TO THE MEMBERS OF TAMILNADU PETROPRODUCTS LIMITED Report on the Audit of StandaloneFinancial Statements Opinion
We have audited the accompanying standalone financial statements of TamilnaduPetroproducts Limited ("the Company") which comprise the Balance Sheet as at31st March 2020 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 standalone 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 2020 and its profit includingother comprehensive income its cash flows and changes in equity for the year ended onthat date.
Basis for Opinion
We conducted ourauditinaccordancewiththeStandards specifiedunder section 143(10) of theAct. Our responsibilities Auditing(SAs) under those Standards are further describedin the Auditor's Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of theAct and the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our
Key Audit Matters
Key audit matters are those matters that in our professional judgement were of mostsignificance in 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's operations expose it to the risk of litigation and contractual claims from third parties including statutory authorities. The recognition and valuation of exposure to tax & other legal framework related disputes demands and claims across various specific matters due to the range of potential expected outcomes requires the exercise of management judgement upon the probability of their incurrence and in assessing the amounts recorded and estimates relating to the timing and the amount of outflow of resources embodying economic benefits and the consequential disclosures made in the financial statements. ||We assessed and tested the judgements made by the management with corroborative enquiries including status update future course of action contemplated by the Company. In particular we challenged the expectation of outcomes by assessing against past events or agreeing to supporting evidence and compared with our expectations. |
|For those exposures where provision is made the use of estimates within those provisions gives rise to inherent subjectivity in the amounts recorded in the financial statements. For those exposures where no provision has been made the obligation to disclose the nature and estimate of its financial impact gives rise to further judgement in the disclosure within the financial statements. ||We obtained confirmation from the legal attorneys of the company and considered their opinions with our assessments of the probability in the outcomes. |
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.
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
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 the standalone financial statements does not cover the other informationand we do not and will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information identified above and in doing so consider whether the otherinformation is materially inconsistent with the financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.
When we read the other information if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance.
Responsibilities of the 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 standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensiveincomecashflowsand changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (IND AS) specified under the Act read with Rules framed thereunder asapplicable.
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 standalonefinancial statements that give a true and fair view and are free from materialmisstatement 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 audit findings 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 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 we exercise professional judgment andmaintain 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 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 financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit andsignificant including any significantdeficiencies 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 our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Due to prevailing lockdown conditions and travel restrictions due to COVID-19 we wereunable to participate in the physical verification of Cash and Inventory as at 31st March2020. Consequently we have adopted alternative audit procedures as per the guidance noteissued by the ICAI on physical Inventory verification Key audit consideration amidCOVID-19 and SA 501- Audit evidence Specific Considerations for selected items and haveobtained sufficient audit opinion in respect of the above on these financial statements.Our opinion is not modified in respect of this matter.
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 the Cash Flow Statement and the Statement ofChanges in Equity dealt with by this report 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 the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March
2020 from being appointed as a director in terms 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 unmodifiedopinion onthe adequacy and operating effectiveness of the Company's internal financial controls withreference to financial statements.
(g) With respect to other matters to be included and appropriateauditevidencetoissueourunmodified in Auditor's Report in accordance with the requirementsof section.197(16) of the Act in our opinion and to the best of our information andaccording to the explanations given to us the remuneration paid by the Company to itsDirectors during the year is in accordance with the provisions of section 197 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. 33 and 34A 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. and Loss
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
|For R.G.N. Price & Co. |
|Chartered Accountants |
|(Firm Regn No.002785S) |
|Mahesh Krishnan |
|(Membership No. 206520) |
|UDIN: 20206520AAAACA6958 |
Chennai 15th June 2020
ANNEXURE A TO THE INDEPENDENT AUDITOR'S 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 March2020)
(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 not been physically verified bythe management as it was done last year by the management.
(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 note.3A to the financial statements.
(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
185 of the Act. The investment made by the Company during the year is in compliancewith Section 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 recordsmaintained by the Company pursuant to The Companies (Cost Records and Audit) Rules 2014prescribed by the Central Government under section 148 (1) of Companies Act 2013 and areof the opinion that prima facie the prescribed cost records have been made and maintained.We have however not made a detailed examination of the cost records with a view todetermine whether they are accurate 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' State Insurance Income-tax Goods and Service Tax Duty ofCustoms Cess and any other statutory dues to the appropriate authorities. There are noarrears of outstanding undisputed statutory dues as on the last day of the financial yearfor a period of more than 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 2020 except for:
(` in lakh)
|Nature of Statute ||Nature of Dues ||Forum where dispute is pending ||Financial Year ||Amount involved ||Amount unpaid |
|Income Tax Act ||Income Tax ||DCIT ||1999-00 2005-06. 2013-14 ||3735.78 ||440.63 |
| || ||Dispute Resolution Panel ||2011-12 ||824.94 ||322.34 |
| || ||Income Tax Appellate Tribunal ||2008-09 2009-10 2010-11 2012-13 ||2746.11 ||1640.44 |
| || ||High Court ||2000-01 2002-03 ||8428.69 ||5123.59 |
| || ||Supreme Court ||2001-02 ||2645.60 ||123.60 |
|Various States Sales Tax Acts ||Sales Tax ||High Court ||2006-07 ||58.09 ||58.09 |
| || ||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 instruments) or term loans and hence reporting under clause 3 (ix) of theOrder' 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 employees ofthe 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.
(including debt (xiv) The Company has not made any preferential allotment or privateplacement of shares 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.
For R.G.N. Price & Co.
Chartered Accountants (Firm Regn No.002785S)
Partner (Membership No. 206520) UDIN: 20206520AAAACA6958
Chennai 15th June 2020
ANNEXURE-B TO THE INDEPENDENT AUDITOR'S 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 March2020.)
We have audited the internal financial controls over financial reporting of TamilnaduPetroproducts Limited (the Company') as of March 31 2020 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
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 financialreporting 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 CompaniesAct 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 to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. as at March 31 Our audit of internal financial controls over financialreporting included obtaining an understanding of internal financial controls overfinancial reporting assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto 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 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 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 authorisations of management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised 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
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 2020 based on the internal control over effectively financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note of Internal Financial Controls over Financial Reporting issued by theInstitute of Chartered Accountants of India.
For R.G.N. Price & Co.
Chartered Accountants (Firm Regn No.002785S)
Partner (Membership No. 206520) UDIN: 20206520AAAACA6958
Chennai 15th June 2020