TO THE MEMBERS OF TAMILNADU PETROPRODUCTS LIMITED Report on the Audit of StandaloneFinancial Statements
We have audited the accompanying standalone financial statements of TamilnaduPetroproducts Limited ("the Company") which comprise the BalanceSheet as at 31st March 2021 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Cash Flows and the Statement of Changes in Equityfor the year then ended and the notes to the financial statements including a summary ofthe significant accounting policies and other explanatory information (hereinafterreferred to as "the financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31st March 2021 and its profit totalcomprehensive income its cash flows and changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the 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 on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgement were of mostsignificancein our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the standalone financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters
|Accounting for legal and other contractual claims: ||Our response |
|The Company is involved in litigations comprising of tax matters legal compliances and other disputes the financial impact of which would largely depend on the decision by the appellate authorities. ||Our audit procedures included the following: |
|The Company assess the need to make a provision or disclose a contingency on a case-to-case basis considering the underlying facts of each matter in consultation with its legal counsel and the level of probability of outflow of economic resources. This involves a high level of management judgement and assumptions which impact the risk assessment and consequential provisioning and disclosure of contingencies in the financial statements. This area is significant to our audit since the completeness and accuracy of accounting and disclosures for contingencies is dependent on such management judgement and assumptions. ||We evaluated and tested the Company's processes and controls for monitoring of claims litigations disputes compliance and assessment thereof for determining the likely outcome. |
|During the year the Company also opted for strategic settlement of some of its income tax disputes through the government introduced Vivad Se Vishwas Scheme. Necessary provisions were made as also reversals of existing provisions done where not required based on the settlement amount agreed with the income tax authorities. ||We read the summary of the litigations prepared by the management and discussed the material cases to determine the Company's assessment of the likelihood and magnitude of any liability that may arise. |
| ||We obtained independent legal confirmations from the concerned lawyers where applicable to seek their opinion on the status of litigations and checked the management's judgements and assumptions. |
| ||We discussed with the management to understand the basis of management's judgements and estimates and independently assessed the level of probability of outflow of resources embodying the economic resources to arrive at our judgement of whether a provision was required or a disclosure sufficient. |
| ||We obtained risk assessment of tax litigations from our tax specialists to assess management's judgements and assumptions on such matters. |
| ||We read the minutes of the board meetings to determine the completeness of claims disputes and litigations. |
| ||We tested the adequacy of disclosures in the standalone Ind AS financial statements. |
| ||We also obtained necessary representation from the management with regard to the provisioning and disclosures in respect of the claims and litigations. |
Emphasis of Matter
We draw attention to Note No.37 in the financial statements wherein the Company hasdisclosed the impact of COVID-19 pandemic on its current and future financial performance.Considering the uncertainties involved in the future economic scenario which is based onvarious external factors outside the control of the Company the management's assumptionsand estimates on operational and financial performance of the Company would largely dependon future developments as they emerge as stated in the said note. Our opinion is notmodified in respect of this matter.
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including annexures to Board's Report and Report on Corporate Governancebut does not include the standalone and consolidated financial statements and ourrespective auditor's report thereon. The other information referred to above is expectedto be made available to us after the date of this auditor's report. Our opinion on thestandalone financial statements does not cover the other information and we do not andwill not express any form of assurance conclusion thereon. In connection with our audit ofthe financial statements our responsibility is to read the other information identifiedabove and in doing so consider whether the other information is materially inconsistentwith the financial statements or our knowledge obtained in the audit or otherwise appearsto be materially misstated. When we read the other information if we conclude that thereis a material misstatement therein we are required to communicate the matter to thosecharged with governance.
Management's Responsibility for the Standalone 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 financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (IND AS)specified under the Act read with Rules framed thereunder asapplicable. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selectiondoubt on andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the 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.
Auditors' Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the FinancialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements. As part of an audit in accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of the Financial Statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3) (i) ofthe Companies Act 2013 we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast the Company's ability to continue assignificant a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditor's report to the related disclosures in thefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation. Materiality is themagnitude of misstatements in the standalone financial statements that individually or inaggregate makes it probable that the economic decisions of a reasonably knowledgeableuser of the standalone financial statements may be influenced. We consider quantitativemateriality and qualitative factors in i. planning the scope of our audit work and inevaluating the results of our work; and ii. to evaluate the effect of anyidentifiedmisstatements in the standalone financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findingsincludinganysignificantdeficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein Annexure-A a statement on the matters specified in paragraphs 3 and 4 of theOrder.
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 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 standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant Rulesissued there under. (e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 st March 2021 from being appointed as a director interms of Section 164 (2) of the Act.
(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. Our Report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company's internal financial controls withreference to financial statements.
(g) With respect to other matters to be included in Auditor's Report in accordance withthe requirements of section.197(16) of the Act in our opinion and to the best of ourinformation and according to the explanations given to us the remuneration paid by theCompany to its Directors during the year is in accordance with the provisions of section197 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 opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements. Refer Note Nos.31A and 33 to thestandalone financial statements.
ii. The Company has certain long-term contracts for which there are no materialforeseeable losses. The Company did not have any derivative contracts. iii. There has beenno delay in transferring amounts required to be transferred to the Investor Educationand Protection Fund by the Company.
