The Investment Trust of India Ltd.
|BSE: 530023||Sector: Financials|
|NSE: THEINVEST||ISIN Code: INE924D01017|
|BSE 00:00 | 04 Mar||97.45||
|NSE 00:00 | 04 Mar||97.20||
|Mkt Cap.(Rs cr)||502|
|Mkt Cap.(Rs cr)||502.06|
The Investment Trust of India Ltd. (THEINVEST) - Auditors Report
Company auditors report
To the Members of The Investment Trust of India Limited. (FormerlyKnown as Fortune Financial Services (India) Limited)
Report on the Audit of the Standalone Financial Statements: Opinion
We have audited the standalone financial statements of The InvestmentTrust of India Limited (Formerly Known as Fortune Financial Services (India) Limited)("the Company") which comprise the balance sheet as at 31st March 2019 and thestatement of Profit and Loss statement of changes in equity and statement of cash flowsfor the 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 theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India: a) Inthe case of the Balance Sheet of the state of affairs of the Company as at March 31 2019b) In the case of the Statement of Profit and Loss of the loss and total comprehensiveloss of the Company for the year ended on that date; c) In the case of the Statement ofChanges in Equity of the changes in equity of the Company for the year ended on thatdate; d) In the case of the Statement of Cash Flow of the cash flows of the Company forthe year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Financial 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 Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide a separateopinion on these matters.
We have determined the matters described below to be the key auditmatters to be communicated in our report.
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the HoldingCompany's Annual report but does not include the financial statements and ourauditor's report thereon. The Director's report is expected to be made availableto us after the date of this report.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the Director's report if we conclude that there is amaterial misstatement therein we will communicate the matter to those charged withgovernance and will take appropriate action as per applicable laws and regulations.
Responsibilities of Management and Those Charged with Governance forthe Financial Statements
The Company's Management and Board of Directors are responsiblefor the matters stated in section 134(5) of the Act with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows 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 accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and 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 statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements Management is responsible forassessing 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.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the FinancialStatements:
Our objectives are to obtain reasonable assurance about whether thefinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain 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 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 thereasonableness of accounting estimates and related disclosures made by Management.
Conclude on the appropriateness of Management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause theCompany to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant defficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of subsection(11) of section 143 of the Act we give in the Annexure A a statement on thematters specified in the paragraph 3 and 4 of the Order to the extent applicable.
2. As required by Section 143 (3) of the Act we report that: a. Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit; b. In our opinionproper books of account as required by law relating to preparation of the financialstatements have been kept by the Company so far as it appears from our examination ofthose books; c. The balance sheet the statement of profit and loss and the cash flowstatement dealt with by this Report are in agreement with the books of account maintainedfor the purpose of preparation of these financial statements; d. In our opinion theaforesaid financial statements comply with the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014; e. Onthe basis of the written representations received from the directors as on March 31 2019taken on record by the Board of Directors none of the directors is disqualified as onMarch 31 2019 from being appointed as a director in terms of 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"; and
3. With respect to the other matters to be included in theAuditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us: i. The Company's Financial Statements disclose the impactof pending litigations on the financial position of the Company in Note 43 to thefinancial statements. ii. The Company does not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses. iii. There hasbeen no delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund by the Company.
In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act.
