable.
(b) According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Service Tax Duty of Customs Duty of Excise Value Added Tax andGST which have not been deposited on account of any dispute.
(viii) The company has not defaulted in repayment of loans or borrowings to a financialinstitution bank government or dues to debenture holders during the year.
(ix) The company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) or term loan during the year.
(x) Based on the audit procedures performed and according to the information andexplanations given to us no material fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
(xi) In our opinion the managerial remuneration paid or provided by the company is inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act.
(xii) The company is not a "Nidhi Company"; hence paragraph 3(xii) the Orderis not applicable.
(xiii) In our opinion transactions with the related parties are in compliance withsection 177 and 188 of Act where applicable and the details of such transactions have beendisclosed in the Ind AS Financial Statements as required by the applicable accountingstandards.
(xiv) The company has not made preferential allotment or private placement of shares orfully or partly convertible debentures during the year under review. Hence paragraph3(xiv) the Order is not applicable.
(xv) In our opinion the company has not entered into any non-cash transactions withdirectors or persons connected with him. Hence paragraph 3(xv) the Order is notapplicable.
(xvi) In our opinion the company is not required to be registered under Section 45 IAof the Reserve Bank of India Act 1934.(Referred to in paragraph 3(f) of our report ofeven date on the financial statements for the financial year ended March 31 2019 of AminTannery Limited)
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls with reference to financial statementsof Amin Tannery Limited ("the Company") as of March 31 2019 in conjunction withour audit of the financial statements of the Company for the year ended on that date.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
| ||For Rajeev Prem & Associates |
| ||Chartered Accountants |
| ||Firm Registration No. 008905C |
| ||(Rajeev Kapoor) |
|Place: Kanpur ||Partner |
|Date: May 30 2019 ||M. No. 077827 |