TO THE MEMBERS OF ORIENTAL TRIMAX LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Oriental TrimexLimited('the company') which comprise the Balance Sheet as at March 31 2020 theStatement of Profit and Loss including the statement of other comprehensive income theCash Flow Statement and the Statement of Change in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe 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 31st March 2020 and its profit /(loss)(including Other Comprehensive Income) its changes in equity and its cash flows for theyear ended on that date.
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 Ind AS financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current year.These matters were addressed in the context of our audit of the Ind AS financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matters ||How the matter was addressed in the audit |
|Valuation of Property Plant & Equipment ||We were explained that the depreciation policy of the company is consistent. |
|(We refer to Note 2 to the financial statements) The Property Plant and Equipment are depreciated on the straight-line basis over the useful life of the assets considering cost and residual value of the asset. ||If there is any addition to the asset or asset is sold discarded demolished or destroyed then the calculation is made according to the date of such event. In other words if any asset is purchased or sold then the calculation is made according to the date of purchase or sold. |
|At the end of each financial year the management of the Company determines the needof the provision forimpairment loss on each class of Property Plant &Equipment. A suitable provision for an impairment loss is created whenever management thinks that the impairment loss may have occurred. ||We were further explained that the: - |
| ||a) Useful life of the asset |
| ||b) Rate of depreciation and |
| ||c) Residual value of the asset is taken for the purpose of depreciation in accordance with the exactly specified in the Schedule-II of the companies Act2013. |
|As the value of Property Plant and Equipment is Rs.454355834/- which constitutes the significant part of the total assets of the Company therefore any change in depreciation policy of the assetand making provision for impairment loss could have a substantial impact on the profit/loss in future years and on the accuracy of the financial statements. || |
| ||Our Results: |
| ||We have not identified any situation which may lead to material adjustments to the carrying value of The Property Plant and Equipment. Weobtained the Company's credit policy for trade receivables. We have examined and verified: - |
|Valuation of Trade Receivable || |
|We refer to Note 6 of the financial statements. The management of the company assesses the expected credit loss related to trade receivables at regular intervals and at the end of each financial year. The carrying amount of trade receivables of the company was Rs 403708343at March 31 2020. We concentratedon this area because of its magnitude and the degree of judgement required to estimate the expected credit loss and determining the carrying amount of trade receivables as at the closing date of the financial statements. || |
| || |
| ||a) The ageing of trade receivables. |
| ||b) Management's assessment on the credit worthiness of selected customers for trade receivables. |
| ||c) Adequacy of the provision created by the company for credit losses. |
| ||d) Supporting documents provided by management in relation |
|Valuation of Inventories ||toassessment. |
|We refer to Note 5 to the financial statements. ||Our Results: |
|Inventory alone constitute the major portion of the current assets of the company as a result of that we were more focused on the method of valuation and carrying value of the inventory. As at March 31 2020 the total carrying amount of inventories was Rs. 378113997. The assessment of impairment of inventories involves significantdegree of uncertainty assumptions and application of judgment. The management of the company reviews the inventory on regular intervals for: - ||Based on our audit procedures performed we found management's assessment of the recoverability of tradereceivables to be sufficient. We have examined: - |
| ||a) Ageing of inventory |
| ||b) History of inventory written off |
| ||c) Inventory obsolescence incidences |
| ||d) Reversal of inventory written off |
| ||Our Results: |
|a) Obsolescence of the inventory || |
| ||We had a detailed discussion with the key managerial personnelof the company and took their views on inventory valuation considering the current economic environment. In our opinion methods adopted by the management were adequate. We have formed our opinion based on facts and available evidence. |
|b) Permanent decline in net realizable value of the inventory below the cost. || |
|c) Ageing of inventory || |
|d) Turnover rate || |
|Inventory records are kept updated and allowances are recorded in the books for inventory whenever required || |
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Ind AS financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards ("Ind AS") notified under Section 133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015 as amended from time to time.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting
records relevant to the preparation and presentation of the Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the Ind AS financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so. Those Board of Directors are also responsiblefor 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 Ind AS 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 they could reasonably beexpected to influence the economic decisions of users taken on the basis of theseStandalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
a) Identify and assess the risks of material misstatement of the Standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
b) 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.
c) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
d) 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 Standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
e) Evaluate the overall presentation structure and content of the Standalone financialstatements including the disclosures and whether the Standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the 'Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act we report that:
a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose 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 and the Statement of Profit and Loss including other comprehensiveincome the Cash Flow statement and the statement of changes in equity dealt with by thisReport are in agreement with the books of account;
d. In our opinion the aforesaid Ind AS financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 Companies (Indian Accounting Standards) Rules 2015 as amendedfrom time to time;
e. On the basis of written representations received from the directors as on March 312020 taken on record by the Board of Directors none of the directors is disqualified ason March 312020 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"; and
g. In our opinion the remuneration paid /provided by the Company to its directorsduring the year is in accordance with the provisions of section 197 (16) of the Act.