ANNExURE A TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under Report on other legal and RegulatoryRequirements' section of our report of even date to the members of the Company on thestandalone financial statements of the Company for the year ended 31st March2021)
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) The Company has adopted a policy of physically verifying its Fixed Assets once intwo years which in our opinion is reasonable having regard to the size of the Company andnature of its business. During the year Fixed Assets have been physically verified by themanagement and according to the information and explanation given to us discrepanciesnoticed on such verification were not material and have been properly dealt with in thebooks of accounts.
(c) According to the information and explanations given to us and on the basis of ourexamination we report that the title deeds of land and the buildings constructed thereonare held in the name of the Company as at the balance sheet date. In respect of leaseholdland the lease agreement is in the name of the Company where the Company is the lessee.Also refer to note.3 to the financial statements regarding renewal of lease of land.
(ii) Physical verification of inventories has been conducted at reasonable intervals bythe Management. The discrepancies noticed on physical verification which were not materialhave been properly dealt with in the books of accounts.
(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013.
(iv) The Company has not granted any loans nor any guarantee or security to theDirectors or to any Company body corporate or to any other person covered by Section 185of the Act. The investment made by the Company during the year is in compliance withSection 186 of the Act.
(v) The Company has not accepted any deposits and the provisions of Section 73 to 76 orany other relevant provisions of the Companies Act 2013 and the rules framed there underare not applicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the Company pursuant toThe Companies (Cost Records and Audit) Rules 2014 prescribed by the Central Governmentunder section 148 (1) of Companies Act 2013 and are of the opinion that prima facie theprescribed cost records have been made and maintained. We have however not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.
(vii) (a) On the basis of our examination of books and records the Company has beenregular in depositing undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Goods and Service Tax Duty of Customs Cess and any otherstatutory dues to the appropriate authorities. There are no arrears of outstandingundisputed statutory dues as on the last day of the financial year for a period of morethan six months from the date they became payable.
(b) There are no dues of income tax or sales tax or service tax or GST or duty ofcustoms or duty of excise or value added tax or cess which have not been deposited onaccount of any dispute as at 31st March 2021 except for:
|Nature of Statute ||Nature of Dues ||Forum where dispute is pending ||Financial Year ||Amount involved ||Amount unpaid |
|Income Tax Act ||Income Tax ||DCIT / AO ||1999-00 2005-06 ||3684 ||441 |
| || ||Income Tax Appellate Tribunal ||2008-09 2012-13 ||560 ||382 |
| || ||Supreme Court ||2001-02 ||2645.60 ||123.60 |
|Various States Sales ||Sales Tax ||High Court ||2006-07 ||58.09 ||58.09 |
|Tax Acts || ||Sales Tax Appellate Tribunal ||1993-94 1995-96 to 2002-03 ||1668.02 ||1656.82 |
| || ||Deputy Commissioner (Commercial Taxes) ||2005-06 ||5.15 ||5.15 |
|Finance Act1994 ||Service Tax ||CESTAT Chennai ||2011-12 to 2014-15 ||102.47 ||97.35 |
|Excise Duty || ||Principal Commissioner GST & CE ||1994-95 to 1996-97 ||60.82 ||23.47 |
| || ||CESTAT Chennai ||2005-06 to 2009-10 ||244.22 ||221.11 |
|Customs Act ||Customs Duty ||Deputy Commissioner of Customs ||1999-00 ||34.25 ||34.25 |
(viii) According to the information and explanation given to us and the records of theCompany examined by us the Company has not defaulted in repayment of loans or borrowingfrom any financial institutions banks or Government. The Company has not issued anydebentures.
(ix) The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments) or term loans and hence reporting under clause 3(ix) of the Order' is not applicable.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanation given to us we have neither observed anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesof the Company nor have we been informed of such case by the Management during the year.
(xi) In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid/ provided in accordance with the requisite approvalmandated by the provisions of Section 197 read with Schedule V to the Companies Act 2013.
(xii) The Company is not a Nidhi Company and hence clause 3(xii) of the Order' isnot applicable.
(xiii) Transactions with related parties have been disclosed in the standalonefinancial statements with details as prescribed by Indian Accounting Standard 24"Related Party Transactions". These transactions are in compliance with Section177 and 188 of Companies Act 2013.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year.
(xv) According to the information and explanation provided to us and based on ourexamination of records the Company has not entered into any non-cash transactions withdirectors or persons connected with him.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
ANNExURE -B TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in Clause (f) of Paragraph 2 of Report on Other Legal and RegulatoryRequirements of our report of even date to the members of the Company on the InternalFinancial Controls Over Financial Reporting for the year ended 31st March2021.)
We have audited the internal financial controls over financial reporting of TamilnaduPetroproducts Limited (the Company') as of March 31 2021 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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 Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013
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 Reportingand the Standards of Auditing to the extent applicable to an audit of internal financialcontrols both issued by the Institute of Chartered Accountants of India. Those Standardsand Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects. Our audit involves performing procedures toobtain audit evidence about the adequacy of the internal financial controls system overfinancial reporting and their operating effectiveness. Our audit of internal financialcontrols over financial reporting included obtaining an understanding of internalfinancial controls over financial reporting assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on theCompany's internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial
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; to 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.
According to the information and explanations given to us and based on our audit theCompany has in all material respects an adequate internal financial control overfinancial reporting and such internal financial control over financial reporting wereoperating effectively as at March 31 2021 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India.
For R.G.N Price & Co.
Chartered Accountants (Firm Registration No. 002785S)
| ||Mahesh Krishnan |
| ||Partner |
|Date : 28th June 2021 ||(Membership No.206520) |
|Place: Chennai ||UDIN:21206520AAAADW9701 |