TO THE MEMBERS
OF SANCO TRANS LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements ofSANCO TRANS LIMITED ("the Company") which comprise the Balance Sheet as atMarch 31 2021 the Statement of Profit and Loss (including Other Comprehensive Income)Statement of Changes in Equity and Statement of Cash flows for the year then ended and asummary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 ('the Act") in the manner so requiredand give a true and fair view in conformity with the Indian Accounting Standardsprescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ('IND AS") and other Accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021the profit and total comprehensive income changes in equity and its cash flows for theyear ended on that date.
Basis for Opinion
We conducted our audit of the Standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theCompanies Act 2013. Our responsibilities under those Standards are further described inthe Auditor's Responsibilities for the Audit of the Standalone 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 (ICAI) together with theethical requirements that are relevant to our audit of the Standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the Standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
A. Revenue Recognition
Reference may be made to Note 3.1 of significant accounting policiesNote 23 and Note 45 to the financial statements of the Company.
Revenue recognition is inherently an area of audit risk which we havesubstantially focused on mainly covering the aspects of cut off.
Considering the impact of Ind AS 115 and cut-off are key audit matters.
Principal Audit Procedures
Our audit procedures relating to revenue comprised of test of controlsand substantive procedures including the following:
i. We performed procedures to assess the design and internal controlsestablished by the management and tested the operating effectiveness of relevant controlsrelating to the recognition of revenue.
ii. Selected a sample of continuing and new contracts and tested theoperating effectiveness of the internal control relating to identification of thedistinct performance obligations and determination of transaction price. We carried out acombination of procedures involving enquiry and observation reperformance and inspectionof evidence in respect of operation of these controls.
iii. We have tested on a sample basis whether specific revenuetransactions around the reporting date has been recognised in the appropriate period bycomparing the transactions selected with relevant underlying documentation includinggoods delivery notes customer acknowledgement/proof of acceptance and the terms ofservice.
iv. We have also validated subsequent credit notes up to the date ofthis Report to ensure the appropriateness and accuracy of the revenue recognition.
v. We tested journal entries on a sample basis to identify any unusualor irregular items.
vi. We also considered the adequacy of the disclosures in Company'sfinancial statements in relation to Ind AS 115 and were satisfied they meet the disclosurerequirements.
Based on the procedures performed above we did not find any materialexceptions with regards to timing of revenue recognition and disclosure requirement of IndAS 115 in the financial statements.
B. Impairment in Trade Receivables
Reference may be made to Note 8 to the financial statements of theCompany.
The Company is exposed to potential risk of financial loss when thereis the risk of default on receivables from the customers for which the Management wouldmake specific provision against individual balances with reference to the recoverableamount. Such provision/allowance for credit losses is based on historical experienceadjusted to reflect current and estimated future economic conditions.
For the purpose of impairment assessment significant judgements andassumptions including the credit risks of customers the timing and amount of realizationof these receivables are required for the identification of impairment events and thedetermination of the impairment charge.
Also during the year the company had to consider credit information ofits customers on the possible effect of the pandemic relating to COVID-19.
In view of the above we identified allowance for credit losses as akey audit matters since significant judgement is exercised in calculating the expectedcredit losses/impairment charge.
Principal Audit Procedures
We have performed the following procedures in relation to therecoverability of trade receivables and computing allowance for credit losses:
Tested the effectiveness of the control over the methodology forcomputing the allowance for credit losses including consideration of the economicconditions and completeness and accuracy of information used in the estimation ofprobability of default.
Tested the accuracy of aging of trade receivables at year end ona sample basis.
Obtained a list of outstanding receivables and identified anydebtors with financial difficulty through discussion with management.
Assessed the recoverability of the unsettled receivables on asample basis through our evaluation of management's assessment with reference to thecredit profile of the customers historical payment pattern of customers publiclyavailable information and latest correspondence with customers and to consider if anyadditional provision should be made;
Tested subsequent settlement of trade receivables after thebalance sheet date on a sample basis.
Based on the above procedures we found the key judgements andassumptions used by management in the recoverability assessment of trade receivables to besupportable based on the available evidence and consequently are satisfied on thesufficiency of provisions/allowance for credit losses.
Information Other than the Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the preparation ofother information in their Report to members etc. The other information comprises theinformation included in the Annual report but does not include the financial statementsand our auditor's report thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Management's Responsibility for the Standalone Financial Statements.