Annexure - A to the Independent Auditors' Report
(Referred to in paragraph 1 under Report on Other Legal andRegulatory Requirements' section of our report of even date for the year ended March31 2019)
Report on Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of Section 143(11) of theCompanies Act 2013 ("the Act") of the Company. a. The Company hasmaintained proper records showing full particulars including quantitative details andsituation of fixed assets. b. The Company has a regular programme of physical verificationof its fixed assets by which all the assets have been physically verified by theManagement during the year at regular intervals which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification. c. According to the information and explanations given to us and on thebasis of our examination of the records of the Company the Company does not have anyimmovable properties. Accordingly Paragraph 3(i)(c) of the order is not applicable. i.According to the information and explanations given to us the Management has conductedphysical verification of inventory at reasonable intervals and no material discrepancieswere noticed in physical verification. In our opinion the frequency of such verificationis reasonable. ii. The Company has granted unsecured loans to companies covered in theregister maintained under section 189 of the Act; and with respect to the same: a. In ouropinion the rate of interest and other terms and conditions on which the loans had beengranted to the companies listed in the register maintained under Section 189 of the Actwere not prima facie prejudicial to the interest of the Company. b. In the case of theloans granted to the companies listed in the register maintained under section 189 of theAct the borrowers have been regular in the payment of the principal and interest asstipulated. c. There are no overdue amounts in respect of the loan granted to thecompanies listed in the register maintained under section 189 of the Act. iii. In ouropinion and according to the information and explanations given to us the Company hascomplied with the provisions of section 185 and 186 of the Act with respect to grant ofloans making investments and providing guarantees and securities as applicable. iv. TheCompany has not accepted any deposits from the public during the year within the meaningof sections 73 to 76 of the Act or any other relevant provisions of the Act and the rulesframed there under and therefore provisions of paragraph 3(v) of the Order is notapplicable to the Company. v. The Central Government has not prescribed the maintenance ofcost records under section 148(1) of the Act for any of the services rendered by theCompany. vi. a. According to the information and explanations given to us the Company hasgenerally been regular in depositing undisputed statutory dues including provident fundemployees' state insurance income-tax service tax goods and service tax cess andother material statutory dues as applicable to the Company. According to the informationand explanations given to us no undisputed amounts payable in respect of provident fundemployees' state insurance income-tax service tax cess goods and service tax andother material statutory dues as applicable were in arrears as at March 31 2019 for aperiod of more than six months from the date they became payable. b. According to theinformation and explanations given to us there are no dues of income tax sales taxservice tax duty of customs duty of excise goods and service tax or value added tax asapplicable which have not been deposited as at March 31 2019 with appropriate authoritieson account of any dispute. vii. To the best of our knowledge and according to theinformation and explanations given to us the Company did not have any loans or borrowingsfrom banks financial institutions or government and has not issued any debentures.Accordingly Paragraph 3(viii) of the order is not applicable. viii. The Company did notraise any money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Accordingly paragraph 3 (ix) of the Order isnot applicable. ix. To the best of our knowledge and according to the information andexplanations given to us no material fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year. x. According to theinformation and explanations give to us and based on our examination of the records of theCompany the Company has paid/provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct. xi. The Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order isnot applicable. xii. According to the information and explanations given to us and basedon our examination of the records of the Company transactions with the related partiesare in compliance with sections 177 and 188 of the Act where applicable and details ofsuch transactions have been disclosed in the financial statements as required by theapplicable accounting standards.
xiii. According to the information and explanations give to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year and hence reporting under paragraph 3(xiv) of the Order is notapplicable. xiv. According to the information and explanations given to us and based onour examination 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. xv. According to the information and explanation given to usand based on examination of the records of the Company the Company is not required to beregistered under section 45-IA of the Reserve Bank of India Act 1934.
Annexure - B to the Independent Auditors' Report
(Referred to in paragraph 2(f) under Report on Other Legal andRegulatory Requirements' section of our report of even date for the year ended March31 2019)
Report on the Internal Financial Controls over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financialreporting of The Investment Trust of India Limited ("the Company") as of March31 2019 in conjunction with our audit of the 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 andmaintaining internal financial controls based on the internal control over 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 (theGuidance Note'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies 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 Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note and the Standards on Auditing deemed to beprescribed under section 143(10) of the Act 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors' judgment including the assessment of therisks of material 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 controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting isa process 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 controlover financial reporting includes those policies and procedures that: (1) Pertain to themaintenance of records that in reasonable detail accurately and fairly reflect 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 FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper Managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations 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 March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note.