To the Members of TAAL Enterprises Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the Standalone Financial Statements of TAAL Enterprises Limited ("theCompany") which comprise the Balance Sheet as at March 31 2020 and the Statementof Profit and Loss Statement of Changes in Equity and Statement of Cash Flows for theyear then ended and notes to the Standalone 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 Financial Statements give the information requiredby the Companies Act 2013 ("the Act') in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under Section 133of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amended andother accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2020 and Loss Changes in Equity and it's Cash Flows for the yearended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements Section of our report. We are independent of the Company in accordancewith the Code of Ethics issued by the Institute of Chartered Accountants of India(ICAI) together with the ethical requirements that are relevant to our audit of theStandalone Financial Statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion
Emphasis of Matter
We draw attention to the following matters in the Notes to the Standalone FinancialStatements: a) Note 37 which states that the Company had carried on the demerged charterbusiness and activities including banking transactions statutory compliances and allother commercial activities relating to the demerged charter business for and on accountof and in trust for TAAL Enterprises Limited until the time TAAL Enterprises Limitedobtains the requisite statutory licenses for carrying on the demerged charter business.However the accounting entries pertaining to the demerged charter business are accountedin the books of account of TAAL Enterprises Limited. The said matter is being reported asan Emphasis of Matter in our Statutory Audit Reports for the year ended March 31 2017onwards.
b) We draw attention to Note 42 to the financial statements which states that themanagement has performed an assessment of the impact of COVID-19 on the Company'soperations financial performance and position as at and for the year ended March 31 2020and has concluded that there is no material impact which is required to be recognised inthe financial statements. Accordingly no adjustments have been made to the financialstatements.
Our opinion is not modified in respect of the above matters.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the
Standalone Financial Statements of the current period. These matters were addressed inthe context of our audit of the Standalone Financial Statements as a whole and in formingour opinion thereon and we do not provide a separate opinion on these matters.
|Key Audit Matter ||How the Key Audit Matter was addressed in our audit |
|Impairment of carrying value of Right of Use Asset ||Our audit procedures in respect of this area included: |
|Refer Note 40 to the Standalone Financial Statements: ||1. Reviewed compliance with Ind AS 36 - Impairment of Assets. |
|The Group / Company has adopted Ind AS 116 Leases (Ind AS 116) in the current year. || |
|Ind AS 116 introduces a new lease accounting model wherein lessees are required to recognise a right-of-use (ROU) asset and a lease liability arising from a lease on the Balance Sheet. ||2. Obtained an understanding and verified the documentation and facts provided by Management. |
|The lease liabilities are initially measured by discounting future lease payments during the lease term as per the contract / arrangement. ||3. Assessed the reasonableness of the Management's assessment and conclusion with regard to comparison of the carrying value of the ROU with the recoverable amount to assess the impairment in the carrying amount. |
|The Company operates a leased aircraft which has been recognised as a ROU pursuant to Ind AS 116. During the year the leased aircraft (Right of Use asset) was damaged. The aircraft remains grounded since the incident on September 12 2019. ||4.Obtained related management representations. |
|Considering the fact that the aircraft remains non-operational the uncertainty around the timing of recommencement of the charter operations and the future receipt of insurance claim the Group / company has assessed the carrying value of the Right of Use asset. Consequently written down the carrying value of the ROU by recognizing an impairment loss. ||5. Verified disclosures in this regard |
|Due to the uncertainty and significant judgement involved in this matter we have considered this as a key audit 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 Management report Director's report but does not include theStandalone Financial Statements and our auditor's report thereon. Our opinion on theStandalone Financial Statements does not cover the other information and we do not expressany form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone Financial Statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows in accordance with the accounting principles generally acceptedin India including the Accounting Standards specified under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the Standalone Financial Statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic 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 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 Financial Statements.
We give in "Annexure A" a detailed description of Auditor's responsibilitiesfor Audit of the Standalone Financial Statements.
Due to the Covid-19 related lockdown we were not able to participate in the physicalverification of inventory that was carried out by the management subsequent to the yearend. of the Company Consequently we have performed alternate procedures to the audit ofexistence of inventory as per the guidance provided in SA 501 "Audit EvidenceSpecific Considerations for Selected Items" and have obtained sufficient appropriateaudit evidence to issue our unmodified opinion on these Standalone Financial Results.
Our opinion is not modified in respect of the above 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 Sub-Section (11) of Section 143 ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 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 the Statement of Changes inEquity and the Statement of Cash Flow dealt with by this Report are in agreement with thebooks of account.
(d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 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 with reference toStandalone Financial Statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure C".
(g) 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 does not have any pending litigations which would impact its financialposition. ii. The Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses. iii. There has been nodelay in transferring amounts required to be transferred to the Investor Education andProtection Fund by the Company
3. As required by The Companies (Amendment) Act 2017 in our opinion according toinformation explanations given to us the remuneration paid by the Company to itsdirectors is within the limits laid prescribed under
Section 197 of the Act and the rules thereunder.