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 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 litigations which would impact itsfinancial position-Refer Note 23(1)(a).
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
|For S. Agarwal & Co. || |
|Chartered Accountants || |
|FRN: 000808N || |
| ||B. S. Chaudhary |
|Place: New Delhi ||(Partner) |
|Date: 31-07-2020 UDIN:2040600AAAAAL1623 ||M. No.406200 |
"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 statements
of the Company for the year ended March 312020:
1) (a) The Company has maintained proper records showing full particulars
including quantitative details and situation of property plants and equipment;
(b) The property plants and equipment have been physically verified by the managementat reasonable interval and no material discrepancies between the books records and thephysicalproperty plants and equipment have been noticed.
(c) The title deeds of all immovable properties are held in the name of company.
2) The management has conducted physical verification of inventories during the year atreasonable interval except two units of the company as on 31.03.2020 due to Covid-19 andno material discrepancies were noticed on such physical verification.
3) The Company has not granted any loans secured or unsecured loans to companiesfirms limited liability partnership or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clause 3(iii)(a) to (c) ofthe order are not applicable to the Company and hence not commented upon.
4) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013In respect of loans investments guarantees and security.
5) The Company has not accepted any deposits from the public within the meanings ofsection 73 to 76 of the Act and the rules framed thereunder to the extent notified.
6) As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the company.
7) (a) According to information and explanations given to us and on the basis
of our examination of the books of account and records the Company has been generallyregular in depositing undisputed statutory dues including Income-Tax Goods and ServiceTax Duty of Customs Cess and any other statutory dues with the appropriate authoritiesexcept statuary dues as per details given below. According to the information andexplanations given to us undisputed amounts payable in respect of the above were inarrears as at March 31 2020 for a period of more than six months from the date theybecome payable is given as under:
|Nature of statutory Dues ||Year ended ||Year ended |
| ||31.03.2020 ||31.03.2019. |
| ||(Rs. in lacs) ||(Rs. in lacs) |
|Provident fund ||24.41 ||26.61 |
|Employee State Insurance ||4.42 ||3.55 |
|Income Tax/TDS ||115.31 ||114.52 |
|Sales Tax ||87.85 ||152.11 |
|Other Dues ||5.77 ||5.29 |
| ||237.76 ||301.08 |
(b) According to the information and explanation given to us the dues of outstandingincome tax Goods and Service Tax duty of customs outstanding on account of any disputeare as follows:
|PARTICULARS ||Amount ||Forum |
| || ||(Rs. in Lacs) |
|Sales Tax (Tax /Penalty/Interest) TDS( short deduction/interest/ ||36.21 ||Commissioner Appeal |
|Penalty for late deposit of TDS) ||112.85 ||Commissioner Appeal |
|Custom Duty ( Tax/Penalty/Interest) ||22.90 ||Tribunal |
8) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans.
9) Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer.
10) Based upon the audit procedures performed and the information and explanationsgiven to us by the management we report that no fraud by the Company or on the company byits officers or employees has been noticed or reported during the Period.
11) The Company has paid/provided for managerial remuneration in accordance with theprovisions of section 197 read with Schedule V to the Act 2013.
12) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
13) According to the information and explanations given by the management and based onour examination of the records of the Company transactions with the related parties arein compliance with section 177 and 188 of the Companies Act 2013 where applicable anddetails for the same have been disclosed in the standalone financial statements asrequired by the applicable Indian accounting standards.
14) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made preferential allotment or privateplacement of shares partly convertible debentures during the Period under review.
15) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him.
16) In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934.
| ||For S. Agarwal & Co. |
| ||Chartered Accountants |
| ||FRN: 000808N |
| ||B.S. Chaudhary |
|Place: New Delhi ||(Partner) |
|Date: 31.07.2020 ||M. No. 406200 |
| ||UDIN:20406200AAAAAL1623 |
"Annexure B" to the Independent Auditors' Report
(Referred to in paragraph 2(f) of the independent auditor's report of even date on thefinancial statements of the company for the year ended March 31 2020.)
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 over financial reporting of OrientalTrimex Limited("the Company") as of March 31 2020 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company are responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the "Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting" (the "Guidance Note") issued by the Institute ofChartered Accountants of India ("ICAI"). These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the
safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required 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 to the extent applicable to an auditof internal financial controls both issued by the Institute of Chartered Accountants ofIndia and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors' judgement including the assessment of the risks of materialmisstatement 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.
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 312020 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.
| ||For S. Agarwal & Co. |
| ||Chartered Accountants |
| ||FRN: 000808N |
| ||B.S. Chaudhary |
|Place: New Delhi ||(Partner) |
|Date: 31.07.2020 ||M. No. 406200 |