To the Members of M/s. Tanvi Foods (India) Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of M/s. Tanvi Foods( India) Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2019 the Statement of Profit and Loss and the Statement of Cash flows forthe year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the State ofaffairs of the Company as at March 31 2019 and its Profit and its Cash flows for theyear 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 Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on theStandalone Financial Statements.
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 in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
|Key Audit Matter ||How the matter was addressed in the Audit |
|The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. ||Obtained details of completed tax assessments and demands upto the Financial year ended March 31 2019 from management along with the further course of action adopted by the management. |
|Refer Note 40 to the Financial Statements ||We read and analysed various submissions to the Statutory Authorities in respect of the assessments mentioned above and considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions; |
| ||We advised the management to disclose the comprehensive summary of the cases pending along with the outstanding amount in Financial Statements and accordingly the same was disclosed under "Contingent Liabilities" in Note number 40 which has been duly verified by us. |
The Company's Board of Directors are responsible for the other information. The otherinformation comprises the information included in the annual report for exampleManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the standalone financial statements and our auditor's report thereon. Theother information as stated above is expected to be made available to us after the date ofthis auditor's report.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
When we read the other information as stated above if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith Governance
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 Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the Financialposition Financial performance and Cash flows of the Company in accordance with theAccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate implementation and maintenance ofaccounting 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 financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements the Board of Directors / Management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the Going concernbasis of accounting unless the Board of Directors / Management either intends to liquidatethe Company or to cease 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 Responsibility for the Audit of the 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 high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with the SAs we exercise Professional Judgment andmaintain Professional Skepticism throughout the audit.
1. Identify and assess the risks of material misstatement of the standalone 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.
2. 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 theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls
3. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
4. 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 standalone 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.
5. Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
6. Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.
7. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit
8. 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.
9. From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
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 Companies Act 2013 we give in the Annexure A a statement on the mattersspecified in paragraphs 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 and the Cash Flow Statementdealt 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 Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof 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".
g) 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 opinionand to the best of our information and according to the explanations given to us theremuneration paid/provided by the company to its directors during the year is inaccordance with the provisions of the 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 financial statements Refer Note 40 to the financial statements;
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
Annexure - A to the Auditors' Report
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the Standalone Financial Statements as at March 31st 2019 we report that:
(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The fixed assets are physically verified by the management according to a phasedprogramme designed to cover all items which in our opinion is reasonable having regardto the size of the Company and the nature of its assets. Pursuant to the programme aportion of the fixed assets has been physically verified by the management during the yearand no material discrepancies have been noticed on such verification and the same havebeen properly dealt with in the books of account.
c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of the immovable property areheld in the name of the company.
(ii) a) The inventory has been physically verified by the management during the year.In our opinion the frequency of verification is reasonable.
b) In our opinion the procedures of physical verification of inventory followed by themanagement are reasonable and adequate in relation to the size of the Company and natureof its business.
c) On the basis of our examination of the inventory records in our opinion theCompany is maintaining proper records of inventory. The discrepancies noticed on physicalverification of inventory as compared to book records were not material.
(iii) a) The company has not granted any loans secured or unsecured to companiesfirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013.
b) In case of loans granted to companies firms Limited Liability Partnerships orother parties listed in the register maintained under section 189 of the Act theborrowers have been regular in the payment of interest as stipulated. The terms ofarrangements do not stipulate any repayment schedule and the loans are repayable ondemand. Accordingly paragraph 3 (iii) (b) of the order is not applicable to the companyin respect of repayment of principal amount.
c) There are no overdue amounts in respect of the loans granted to companies firmsLimited Liability Partnerships or other parties listed in the register maintained undersection 189 of the Companies Act 2013 (The Act).
(iv) In our opinion and according to the information and explanations given to us theCompany has not given any Loans made investments of provided Securities to Companies andother parties listed under section 185 and 186 of the Act
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from the public during the year. Therefore theprovisions of Sec 73 to 76 and the rules framed there under are not applicable to theCompany.
(vi) The maintenance of cost records has not been prescribed by the Central Governmentunder section 148(1) of the Companies Act 2013 in respect of the Company's operations.Therefore the provisions of Clause 3(vi) of the Order are not applicable to the Company.
(vii) a) According to the information and explanations given to us and on the basis ofour examination of the records the Company is generally regular in depositing undisputedstatutory dues including Provident fund Employee State Insurance Income-tax Sales taxValue Added Tax Duty of Customs Goods and Service tax Cess and other material statutorydues during the year with the appropriate Authorities.
b) According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employee State Insurance Income-tax Sales taxValue Added Tax Duty of Customs Goods and Service tax Cess and other material statutorydues were in arrears as at March 31st 2019 for a period of more than sixmonths from the date they became payable.
(viii) According to the information and explanations given to us there are no materialstatutory dues including Sales tax Value Added Tax Duty of Customs Goods and ServiceTax Cess and any other material statutory dues pending for deposit with the appropriateauthorities on account of any dispute except as follows;
|Sl. No. ||Name of the Statue ||Nature of Dues ||Disputed Amount ||Period (Financial Year) ||Forum where the dispute is pending ||Amount deposited towards disputed demand amount |
|1 ||Income Tax Act 1961 ||Income Tax ||9510208 ||2012-13 ||The Income Tax Appellate Tribunal ||1000000 |
|2 ||Income Tax Act 1961 ||Interest on Income Tax ||4509652 ||2012-13 ||(ITAT) || |
|3 ||Income Tax Act 1961 ||Income Tax ||5559345 ||2013-14 ||The Income Tax Appellate Tribunal ||1178115 |
|4 ||Income Tax Act 1961 ||Interest on Income Tax ||2294758 ||2013-14 ||(ITAT) || |
|5 ||Income Tax Act 1961 ||Income Tax ||8698400 ||2014-15 ||The Income Tax Appellate Tribunal ||1687586 |
|6 ||Income Tax Act 1961 ||Interest on Income Tax ||2570160 ||2014-15 ||(ITAT) || |
|7 ||Income Tax Act 1961 ||Income Tax ||2487045 ||2015-16 ||The Commissioner of Income Tax (Appeals) || |
(ix) Based on our audit procedures and according to the information and explanationsgiven to us we are of the opinion that the Company has not defaulted in repayment of duesto financial institutions banks and debenture holders.
(x) The Company did not raise any money by way of Initial Public Offer or FurtherPublic Offer (including debt instruments). The Company has raised new term loans duringthe year. The term loans outstanding at the beginning of the year and those raised duringthe year have been applied for the purposes for which they were raised.
(xi) According to the information and explanations given to us no material fraud bythe Company or on the Company by its officers or employees has been noticed or reportedduring the course of our audit.
(xii) 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
(xiii) In our opinion and according to the information and explanations given to usthe Company is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiv) According to the information and explanation 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.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company during the year has madeallotment of 500000 equity shares pursuant to exercise of option of Warrant holders forconversion of warrants into Equity shares by paying the balance amount of consideration.In our opinion and according to the information and explanations given to us and based onour examination of the records of the Company the company has complied with therequirements of Section 42 of the Companies Act 2013 and the amount raised have beenutilized for the purpose for which the funds were raised.
(xvi) 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.
(xvii) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 As a Non-Banking Financial Company.
Annexure - B to the 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 over financial reporting of M/sTanvi Foods ( India) Limited ("the Company") as of March 31 2019 inconjunction with our audit of the Standalone Financial Statements of the Company for theyear 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required 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 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 authorizations ofmanagement and directors of the company; and ( 3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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.
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 31st 2019based on the 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 GV & Co.
Firm Regn No. 012875S
Place : Hyderabad
Date : May 30 2019