To The Members of M/s. Thangamayil Jewellery Limited Report on the Audit of theFinancial Statements Opinion
We have audited the accompanying Ind AS financial statements of M/s. ThangamayilJewellery Limited ("the Company") which comprise the Balance Sheet as at March312019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the Ind AS Financial statements"). Inour opinion and to the best of our information and according to the explanations given tous the aforesaid Ind AS Financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 312019 the profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for opinion
We conducted our audit of the Ind AS Financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Ind AS Financial statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the Ind AS Financial statements under theprovisions of the Act and the Rules made there under 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 audit opinion on the Ind AS Financial statements.
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. We have determined the matters described below to be the key audit mattersto be communicated in our report.
|S.No ||Key Audit Matter |
| ||Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115"Revenue from Contracts with Customers" (new revenue accounting standard) |
|1 ||The application of the new revenue accounting standard involves certain key judgments relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. Additionally new revenue accounting standard contains disclosures which involve collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. |
|S.No ||Auditor's Response |
|1 ||PRINCIPAL AUDIT PROCEDURES |
| ||We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. |
| ||Ourauditapproachconsistedtestingofthedesignandoperatingeffectivenessoftheinternalcontrolsandsubstantive testing as follows: |
| || Evaluated the design of internal controls relating to implementation of the new revenue accountings tandard. |
| || Selected a sample of transactions and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation re performance and inspection of evidence in respect of operation of these controls. |
| || Tested the relevant information technology systems' access and change management controls relating to Transactions and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard. |
| || Selected a sample ofTransactions and performed the following procedures: |
| ||- ReadanalyzedandidentifiedthedistinctperformanceobligationsintheseTransactions. |
| ||- ComparedtheseperformanceobligationswiththatidentifiedandrecordedbytheCompany. |
| || Considered the terms of the transaction to determine the price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration. |
| || Samples in respect of revenue recorded for materials were tested using a combination of approved value of materials including customer acceptances and disputes. |
| || Sample of revenues disaggregated by type and materials and products offerings was tested with the customer's acceptances. |
| || Performed analytical procedures for reasonableness of revenues disclosed by type and product offerings. |
| ||We reviewed the collation of information used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. |
2. Key Audit Matter
Evaluation of uncertain tax positions
The Company has material uncertain tax positions including matters under dispute whichinvolves significant judgment to determine the possible outcome of these disputes.
Principal Audit Procedures
Obtained details of completed tax assessments and demands for the year ended March312019 from management. We involved our internal experts to challenge the management'sunderlying assumptions in estimating the tax provision and the possible outcome of thedisputed taxes. Our internal experts also considered legal precedence and other rulings inevaluating management's position on these uncertain tax positions.
Information Other than the Ind AS Financial statements and Auditor's ReportThereon:
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexure to Board's Report Business
Responsibility Report Corporate Governance and Shareholder's Information but does notinclude the Ind AS Financial statements and our auditor's report thereon. Our opinion onthe Ind AS Financial statements does not cover the other information and we do not expressany form of assurance conclusion thereon. In connection with our audit of the Ind ASFinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the Ind ASFinancial statements or our knowledge obtained during the course of our audit or otherwiseappears to be materially misstated. If based on the work we have performed we concludethat there is a material misstatement of this other information we are required to reportthat fact. We have nothing to report in this regard.
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 withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Ind AS Financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error. In preparing the Ind AS Financial statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. The Board of Directors isresponsible for overseeing the Company's financial reporting 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 financial controls relevant to 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 system in place and the operatingeffectiveness 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 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 financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the 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 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in"Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.
As required by Section 143(3) of the Act based on our audit we report that :
We have sought and obtained all the information and explanations which to thebest of our knowledge and belief were necessary for the purposes of our audit.
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.
The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the relevant books of account.
In our opinion the aforesaid Ind AS Financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
On the basis of the written representations received from the directors as onMarch 312019 taken on record by the Board of Directors none of the directors isdisqualified as on March 312019 from being appointed as a director in terms of Section164 (2) of the Act.
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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
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 andaccording to the explanations given to us the remuneration paid by the Company to itsdirectors during the year is in accordance with the provisions of section 197 of the Act.
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 :
The Company has disclosed the impact of pending litigations on itsfinancial position in its Ind AS Financial statements.
The Company has made provision as required under the applicable law oraccounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts.
