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Tribhovandas Bhimji Zaveri Ltd.

BSE: 534369 Sector: Consumer
NSE: TBZ ISIN Code: INE760L01018
BSE 00:00 | 20 Feb 35.55 0.20
(0.57%)
OPEN

35.45

HIGH

37.00

LOW

35.15

NSE 00:00 | 20 Feb 35.65 0.50
(1.42%)
OPEN

35.55

HIGH

37.05

LOW

35.20

OPEN 35.45
PREVIOUS CLOSE 35.35
VOLUME 11650
52-Week high 72.35
52-Week low 29.95
P/E 12.39
Mkt Cap.(Rs cr) 237
Buy Price 34.00
Buy Qty 1.00
Sell Price 36.40
Sell Qty 100.00
OPEN 35.45
CLOSE 35.35
VOLUME 11650
52-Week high 72.35
52-Week low 29.95
P/E 12.39
Mkt Cap.(Rs cr) 237
Buy Price 34.00
Buy Qty 1.00
Sell Price 36.40
Sell Qty 100.00

Tribhovandas Bhimji Zaveri Ltd. (TBZ) - Auditors Report

Company auditors report

To the Members of Tribhovandas Bhimji Zaveri Limited

Report on the Audit of the standalone Ind AS Financial Statements Opinion

We have audited the accompanying standalone Ind AS financial statements of TribhovandasBhimji Zaveri Limited ("the Company") which comprise the Balance sheet asat March 31 2019 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the financial statements including a summary ofsignificant 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 standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2019 its profit including other comprehensive income its cashflows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) as specified under section 143(10) of the Companies Act2013 ("the Act"). Our responsibilities under those Standards are furtherdescribed in the ‘Auditor's Responsibilities for the Audit of the standalone Ind ASFinancial Statements' section of our report. We are independent of the Company inaccordance with the ‘Code of Ethics' issued by the Institute of Chartered Accountantsof India together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone Ind AS financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended March 31 2019. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key audit matters How our audit addressed the key audit matter
Existence and valuation of Inventories (as described in note 2.2 (e) of the significant accounting policies and note 11 for details in standalone Ind AS financial statements)
The carrying value of Inventories of the Company is INR Our audit procedures over existence and valuation of Inventories included the following:
118692.91 lacs as at March 31 2019. The Company's Inventories mainly comprised of gold diamond silver and platinum in the distribution centers and retail outlets. Valuation of Inventories is at lower of cost and net realizable value. Significant portion of Inventories costs includes gold diamonds platinum and silver which are subject to risk of changes in the market value. The assessment of net realizable value of Inventories is based on estimates and judgements by the management in respect of among others the economic condition sales forecast marketability of products and the quality of gold and diamonds used to make jewellery products. Furthermore there is higher inherent risk of theft and pilferage given the high intrinsic value and portable nature of individual inventory items.
• We obtained an understanding evaluated the design and tested the operating effectiveness of key controls that the Company has in relation to Inventories process in particular we:
a. Attended on a sample basis daily cycle physical counts at distribution centers and selected retail outlets. We observed the daily count procedures performed in retail outlets and distribution centers;
b. In respect of samples tested for physical verification by management we inspected the respective daily cycle physical count reports for reconciliation of daily ending Inventories to the record in the Inventories system;
c. In respect of samples tested for physical verification by management we read the in-house certificate of authenticity of diamond jewellery products;
Considering the above we concluded that existence and valuation of inventories as a key audit matter for our audit. • We have observed periodic Inventories counts and performed "two way" sample count procedures for distribution centers and selected retail outlets of the Company. We compared our sample count results with the counts performed by the Company and the records in the Inventories system.
• We compared the net realizable values on sample basis of gold silver and platinum Inventories calculated based on the current market price with their carrying value of Inventories.
• We compared the results of independent gemological appraisal report of selected samples to the weight and purity of diamond jewellery with records in the Inventories system.
• We evaluated the independence and objectivity of the gemologist appointed by management.

We have determined that there are no other key audit matters to communicate in ourreport.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the annual report but does not includethe standalone Ind AS financial statements and our auditor's report thereon. The AnnualReport is expected to be made available to us after the date of this auditor's report.

Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether such other information is materially inconsistent withthe standalone Ind AS financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.

Responsibilities of Management for the standalone Ind AS Financial 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 standalone Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management 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 unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic 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 standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone Ind AS 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 standalonefinancial 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 the audit in order todesign 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 companyhas adequate internal financial controls system in place and the operating effectivenessof such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves 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 defficiencies 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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.

Other Matter

The Ind AS financial statements of the Company for the year ended March 31 2018included in these standalone Ind AS financial statements have been audited by thepredecessor auditor who expressed an unmodified opinion on those statements on May 22018.

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 Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.

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 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 the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on 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 with reference to these standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure 2" to this report;

(g) In our opinion the managerial remuneration for the year ended March 31 2019 hasbeen paid/ provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements – Refer Note 39.3(i) to thestandalone Ind AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number:
324982E/E300003
per Vijay Maniar
Place of Signature: Mumbai Partner
Date: May 14 2019 Membership Number: 36738

"ANNEXURE 1" TO INDEPENDENT AUDITOR'S REPORT TRIBHOVANDAS BHIMJI ZAVERILIMITED (‘THE COMPANY')

With reference to the "Annexure 1" referred in the Independent Auditor'sReport to the members of the company on the Ind AS financial statements for the year 31March 2019 we report that:

(i) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant & Equipment.

