INDEPENDENT AUDITOR'S REPORT
To the Members of TCI DEVELOPERS LIMITED
Report on the Audit of Ind AS Financial Statements
1. We have audited the accompanying Ind AS Standalone financial statements of TCIDEVELOPERS LIMITED ("the Company") which comprise the Balance Sheet as at 31stMarch 2019 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the statement of change in Equity forthe year then ended and notes to the standalone financial statements including thesummary of the significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2019 and total comprehensive income (comprising of profit andother comprehensive income) its cash lows and changes in equity for the year ended on thatdate.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibility under those standards are furtherdescribed in the Auditor's Responsibility for the Audit of the Financial Statements'section of our report. We are independent of the company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our Audit of The Financial Statements under theprovision of the Act and the Rules thererunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
4. We did not audit the financial information as regards Company's share in Profit ofpartnership firm (post tax) amounting to Rs.119.21 Lakhs for the year ended March 312019. The financial information has been audited by other auditors whose reports have beenfurnished to us and the Company's share in profits of partnership firm investments hasbeen included in the accompanying standalone Ind AS financial statements solely based onthe report of other auditors.
Our opinion is not qualified in respect of these matters.
Key Audit Matters
5. Key audit matters are those matters that in our professional judgment were of mostsignificance in our Audit of 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. We have determined the matters below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theauditor's responsibilities for the audit of the IND AS financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessments of the risks of materialmisstatement of the IND AS financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying IND AS financial statements
|Key audit maters ||How the mater was addressed in our audit |
|Recovery of MAT credit entitlement in future (as described in note 12 of the IND AS financial Statements) || |
|The Company does not have taxable income owing to brought forward loss and unabsorbed depreciation and therefore it has been paying Minimum Alternative Tax (Mat) under Income Tax Act 1961. The Act also provides that such MAT paid can be carried forward (MAT credit entitlement) for set off against regular tax payable in subsequent fifteen year period. Such MAT credit entitlement are recognized when it is probable that normal taxable profit will be available against which these MAT credits can be utilized ||Following procedures have been performed to address this key audit matter.. |
| || We have carried out testing of the design and implementation as well as operation effectiveness of key controls related to the calculation and recognition of such MAT credit |
| || We have assessed the appropriateness of the mythology applied by the Company with current accounting standards and applicable taxation laws along with the future business forecast of taxable profits. |
|The Company's ability to recognize these MAT credit assets is assessed by management at the end of each reporting period taking into account forecast of future taxable profit and the law and jurisdiction of the land in force. The assumption on these projections are determined by management. || We have assessed the likelihood of the Company to utilize the available MAT credit entailment in the future with underlying projections and assumption relating to future estimated profits future capitalization and depreciation allowance thereon and future estimates of taxable income. |
|At March 31 2019 MAT credit entitlement recognized in the Company's financial statements totaled Rs 144.10 lacs. || We have re-calculated the future taxability workings obtained from the management to check the arithmetical accuracy of the working. |
|Given the degree of judgment involved in making a forecast of the profitability of the Company and the materiality of the amounts involved. We deemed this issue to be a key audit matter. || We have also checked the adequacy of the disclosure on these matters in the financial statement of the Company |
We have determined that there are no other key matters to communicate in our reports.
6. The company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the annual report but does include theStandalone financial statements and our auditor's report thereon.
7. Our opinion on the Standalone financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
8. In connection with our audit of the standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is material ly inconsistent with the financial statements or ourknowledge obtain in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of theother information we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of management and those charged with the governance for the financialstatements.
9. 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 Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash lows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 and thecompanies (Indian Accounting Standards) Rule 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.
10. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelating to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the company or to cease operations or has norealistic alternative but to do so. The Board of Directors are also responsible foroverseeing the company's financial reporting process. Auditors Responsibilities for theaudit of Financial Statements.
11. 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 financial statements.
12. 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 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.
Obtain an understanding of internal financial controls relevant tc the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls with reference to financial statementssystem in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
13. 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.
14. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
15. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the 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
16. As required by section 143(3) of the Act we further 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 purpose of our audit.
b. In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
c. The Balance Sheet Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;
d. In our opinion the aforesaid Ind AS financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 Companies (Indian Accounting Standards) Rules 2015 as amended;
e. On the basis of written representations received from the directors as on March 312019 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure A"; and
g. With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest 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 derivative contracts;as such the question of commenting on any material foreseeable losses thereon does notarise.
(iii) There has not been an occasion in case of the Company during the year underreport to transfer any sums to the Investor Education and Protection Fund. The question ofdelay in transferring such sums does not arise.
17. 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 the "Annexure B" statement on the matters Specified inparagraphs 3 and 4 of the Order.
Annexure A - 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")
1. We have audited the internal financial controls with reference to StandaloneFinancial Statements of TCI DEVELOPERS LIMITED ("the Company") as of 31 March2019 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
2. 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.
3. 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.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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 procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.
5. 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 systemwith reference to financial statements.
Meaning of Internal Financial Controls over Financial Reporting
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly relect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
7. 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.
8. In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlswith reference to Standalone financial statements were operating effectively as at 31March 2019 based on the internal control over financial reporting criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.
Annexure- B' referred to in Independent Auditors' Report to the members of theCompany on the financial statements for the year ended 31st March 2019 wereport that
(i) In respect of Company's fixed assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets ;
b) As explained to us fixed assets have been physically verified by the management atreasonable intervals. According to the information and explanation given us no materialdiscrepancies were noticed on such verification;
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 immovable property held inthe name of company except as mentioned below:
|Particulars ||Land ||Building ||Remarks |
|Total No of cases ||4 ||4 ||These immovable properties had come to the company from Transport corporation of India ltd (TCIL) pursuant to a scheme of arrangement as approved by the Honorable High court of Andhra Pradesh vide its order dated 15-09-2010 in the accounting year 2010-11. The title of these immovable properties continued to be in the name of TCIL and are in the process of transfer in the company's name |
|Whether Leasehold/ Freehold ||Freehold ||Freehold |
| || ||(Rs in Lakhs) |
|Gross Block as on 31st March 2019 ||152.57 ||1135.77 |
|Net Block as on 31st March 2019 ||152.57 ||1070.66 |
(ii) a) The inventories have been physically verified at reasonable intervals by themanagement.
b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.
(iii) The company had granted loan to a wholly owned subsidiary company as covered inthe register maintained under section 189 of the Companies Act 2013.
a) In our opinion and according to the information and explanations given to us theterms and conditions of the grant for such Loan are not prejudicial to the Company'sinterest.
b) The unsecured Loan are repayable after 2 years. The payment of interest is regularas per the agreed terms.
c) There are no overdue amounts in respect of the loan granted to a body corporatelisted in the register maintained under section 189 of the Act.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
(v) The Company has not accepted any deposits from the public.
(vi) As informed to us the Central Government has not prescribed maintenance of costrecords under sub-section (1) of Section 148 of the Act.
(vii) According to the information and explanations given to us in respect ofstatutory dues:
(a) The company is generally regular in depositing the undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Sales-tax Wealth TaxGoods and Services Tax Custom Duty Excise Duty and other statutory dues as applicablewith the appropriate authorities in India;
(b) There are no dues of Income Tax Wealth Tax Goods and Services Tax Sales TaxCustoms Duty and Excise Duty which have not been deposited on account of any disputes;
(viii) According to the records of the company examined by us and as per theinformation and explanations given to us the company has not defaulted in repayment ofloans from any financial institution or banks and has not issued debenture.
(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. Accordinglyparagraph 3 (ix) of the Order is not applicable.
(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has provided for managerialremuneration in accordance with the provisions of section 197 read with Schedule V to theAct.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(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 give 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.
(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 paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For Luharuka & Associates
Firm Reg No: - 01882S
Date: 24th May 2019