There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
For Srinivas & Padmanabhan
F.Reg No: 004021S
Place : Madurai
Date : May 222019
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report to the Members of Thangamayil Jewellery limited of even date)
i) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As per the information and explanations given to us physical verification of fixedassets has been carried out in terms of the phased programme of verification adopted bythe company and no material discrepancies were noticed on such verification. In ouropinion frequency of verification is reasonable having regard to the size of the companyand nature of business.
(c) According to the information and explanation given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties of theCompany are held in the name of the Company.
ii) (a) The inventories have been physically verified at reasonable intervals duringthe year by the management including inventory
given to third parties / gold smiths on job work basis. In our opinion the frequency ofsuch verification is adequate.
(b) In our opinion and according to the information and explanations given to us theprocedures for physical verification of inventory followed by the management werereasonable and adequate in relation to the size of the company and the nature of itsbusiness.
(c) In our opinion the company has maintained proper records of inventory. We areinformed that no major discrepancies were noticed on verification between the physicalstock and book records.
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. Accordingly sub Clause (a)(b) and (c) ofthe Order are not applicable to the Company.
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 Companies Act 2013in respect of loans given and investment made. Furtherthere are no guarantees andsecurity given in respect of which provisions of section 185 and 186 of the Act areapplicable.
v) The Company has complied with the provision of Section 73 to 76 or any otherrelevant provisions of the Act and the Companies
(Acceptance of Deposits) Rules 2014 with regard to deposits accepted from public.Accordingly there have been no proceedings before the Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in thismatter and no order has been passed by any of the aforesaid authorities.
vi) The Central Government has not prescribed the maintenance of cost records underSection 148 of the Act for any of the products manufactured by the Company.
vii) (a) According to the records provided to us the Company is regular in depositingwith the appropriate authorities undisputed statutory dues including provident fundemployees' state insurance income- tax sales tax customs duty excise duty valueadded tax cess and other material statutory dues applicable to the Company.
According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were in arrears as at 31st March 2019 for aperiod of more than six months from the date they become payable.
b) According to the information and explanations given to us there are no materialdues of duty of customs which have not been deposited with the appropriate authorities onaccount of any dispute. However according to information and explanations given to usthe following dues of income tax sales tax duty of excise service tax value added taxand GST have not been deposited by the Company on account of disputes;
|Name of the Statue || ||' Lakhs ||Period to which the amount relates ||Forum where disputes is pending |
|Tamil Nadu Value Added Tax 2006 ||Disallowance of Input tax disputes related classification of sale of Goods ||49.96 ||2006 - 07 to 2009 -10 ||High Court of Madras and Commissioner (Appeals) of Sales Tax |
|Customs Act 1962 ||Customs Duty ||154.00 ||2011-12 ||High Court of Madras |
|Income Tax Act 1961 ||Disallowance u/s 35D ||55.32 ||2010 -11 to 2014 -15 ||Commissioner of Income Tax (Appeals I) |
viii) Based on our audit procedures and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings to afinancial institution bank government or dues to debenture holders. There were nodebenture holders at any time during the year.
ix) In our opinion and according to the information and explanations given to us theCompany did not raise any money by way of initial public offer or further public offer(including debt instruments) and term loans during the year. Accordingly paragraph 3(ix)of the Order is not applicable to the Company.
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 paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
xii) In our opinion the company is not a Nidhi Company. Therefore the provisions ofclause 3 (xii) of the Companies (Auditor's Report) Order 2016 are not applicable to theCompany.
xiii) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the financial statements as required by the applicable accounting standards.
xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review and therefore the provisions ofclause 3(xiv) of the Companies (Auditor's Report) Order 2016 are not applicable to theCompany.
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) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.
|For Srinivas & Padmanabhan || |
|Chartered Accountants || |
|F.Reg No: 004021S || |
|K.M.Padmanabhan || |
|Partner ||Place : Madurai |
|M.No: 026594 ||Date : May 22 2019 |
Annexure - B to the Auditors' Report
Report on the Internal Financial Controls over financial under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ThangamayilJewellery Limited ("the Company") as of 31 March 2019 in conjunction with ouraudit of the Ind AS financial statements of the Company for the year ended on that datewhich includes a jointly controlled operation.
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 Reporting (the " Guidance Note") issued by the Institute of Chartered Accountants of India('ICAI'). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information 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 issued by ICAI and the Standards on Auditing prescribed undersection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls.Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
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 to the best of our information and according to theinformation given to us 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 31 March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theInstitute of Chartered Accountants of India.
For Srinivas & Padmanabhan
F.Reg No: 004021S
Partner M.No: 026594
Place : Madurai Date : May 22 2019