TO THE MEMBERS OF
TAINWALA CHEMICALS AND PLASTICS (INDIA) LIMITED
Report on the Audit of the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of TAINWALA CHEMICALSAND PLASTICS (INDIA) LIMITED ("the Company") which comprise theBalance Sheet as at March 31 2020 the Statement of Profit and Loss (includingOther Comprehensive Income) the Statement of Changes in Equity and the Statement of CashFlows for the year ended on that date and notes to financial statements including asummary of significant accounting policies (hereinafter referred to as the "the IndAS financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe 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 March 31 2020 and the profit(Financial performance including total comprehensive income) changes in equity and itscash flows for the year ended 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 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 Ind AS financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the Ind AS financial statements.
Emphasis of Matter
We draw your attention to Note 2 to the statement which describes the economic andsocial disruption as a result of COVID-19 pandemic of the company's business and financialmetrics including the company's estimates of future business activity which are highlydependent on uncertain future developments.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
|Sr.No. ||Key Audit Matter ||How was the matter addressed in our audit |
|1 ||Balance Confirmations [refer note no. 44 to the Ind AS financial statements] || |
| ||The balances in accounts of certain trade receivables trade payables and loans and advances given are subject to confirmation and consequent reconciliations. ||Adjustments in this respect in the opinion of the management are not likely to be material and would be carried out as and when ascertained. |
|2 ||Impairment of PPE [refer note no. 44 to the Ind AS financial statements] || |
| ||The management based on their review of assets and operation of the Company has determined that there is no indication of potential impairment and that the recoverable amount of its fixed assets is not lower than its carrying amount. ||Based on our observations no provision for impairment has been considered necessary as at March 31 2020 |
|3 ||Deferred Tax Assets\ Liabilities [refer note no. 12 to the Ind AS financial statements] || |
| ||Considering the probability of availability of future taxable profits in the period in which tax losses expire deferred tax assets have not been recognized in respect of unabsorbed depreciation business losses and long term capital losses carried forward by the Company. ||Deferred tax assets have not been recognized in respect of unabsorbed depreciation business losses and long term capital losses carried forward by the Company. |
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Management Discussion and Analysis Board's Report includingAnnexures to Board's Report and Corporate Governance but does not include the Ind ASfinancial statements and our auditor's report thereon. The above stated reports areexpected to be made available to us after the date of this auditor's report.
Our opinion on the Ind AS financial statements does not cover the other information andwe will not express any form of assurance conclusion thereon.
In connection with our audit of the Ind AS financial statements our responsibility isto read the other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the Ind ASfinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
When we read the above stated reports if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance.
Management's Responsibility for the 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 Ind AS financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and
cash flows of the Company in accordance with the Ind AS and other accounting principlesgenerally accepted in India. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the Ind AS financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.
In preparing the Ind AS financial statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Ind AS 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 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 Ind AS financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional 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) of theCompanies 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 Ind AS financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the Ind AS financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Ind AS financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the Ind AS financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies 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 Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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.
Report on Other Legal and Regulatory Requirements
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 Companies Act 2013 we give in the "Annexure A" a statementon the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
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 of the aforesaidInd AS financial statements.
b) In our opinion proper books of account as required by law relating to preparationof the aforesaid Ind AS financial statements have been kept by the Company so far as itappears from our examination of those books.
c) The company does not have any branches. Hence the provisions of section 143(3)(c)is not applicable.
d) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Changes in Equity and the Statement of Cash Flow dealt with bythis Report are in agreement with the books of account.
e) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
f) 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.
g) With respect to adequacy of internal financial controls over financial reporting ofthe Company and the operating effectiveness of such controls refer to our separate reportin "Annexure B"
h) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
i) In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 in our opinion and to the best of our information and according to the explanationsgiven to us:
(i) The Company has disclosed the impact of pending litigations on its financialposition as referred to the Ind AS financial statement.
(ii) The Company did not have any long-term contracts including derivative contracts;as such the question of commenting on any material foreseeable losses thereon does notarise.
(iii) There has been no delay in transferring amounts which were required to betransferred to the Investor Education and Protection Fund by the Company.