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT ON EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF TAAL ENTERPRISES LIMITED
Auditor's Responsibilities for the Audit of the 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 todeficiencies 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 to designaudit procedures that are appropriate in the circumstances. Under Section 143(3) (i) ofthe Act we are also responsible for expressing our opinion on whether the company hasinternal financial controls with reference to financial statements in place and theoperating effectiveness 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 and significant audit findings including ininternal control that we identify anysignificant 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.
ANNEXURE B TO INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF TAAL ENTERPRISE LIMITED FOR THE YEAR ENDED MARCH 31 2020
[Referred to in paragraph under Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report]
i. (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets (Property Plant and Equipment).
(b) Fixed assets (Property Plant and Equipment) have been physically verified by themanagement during the year and no material discrepancies were identified on suchverification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company does not own any immovableproperties. Accordingly of the provisions stated in paragraph 3(i)(c) of the order arenot applicable to the Company.
ii. The Company is involved in the business of rendering services. Accordingly theprovisions stated in paragraph 3(ii) of the Order are not applicable to the Company
iii. The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnerships (LLP) or other parties covered in the register maintainedunder Section 189 of the Companies Act 2013 (the Act'). Accordingly the provisionsstated in paragraph 3 (iii) (a) to (c) of the Order are not applicable to the Company. iv.In our opinion and according to the information and explanations given to us the Companyhas not either directly or indirectly granted any loan to any of its directors or to anyother person in whom the director is interested in accordance with the provisions ofSection 185 of the Act and the Company has not made investments through more than twolayers of investment companies in accordance with the provisions of Section 186 of theAct. Accordingly provisions stated in paragraph 3(iv) of the Order are not applicable tothe Company.
v. In our opinion and according to the information and explanations given to us thereare no amounts outstanding which are in the nature of deposits as on March 31 2020 andthe Company has not accepted any deposits during the year.
vi. The provisions of Sub-Section (1) of Section 148 of the Act are not applicable tothe Company as the Central Government of India has not specified the maintenance of costrecords for any of the products of the Company.
Accordingly the provisions stated in paragraph 3 (vi) of the Order are not applicableto the Company.
vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion undisputed statutory dues including providentfund employees' state insurance income-tax sales-tax service tax duty of custom dutyof excise value added tax goods and service tax cess and other statutory dues havegenerally been regularly deposited with the appropriate authorities though there has beena slight delay in a few cases
(b) According to the information and explanation given to us and the records of theCompany examined by us there are no dues of income tax goods and service tax customsduty cess and any other statutory dues which have not been deposited on account of anydispute.
viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to the financial institution bank ordebenture holders.
ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordingly theprovisions stated in paragraph 3 (ix) of the Order are not applicable to the Company.
x. During the course of our audit 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 explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employees.
xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act. xii. In our opinion and according to theinformation and explanations given to us the Company is not a Nidhi Company. Accordinglythe provisions stated in paragraph 3(xii) of the Order are not applicable to the Company.
xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly the provisions stated in paragraph 3 (xiv) of the Order are notapplicable to the Company.
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 non-cashtransactions with directors or persons connected with him. Accordingly provisions statedin paragraph 3(xv) of the Order are not applicable to the Company.
xvi. In our opinion the Company is not required to be registered under Section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions stated in paragraphclause 3 (xvi) of the Order are not applicable to the Company.
ANNEXURE C TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF TAAL ENTERPRISES LIMITED
[Referred to in paragraph 2(f) under Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report]
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 Standalone FinancialStatements of TAAL Enterprises Limited ("the Company") as of March 312020 in conjunction with our audit of the Standalone Financial Statements of the Companyfor the year ended 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 with reference to Standalone FinancialStatements 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 (ICAI) (the"Guidance Note"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to Standalone Financial Statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingissued by ICAI and deemed to be prescribed under Section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether internal financial controls with reference toStandalone Financial Statements was established and maintained and if such controlsoperated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to Standalone Financial Statements and their operatingeffectiveness. Our audit of internal financial controls with reference to StandaloneFinancial Statements included obtaining an understanding of internal financial controlswith reference to Standalone Financial Statements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of theStandalone 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 withreference to Standalone Financial Statements.
Meaning of Internal Financial Controls With Reference to Standalone FinancialStatements
A Company's internal financial control with reference to Standalone FinancialStatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of Standalone Financial Statements for externalpurposes in accordance with generally accepted accounting principles. A Company's internalfinancial control with reference to Standalone Financial Statements includes thosepolicies 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 Standalone Financial Statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance 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 Standalone Financial Statements.
Inherent Limitations of Internal Financial Controls With Reference to StandaloneFinancial Statements
Because of the inherent limitations of internal financial controls with reference toStandalone Financial Statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to Standalone Financial Statements to future periods are subjectto the risk that the internal financial control with reference to Standalone FinancialStatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects internal financial controlswith reference to Standalone Financial Statements and such internal financial controlswith reference to Standalone Financial Statements were operating effectively as at March31 2020 based on the internal control with reference to Standalone Financial Statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note.
| ||For MSKA & Associates |
| ||Chartered Accountants |
| ||ICAI Firm Registration No. 105047W |
| ||Deepak Rao |
| ||Partner |
|Place: Bengaluru ||Membership No. 113292 |
|Date: July 30 2020 ||UDIN: 20113292AAAAML7362 |