The Members of Frontline Corporation Limited
Report on the Standalone Indian Accounting Standard (Ind AS) Financial Statements
We have audited the accompanying standalone financial statements of FRONTLINECORPORATION LIMITED ("the Company") which comprise the Balance Sheet as atMarch 31 2018 the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow Statement and the Statement of Changes in Equity for the year then ended thecash flow statement for the year then ended and a summary of significant accountingpolicies and other explanatory information.
Management's Responsibility for the Standalone Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the "Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including Other Comprehensive Income cashflows and Changes in Equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Companies Act 2013 read with the Companies (Indian Accounting Standards)Rules 2015 as amended.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the 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 Standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error which have been used for thepurpose of preparation of the financial statements by the Directors of the Company asaforesaid.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit of the Standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act and other applicableauthoritative pronouncements issued by the Institute of Chartered Accountants of India.Those Standards and pronouncements require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the standalone IndAS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone Ind AS financial statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the standalone Ind AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the standalone Ind AS financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstancesbut not for the purpose of expressing an opinion on whether the Company has in place anadequate internal financial controls system over financial reporting and the operatingeffectiveness of such controls. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theCompany's board of directors as well as evaluating the overall presentation of thestandalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.
Basis for Qualified Opinion
Note No. 6 regarding physical possession and selling of Land &Building taken by Punjab and Sind Bank.
Note No. 6 and 37.8 for Demand Notice issued by UCO Bank and J&K bank byvirtue of which some fixed assets details of which are given in detailed note of fixedassets have been symbolically possessed by the bank.
Reference is invited Note No. 37.8 to the financial statements regardingcorporate guarantee given by the company for credit facilities to Fairdeal SuppliesLimited a group company and non-compliance of Section 295 of the companies Act 1956.
Non Provision of Interest of Rs. 50341942/- on Cash Credit and Packing Creditfacilities availed from Punjab & Sindh Bank for current year as account declared asNPA(Non Performing Assets).
Reference is invited Note No. 17 to the financial statements according to whichan amount of Rs. Rs. 53644817/- (Previous year Rs. Rs. 59657498/-) is outstandingwhich has been given to M/s. Gateway Commodities (P) Ltd. as loans. The management hasexplained that such loans have been given in the normal course of business. As perinformation made available to us and explanation given Rs. 6012681/- (previous year Rs.5399081) have been recovered / adjusted during the current financial year. Themanagement based on internal assessments and evaluations have represented that thebalance outstanding advances are still recoverable/ adjustable and that no accrual fordiminution of advances is necessary as at balance sheet date. The management has furtherrepresented that as significant amounts have been recovered/adjusted during the previousand current financial year and since constructive and sincere efforts are being put in forrecovery of the said advances they are confident of appropriately adjusting / recoveringsignificant portions of the remaining outstanding balance of such amounts in theforeseeable future. However we are unable to ascertain whether all the remainingoutstanding advances as above are fully recoverable / adjustable since the outstandingbalances as at balance sheet date are outstanding for a long period of time and furtherthat neither the amount recovered nor interest provided on such long outstanding amountsin the current year consequently we are unable to ascertain whether all of the remainingbalances as at balance sheet date are fully recoverable. Accordingly we are unable toascertain the impact if any that may arise in case any of these remaining advances aresubsequently determined to be doubtful of recovery.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the basis for qualifiedopinion paragraph noted below the aforesaid standalone Ind AS financial statements givethe information required by the Act in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India:
(a) In the case of Balance Sheet of the state of affairs of the company as at 31stMarch 2018;
(b) In the case of Statement of Profit & Loss (including other ComprehensiveIncome) of the profit
for the year ended on that date;
(c) In the case of Cash Flow Statement of the cash flows for the year ended on thatdate.
(d) In the case of Changes in Equity for the year ended on that date.
Emphasis of Matter
We draw attention to the following matters in the Notes of the accompanying financialstatement:
1. Non availability of balance confirmation from major suppliers and Customers and somebank accounts.
2. Non-provision of interest on NPA accounts of banks of Rs 3714. Lakhs. The exactamounts of the said non provisions are not determined and accounted by the company
Our opinion is not modified with respect to the above matters as listed under Emphasisof Matter.
Report on Other Legal and Regulatory Requirements
1. As required by section 143(3) of the Act based on our audit we report to theextent applicable that:
a) We have sought and obtained all the information and explanations which to be best ofour knowledge and belief were necessary for the purpose of our Audit;
b) In our opinion proper books of account except for the effects of the matterdescribed in Basis for qualified opinion paragraph above as required by law have been keptby the company so far as it appears from our examination of those books;
c) The Balance Sheet and the Statement of Profit and Loss (including OtherComprehensive Income) the statement of cash flow and the Statement of Changes in Equitydealt with this Report are in agreement with the books of Accounts;
d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards specified under section 133 of the act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended;
e) In our opinion there are no observations or comments on the financial transactionswhich may have an adverse effect on the functioning of the company except as stated above;
f) On the basis of the written representations received from the directors as on31-03-2018 and taken on record by the Board of Directors we report that none of thedirectors is disqualified as on 31st March 2018 from being appointed as a Director interms of section 164(2) of the Act;
g) 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-A; our report express an unmodified opinion on the adequacyand operating effectiveness of the Company's internal financial controls over financialreporting; and
h) 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:
a. the Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements (Refer Note to 37.8 the Ind ASfinancial statements );
b. the company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses; and
c. there has been no delay in transferring amounts required to be transferred to theInvestors Education and Protection Fund by the Company; and
d. The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2018.
2. As required by 'the Companies (Auditor's Report) Order 2016' issued by the CentralGovernment of India in terms of sub-section (11) of Section 143 of the Act (hereinafterreferred to as the "Order") and on the basis of such checks of the books andrecords of the Company as we considered appropriate and according to the information andexplanations given to us we give in the "Annexure - B" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
| ||For Paresh Thothawala & Co. |
| ||Chartered Accountants |
| ||Firm Reg. No. 114777W |
| ||CA Paresh K Thothawala |
|Date: 14th June 2018 ||Partner |
|Place: Ahmedabad ||Membership No.048435 |