(b) The company has a regular programme of physical verification of its fixed assets(property plant and equipment) by which all fixed assets (property plant and equipment)are verified in a phased manner over a period of two years. In accordance with thisprogramme a portion of the fixed assets (property plant and equipment) has beenphysically verified by the management during the year and no material discrepancies havebeen noticed on such verification. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the company and nature of itsassets.

(c) According to the information and explanation given to us and on the basis of ourexamination of the records of the company the title deeds of immovable property are heldin the name of the company.

(ii) The inventory except stocks lying with third parties has been physicallyverified by the management during the year. In our opinion the frequency of suchverification is reasonable. The discrepancies noticed on verification between the physicalstocks and the book records were not material and have been properly dealt with in booksof account. In respect of inventory lying with third parties these have beensubstantially confirmed by them.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013 ("the Act"). Accordingly the provisions of clause 3(iii) ofthe Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us thecompany has not made any investments or granted any loans or security or guarantee coveredunder section 185 and 186 of the Act. Accordingly paragraph 3(iv) of the order is notapplicable.

(v) The Company has not accepted any deposits as per the directives issued by theReserve Bank of India and the provisions of Sections 73 to 76 of the Act and the Companies(Acceptance of Deposits) Rules 2014 (as amended). Accordingly the provisions of clause3(v) of the Order are not applicable.

(vi) To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under section 148(1) of the Act for theservices of the Company. Accordingly paragraph 3(vi) of the order is not applicable.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax customs duty goods and service tax cess and other statutory dueshave generally been regularly deposited with the appropriate authorities though there hasbeen a slight delay in few cases. As explained the company did not have any dues onaccount of sales tax value added tax and duty of excise.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxcustoms duty goods and service tax cess and other material statutory dues wereoutstanding at the year end for a period of more than six months from the date theybecame payable.

(c) According to the records of the Company there are no dues outstanding ofincome-tax sales-tax wealth-tax service tax duty of custom excise duty goods andservice tax value added tax and cess on account of any dispute which have not beendeposited with the appropriate authorities other than those mentioned below:

Nature of statute Nature of dues Amount (Rs. Lacs) # Period to which amount relates Forum where dispute is pending
Customs Act 1962 Customs duty 18.25 FY 2007-08 Additional Commissioner of Customs
Maharashtra Value Added Tax Act 2002 Value added tax 286.24 FY 2011-12 Joint Commissioner of Sales Tax (Appeal)
Central Sales Tax Act 1956 Central sales tax 1.07 FY 2011-12 Joint Commissioner of Sales Tax (Appeal)
Local Body Tax Act Local body tax 31.53 FY 2012-13 Commissioner
Maharashtra Value Added Tax Act 2002 Value added tax 15.69 FY 2013-14 Joint Commissioner of Sales Tax (Appeal)
Central Sales Tax Act 1956 Central sales tax 5.55 FY 2013-14 Joint Commissioner of Sales Tax (Appeal)

# The above amounts are net of amounts paid under protest.

(viii) According to information and explanations given by the management we are of theopinion that the Company does not have any outstanding dues to financial institution bankand government or debenture holders during the year. Accordingly paragraph 3(viii) of theOrder is not applicable.

(ix) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not raised any monies by way ofinitial public offer / further public offer (including debt instruments) and has notobtained any term loans during the year. Accordingly paragraph 3(ix) of the Order is notapplicable.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the Company or no fraud on the Companyby the officers and employees of the Company has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given by themanagement the managerial renumeration has been paid/provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct.

(xii) In our opinion the Company is not a Nidhi company and the Nidhi Rules 2014 arenot applicable to it. Therefore the provisions of clause 3(xii) of the order are notapplicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 188 of the Act whereapplicable and the details have been disclosed in the notes to the financial statements asrequired under Indian Accounting Standard (Ind AS) 24. The provisions of Section 177 ofthe Act are not applicable to the Company.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company and not commented upon.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the company the Company has not entered into any non-cashtransactions with directors or persons connected with him/her as referred to in section192 of the Act. Accordingly paragraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.Accordingly paragraph 3 (xvi) of the order is not applicable.

For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number:
324982E/E300003
per Vijay Maniar
Place of Signature: Mumbai Partner
Date: May 14 2019 Membership Number: 36738

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF TRIBHOVANDAS BHIMJI ZAVERI 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 reportingof Tribhovandas Bhimji Zaveri Limited ("the Company") as of March 31 2019 inconjunction with our audit of the Ind As financial statements of the Company for the yearended on that date.

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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these standalone financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")and the Standards on Auditing as specified under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls and both issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting withreference to these financial statements was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to these financialstatements and their operating effectiveness. Our audit of internal financial controlsover financial reporting included obtaining an understanding of internal financialcontrols over financial reporting with reference to these financial statements assessingthe risk that a material weakness exists and testing and evaluating the design andoperating 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 overfinancial reporting with reference to these financial statement

Meaning of Internal Financial Controls Over Financial Reporting with Reference to theseFinancial Statements

A company's internal financial control over financial reporting with reference to thesefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial control over financial reporting with reference to these financialstatements includes those policies and procedures that:

1. pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

3. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting withReference to the Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these financial statements including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls over financial reporting with reference to these financialstatements to future periods are subject to the risk that the internal financial controlover financial reporting with reference to these financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting with reference to these financial statements and suchinternal financial controls over financial reporting with reference to these financialstatements were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number:
324982E/E300003
per Vijay Maniar
Place of Signature: Mumbai Partner
Date: May 14 2019 Membership Number: 36738