The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these Standalone financial statements that give a true and fair view of thefinancial position financial performance total comprehensive income changes in equityand cash flows of the Company in accordance with the IND AS and other accountingprinciples generally accepted in India. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the Standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether theStandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Companies Act 2013 based onour audit we report that:
a. We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b. In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.
c. The Balance Sheet the Statement of Profit and Loss including otherComprehensive income the Statement of Cash Flows and the Statement of Changes in Equitydealt with by this report are in agreement with the books of account.
d. In our opinion the aforesaid Standalone Financial Statements complywith the Indian Accounting Standards prescribed under Section 133 of the Act read with therelevant rules issued thereunder.
e. On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312021 from being appointed as a director in termsof Section 164(2) of the Companies Act 2013.
f. With respect to the adequacy of the Internal Financial Controls OverFinancial Reporting of the Company and the operating effectiveness of such controls referto our separate report in Annexure "A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the company's internal financialcontrols over financial reporting.
g. With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of Section 197(16) of the Act as amended inour opinion and to the best of our information and according to the explanations given tous remuneration paid by the company to it's directors during the year is in compliancewith the provisions of Section 197 of the Act.
h. With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditor's) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanation given to us:
The Company has disclosed the impact of pending litigations onits financial position in its Standalone Financial Statements. (Refer Note 40)
The company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses as at March312021.
There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f) under Report on Other Legal andRegulatory Requirements' section of our report of even date to the members of SancoTrans Limited)
Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the Internal Financial Controls Over FinancialReporting of SANCO TRANS LIMITED ("the Company") as of March 31 2021 inconjunction with our audit of the Standalone Financial Statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishingand maintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the Financial Statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of Financial Statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (i) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and disposition of the assets of the company; (ii) provide reasonableassurance that transactions are recorded as necessary to permit preparation of FinancialStatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (iii) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us 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 312021 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.
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under Report on Other Legal andRegulatory Requirements' section of our report of even date to the members ofSANCO TRANS LIMITED ("the Company") for the year ended March 312020)
1. In respect of the Company's fixed assets:
a) The company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets
b) The Company has a programme of verification to cover all the itemsof fixed assets in a phased manner which in our opinion is reasonable having regard tothe size of the Company and the nature of its assets. Pursuant to the programme certainfixed assets were physically verified by the management during the year. According to theinformation and explanation given to us no material discrepancies were noticed during theyear on such verification.
c) According to the information and explanations given to us and therecords examined by us we report that title deeds of all immovable property stated in note1 Property Plant & Equipment belonging to the Company are held in the name of theCompany as at the end of the year except as stated in Note 1(c). In respect of land thathas been taken on lease and disclosed as Right-of-use Asset in the Standalone financialstatements the lease arrangements are in the name of the Company.
2. As explained to us the inventories were physically verified duringthe year by the Management at reasonable intervals and no material discrepancies werenoticed on physical verification.
3. According to information and explanation given to us the Companyhad granted loan to its Subsidiary Company covered in the register maintained underSection 189 of the Companies Act 2013 during earlier year. In our opinion and based onthe information and explanations furnished to us we report that
(a) The terms and conditions of grant of such loans are not prejudicialto the Company's interest.
(b) The Schedule of repayment of principal and payment of interest hasbeen stipulated and the repayments or receipts of principal amounts and interest have beenregular and as per stipulations.
(c) There are no amounts overdue for more than 90 days. The loan hasbeen repaid during the year.
4. According to information and explanation given to us the Companyhas not granted any loans secured or unsecured to firms Limited Liability Partnershipsor other parties covered in the register maintained under section 189 of the CompaniesAct 2013 other than that stated in clause(3) above.
5. According to information and explanation given to us the Companyhas not granted any loans secured or unsecured furnished guarantees or provided securityto any party covered by provisions of sections 185 and 186 of the Companies Act 2013.Hence reporting on whether there is a compliance with the said provisions does not arise.
6. According to information and explanations given to us the Companyhas not accepted any deposits during the year and there are no unclaimed deposits as atMarch 312021 to which the provisions of section 73 to 76 or any other relevant provisionsof the Companies Act are applicable. Accordingly the provisions of clause (v) ofparagraph 3 of the Order is not applicable to the Company.
7. As per the information and explanation given to us the maintenanceof the cost records has not been specified by the Central Government under Section 148 ofthe Companies Act 2013.