For GMJ & Co
(CA HARIDAS BHAT)
Membership No.: 039070
UDIN : 20039070AAAAEG1290
Place : Mumbai
Date : June 22 2020
TAINWALA CHEMICALS AND PLASTICS (INDIA) LIMITED Annexure 'A' to the IndependentAuditors' Report
(Referred to in paragraph 9 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)
i. (a) The company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.
(b) Property Plant and Equipment have been physically verified by the management atregular intervals which in our opinion is reasonable having regard to the size of thecompany and the nature of its assets. No material discrepancies were noticed on suchphysical verification.
(c) According to the information and explanation given to us and on the basis of ourverification title deeds of all immovable properties are held in the name of the company.
ii. As explained to us management has conducted physical verification of inventory atregular intervals during the year and no material discrepancies were noticed on suchphysical verification.
iii. The Company had granted unsecured loans to two companies in earlier years coveredin the register maintained under Section 189 of the Act.
(a) In our opinion the rate of interest and other terms and conditions of the grant ofsuch loans were not prima facie prejudicial to the interest of the company.
(b) The Principal amount and interest are payable on demand and therefore the questionof overdue amount as such does not arise. However receipt of interest is regular exceptfor a interest free loan of Rs. 39115941 which is fully provided for as doubtful.
(c) The Company is taking necessary steps for recovery of the above interest free loanhowever in our opinion more concerted efforts are needed to recover the same.
iv. In our opinion and according to the information and explanations given to usduring the year the Company has not granted any loans or provided any guarantees orsecurity in respect of any loans to any party covered under section 185 of the CompaniesAct 2013. In respect of loan has been given in the previous years the provision ofSection 186 of the Companies Act 2013 have been complied with.
v. In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits from public within the meaning of Section 73 to 76of the Companies Act 2013 and the rules framed there under.
vi. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Companies Act 2013 for any of the services rendered by the Company.Therefore the provisions of clause 3(vi) of the Order are not applicable to the company.
vii. (a) The company has been regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income tax Goods and service tax servicetax duty of customs cess and any other statutory dues have generally been regularlydeposited with the appropriate authorities. There are no outstanding dues as on the lastday of the financial year for a period of more than six months from the date they becamepayable.
According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were in arrears as at March 31 2020 for a periodof more than six months from the date they became payable.
viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to banks during the year under audit. Thereare no dues to Financial Institution Government and the Company has not issued anydebentures.
ix. According to the information and explanations given to us and based on the recordsand documents produced before us during the year the company has not raised money by wayof initial public offer or further public offer and the term loans have been applied forthe purposes for which they were obtained.
x. To the best of our knowledge and belief and according to the information given tous no material fraud by the company or on the company by its officers or employees hasbeen noticed or reported during the year.
xi. According to the information and explanations given to us and based on the recordsand documents produced before us managerial remuneration has been paid by the company inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.
xii. As the company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it therefore the provisions of clause (xii) of paragraph 3 of the Order are notapplicable to the company.
xiii. According to the information and explanation given to us all transactions withthe related parties are in compliance with Sections 177 and 188 of the Companies Act2013. The details of such related party transactions have been disclosed in the financialstatements as required under Indian Accounting Standard (Ind AS) 24 Related PartyDisclosures.
xiv. According to the information and explanations given to us and based on the recordsand documents produced before us the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.
xv. According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him underthe provisions of section 192 of Companies Act 2013.
xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934
For GMJ & Co
(CA HARIDAS BHAT)
Membership No.: 039070
UDIN : 20039070AAAAEG1290
Place : Mumbai
Date : June 22 2020
TAINWALA CHEMICALS AND PLASTICS (INDIA) LIMITED Annexure - 'B' to the Auditors' Report (Reporton the Internal Financial Controls under Clause (f) of Sub-section 3 of Section 143 of theCompanies Act 2013 ("the Act"))
We have audited the internal financial controls over financial reporting of "TAINWALACHEMICALS AND PLASTICS (INDIA) LIMITED" ("the Company") as of March31 2020 in conjunction with our audit of the Ind AS financial statements of theCompany for 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 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 ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 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 Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated 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. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment 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 systemover 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 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
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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312020 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
For GMJ & Co
(CA HARIDAS BHAT)
Membership No.: 039070
UDIN : 20039070AAAAEG1290
Place : Mumbai
Date : June 22 2020.