The Members of TGV SRAAC LIMITED
Report on the Audit of Financial Statements Opinion
We have audited the financial statements of TGV SRAAC Ltd ("the Company")which comprise the balance sheet as at 31st March 2021 the statement of profit and loss(including Other Comprehensive Income) statement of changes in equity and statement ofcash flows for the year then ended and notes to the financial statements including asummary of significant 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 financial statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the Indian accounting standards prescribed under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31stMarch 2021 and its profit total comprehensiveincome the changes in equity and its cash 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 financial statements under theprovisions of the Act and the Rules thereunder 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.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
|Key audit matters ||How the matter was addressed in our audit |
|Allowance for credit losses There is significant judgement involved in the calculating of allowances for credit losses. So we have identified this as a key audit matter. Considering the pandemic relating to COVID-19 the Company has based on current available information determined the prudential estimate of provision for impairment of financial assets. Given the uncertainty over the potential macro-economic impact the Company management has considered all available internal and external information including credit reports and economic forecasts up to the date of approval of these financial results. ||Performed process walkthrough and assessed the Company's accounting policies for impairment of financial assets and their compliance with Ind AS 109. |
|Accordingly the Company has made prudential estimate of provision for expected credit loss on financial assets as at 31stMarch 2021. The Company considers this provision to be adequate and expects to recover the carrying amount of these financial assets. ||We tested the methodology for allowance of credit losses completeness and accuracy of information used for estimating probability of default and computation of allowance for expected credit losses. |
| ||Assessed the appropriateness of the disclosure in the financial statements. |
|Income tax ||We performed audit procedures on the calculation and valuation of current tax and deferred tax. |
|Income tax is a key audit matter because of the judgments and estimates involved and the amount of income taxes is material to the financial statements as a whole. The Company makes judgements and estimates in connection with income taxes resulting in recognition of deferred tax assets and liabilities as well as tax provisions. ||Procedures include inquiring with management on the tax issues raisedby the tax authorities and assessing their impact to thefinancial statements. We evaluated the appropriateness of the recognition principles and the sufficiency of the given disclosures. |
Emphasis of matter
We draw attention to Note 2(X) to the Ind AS financial statements which describes theCompany's assessment to reflect the adverse business impact and uncertainties arising fromthe COVID 19 pandemic. Based on these assessments the management has concluded that theCompany has determined the prudential estimate of provision for impairment of financialassets.
Such estimates or assessments are based on the current facts and circumstances and maynot necessarily reflect the future uncertainties and events arising from the impact of theCOVID 19 pandemic.
Our opinion is not modified in respect of this matter.
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditor's reportthereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Responsibilities of Management and those charged with governance for the financialstatements
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 financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from material misstatement whether due to fraud or error.
In preparing the financial statements the Board of Director is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of Financial Statement
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these 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 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 todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act 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.
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.
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 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.
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 the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act based on our audit 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 including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisreport are in agreement with the books of account;
d) in our opinion the aforesaid financial statements comply with the Indian AccountingStandards prescribed under section 133 of the Act;
e) on the basis of the written representations received from the directors of theCompany as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164(2) of the Act;
f) with respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate report in"AnnexureB". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols with reference to financial statements;
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 by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
h) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. the Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 27 to the Ind AS financial statements;
ii. the Company did not have any long-term contracts including derivative contracts; assuch there were no material foreseeable losses thereon;
iii. there are no amounts which are required to be transferred to the InvestorEducation and Protection Fund; therefore delay in transferring such sums does not arise.
|Place: Hyderabad ||for K S RAO & CO Chartered Accountants Firm's Regn. No. 003109S Sd/- CA P.GOVARDHANA REDDY Partner Membership No.029193 |
|Date: 3rd June 2021 ||UDIN:21029193AAAAIJ4494 |
ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)
i) in respect of the Company's fixed assets:
a) the Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
b) the Company has a program of verification to cover all the items of fixed assets ina phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies 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 all immovable properties areheld in the name of the Company except the title to the property of 12.17 acres of landsituated in Bellary amounting to Rs. 15.29 Lakhs acquired by the Company from KarnatakaIndustrial Area Development Board (KIADB) is in the process of being transferred in theCompany's name.
ii) in respect of Company's inventory: the physical verification of inventory has beenconducted at reasonable intervals by the management during the year and no materialdiscrepancies were noticed on physical verification and the small discrepancies if anyhave been properly dealt with in the books of account;
iii) according to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under Section 189 of theAct;
iv) in our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable;
v) the Company has not accepted deposits from public during the year and does not haveany unclaimed deposits as at 31stMarch 2021 and therefore the provisions of the clause 3(v) of the Order are not applicable to the Company;
vi) the maintenance of cost records has been specified by the Central Government underSection 148(1) of the Act. We have broadly reviewed the cost records maintained by theCompany pursuant to the Companies (Cost Records and Audit) Rules 2014 as prescribed bythe Central Government under sub-section (1) of Section 148 of the Act and are of theopinion that prima facie the prescribed cost records have been made and maintained.