8. According to the information and explanations given to us and thebooks of account examined by us in respect of statutory dues:
a) The company is regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income-tax Goods and Service taxCustoms duty cess and other material statutory dues as applicable to it with theappropriate authorities during the year. Except for the items stated in the below tablethere were no material undisputed amounts payable in respect of the aforesaid statutorydues outstanding as at March 312021 for a period of more than six months from the datethey became payable. :
|Sl .No Name of the Statute ||Nature of Dues ||Amount (In Rs. Lakhs) ||Period to which the amount relates |
|1 Income Tax Act 1961 ||Tax Deducted at source ||23.81 ||AY 2007-08 |
|2 Income Tax Act 1961 ||Tax Deducted at source ||5.28 ||AY 2008-09 |
|3 Income Tax Act 1961 ||Tax Deducted at source ||1.70 ||AY 2009-10 |
|4 Income Tax Act 1961 ||Tax Deducted at source ||0.29 ||AY 2010-11 |
|5 Income Tax Act 1961 ||Tax Deducted at source ||0.17 ||AY 2011-12 |
|6 Income Tax Act 1961 ||Tax Deducted at source ||0.08 ||AY 2013-14 |
|7 Income Tax Act 1961 ||Tax Deducted at source ||0.09 ||AY 2014-2015 |
|8 Income Tax Act 1961 ||Tax Deducted at source ||0.12 ||AY 2018-19 |
|9 Income Tax Act 1961 ||Tax Deducted at source ||0.04 ||AY 2019-20 |
|10 Income Tax Act 1961 ||Tax Deducted at source ||0.21 ||AY 2020-21 |
|Total ||31.79 || || |
Out of the above Rs. 31.18 has been paid subsequently.
b) b) There are no dues of Excise Duty Goods and Services tax VATSales tax Income tax or Customs Duty which has not been deposited on account of anydispute with the relevant authorities. Details of dues (including interest penalty etc.)of Service tax which has not been deposited as at March 312021 on account of disputes areas stated below:
|Name of the Statute ||Nature of Dues ||Amount (In Rs. Lakhs) of Disputed dues ||Period to which the amount relates ||Forum where dispute is pending |
|Finance Act 1994 ||Service Tax ||8.68 ||18.04.2006 to 31.03.2008 ||CESTAT |
|Finance Act 1994 ||Service Tax ||8.23 ||18.04.2006 to 31.03.2008 ||CESTAT |
9. In our opinion and according to information and explanation given tous the Company has not defaulted in repayment of dues to any financial institution orbank. The Company does not have any borrowings from Government or by way of Debentures.
10. As per the information and explanation given to us the Company hasnot raised any money by way of initial public offer or further public offers (includingdebt instruments) during the year. Hence reporting on utilization of such money underclause 3(ix) of the order does not arise.
11. During the course of our examination of the books of account andrecords of the company carried out in according with the generally accepted auditingpractices in India and according to the information and explanations given to us we haveneither come across any instance of fraud by the Company or material fraud on the Companyby its officers or employees during the year nor have we have been informed of any suchcase by the Management.
12. The Managerial Remuneration has been paid/provided by the Companyin accordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V of the Companies Act 2013.
13. The Company is not a Nidhi Company and accordingly the provisionsof Clause 3(xii) of the Order are not applicable to the Company.
14. In our opinion and according to the information and explanationsgiven to us all transactions with the related parties are in compliance with sections 177and 188 of the Companies Act 2013 where applicable. The details of the transactionsduring the year have been disclosed in the Financial Statements as required by theapplicable Accounting Standards. (Refer Note 37 to Financial Statements).
15. During the year the Company has not made any preferentialallotment or private placement of shares (covered by section 42 of the Companies Act2013) or in fully or partly convertible debentures. Hence reporting under clause 3(xiv)of the Order is not applicable.
16. In our opinion and according to the information and explanationsgiven to us the Company has not entered into any non-cash transactions during the yearwith directors or persons connected with them. Hence reporting on whether there iscompliance with provisions of section 192 of the Companies Act 2013 does not arise.
17. The Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934.
| ||For R. Sundararajan Associates |
| ||Chartered Accountants |
| ||Firm's Registration No. 008282S |
| ||S. Krishnan - Partner |
|June 30 2021 ||Membership No. 26452 |
|Chennai ||UDIN: 21026452AAAACO7891 |