We have however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete;
vii) according to the information and explanations given to us in respect of statutorydues:
a. the Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Goods and Service Tax(GST) Customs Duty Cess and other material statutory as applicable with the appropriateauthorities;
b. there were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Goods and Service Tax (GST) Customs Duty Cess and othermaterial statutory dues in arrears as at 31stMarch 2021 for a period of more than sixmonths from the date they became payable;
c. details of dues of Sales Tax Value Added Tax Customs PF Electricity Water whichhave not been deposited as at 31st March 2021 on account of dispute are given below:
|Name of the Statute ||Nature of dues ||Amount (Rs. in lakhs) ||Period to which the amount relates ||Forum where dispute is pending |
|AP VAT Act 2005 ||Interest on delay payment of deferred sales tax ||154.29* ||2005-06 & 2006-07 ||High Court of Andhra Pradesh Amaravati |
|Karnataka Tax on entry of goods Act 1979 ||Entry tax on purchase of machinery items and interest ||1.78* ||2006- 07 2007- 08 2009-10 ||Dy. Commissioner of Commercial Taxes Bellary |
|Andhra Pradesh entry tax act 2001 ||Entry tax on purchase of Electrical Equipments ||63.77* ||2014- 15 2015- 16 2016- 17 2017- 18 ||High Court of Andhra Pradesh Amaravati |
|Indian Customs Act 1962 ||Customs Duty claimed on raw materials ||1036.14* ||2000-2006 ||Commissioner of customs Chennai |
|Indian Customs Act 1962 ||Finalisation of assessed bill of entries pertaining to KCL ||7.05 ||2006-07 ||Dy. Commissioner of Customs Alibag division Raigad Maharastra |
|Indian Customs Act 1962 ||Anti-dumping duty on import of Barium Carbonate ||32.69 ||2010-11 ||Joint commissioner of Customs Chennai |
|Indian Customs Act 1962 ||Differential duty on classification of goods disputed (Lauric Acid) ||9.63 ||2014-15 ||CustomsExcise and Service Tax Appellate Tribunal Chennai |
| || ||10.51 ||2014-15 ||Assistant Commissioner Customs Chennai |
|Employees Provident Fund and Miscellaneous Provisions Act 1952 ||PF delay charges/ damages for belated payments ||15.34 ||May 2002 to Dec 2007 ||Employees Provident Fund Appellate Tribunal New Delhi. |
|The Electricity Act 2003 ||Fuel Surcharge Adjustment(FSA)charges ||871.93 651.87 ||2008- 09 2009- 10 ||Supreme Court of India |
|The Electricity Act 2003 ||Interest on amount spending in court cases ||1437.14 ||From 2014-15 to March 2018 ||High Court of Andhra Pradesh Amaravati |
|The Electricity Act 2003 ||Electricity Duty Demand ||551.44 ||July 2003- May 2013 ||Supreme Court of India Delhi |
|The Electricity Act 2003 ||Fuel Surcharge Adjustment(FSA) charges ||1591.38 ||May & June 2010 and October 2011 to March2012 ||High Court of Andhra PradeshAmaravati |
| ||Levy of interest by APCPDCL on FSA Charges ||598.17 || || |
|The Electricity Act 2003 ||Wheeling charges on wind generation ||24.21 ||August 2002 ||Supreme court of India |
|The Electricity Act 2003 ||Power supply made by APGPCL not credited fully in the power bills raised by APSPDCL ||2846.00 ||June 2020 to March 2021 ||High Court of Andhra Pradesh Amaravati |
|IGST ACT 2017 ||Error in GST E Way Bill Levied IGST & Extra 100% of IGST ||5.17 ||February 2019 ||Joint Commissioner Appeal IV Uttarakhand |
|AP VAT Act ||Disallowance of VAT Input Tax Credit supplier has not paid tax ||1.48 ||June 2017 ||Appellate Deputy Commissioner Tirupathi |
|The Andhra Pradesh Irrigation Utilisation and Command Area Development Act 1984 ||Increase in water rate made by Andhra Pradesh Government through GO for using river water ||128.70 ||February 2014 to March 2021 ||High court of Andhra Pradesh Amaravati |
*Net of amounts paid under protest.
viii) in our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to financialinstitutions banks and government. The Company has not issued any debentures;
ix) in our opinion and according to the information and explanations given to us moneyraised by way of term loans have been applied by the Company during the year for thepurposes for which they were raised. The Company has not raised moneys by way of publicoffer;
x) to the best of our knowledge and according to the information and explanations givento us no fraud by the Company and no fraud on the Company by its officers or employeeshas been noticed or reported during the year;
xi) in our opinion and according to the information and explanations given to us andbased on our examination of the records 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) the Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 Order is not applicable;
xiii) in our opinion and according to the information and explanations given to us theCompany is in compliance with Section 188 and 177 of the Act where applicable for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the financial statements etc as required by the applicable accountingstandards;
xiv) in our opinion and according to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of fully or partly convertible debenturesduring the year under review.The company has made preferential allotment of Share Warrantsand allotment of shares by conversion of warrants during the year under review. Therequirements of section 42 of the Act have been complied with and the amounts raised havebeen used for the purpose for which the funds were raised;
xv) in our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with its directors and hence provisions of Section 192 ofthe Act are not applicable;
xvi) the Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
| ||for K S RAO & CO |
| ||Chartered Accountants Firm's Regn. No. 003109S |
| ||Sd/- |
| ||CA P.GOVARDHANA REDDY |
|Place: Hyderabad |
Date: 3rd June 2021
|Partner Membership No.029193 UDIN:21029193AAAAIJ4494 |
ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report on the Internal Financial Controls Over Financial Statements under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial statements of TGV SRAACLtd ("the Company") as of 31st March 2021 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control with reference to financialreporting 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. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and 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 internal financial controls withreference to financial reporting of the Company based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section143(10) of theAct to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to financial statements was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements 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 systemwith reference to financial statements.
Meaning of Internal Financial Controls Over Financial Statements
A company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statements 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 Ind AS financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Limitations of Internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper management override of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at 31st March 2021 basedon the internal control with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.
| ||for K S RAO & CO |
| ||Chartered Accountants Firm's Regn. No. 003109S |
| ||Sd/- CA P.GOVARDHANA REDDY |
|Place: Hyderabad |
Date: 3rd June 2021
|Partner Membership No.029193 UDIN:21029193AAAAIJ4494 |