The Members of
TINNA TRADE LIMITED
No. 6 Sultanpur Mandi Road
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of TINNA TRADELIMITED ("the Company") which comprise the Balance Sheet as at March 31 2019the Statement of Profit and Loss (including other comprehensive income) the Statement ofCash Flows and the Statement of Changes in Equity for the year then ended and notes tothe financial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as Ind AS Financial Statements).
In our opinion and to the best of our information and according to the explanationgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2019its profit including other comprehensive income changes in equity and its cash flows forthe year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the standalone Ind AS Financial Statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion standalone Ind AS financial statements.
Emphasis of Matter
We draw attention to Note No. 29 (1) of the accompanying Standalone Ind AS FinancialStatements whereby the Company has recognized goodwill on demerger aggregating to Rs.642.20 lakhs in accordance with the composite scheme of arrangement approved by theNational Company Tribunal. The same has been amortized over a period five years inaccordance with the accounting method and accounting treatment prevailing as on theappointed date i.e. 31st March 2016. This treatment is different from prescribed underIndian Accounting Standard (IND AS) 103-Business Combinations in case of common controlbusiness combinations as is more fully described in the aforesaid note. Our opinion is notqualified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended March 31 2019. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context.
We have determined the matters described 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 standalone Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone Ind AS financialstatements.
|Key Audit Matters ||Auditor's Response |
|Adoption of Ind AS 115 - Revenue from Contracts with Customers. || |
|As described in Note 2.05 to the standalone financial statements the Company has adopted Ind AS 115 Revenue from Contracts with Customers ('Ind AS 115') the new standard on revenue recognition. The application and transition to this accounting standard is complex and is an audit focus area. ||Our audit procedures on adoption of Ind AS 115 Revenue from contracts with Customers ('Ind AS 115') the new standard on revenue recognition include the following - |
|The revenue standard establishes a comprehensive framework for determining whether how much and when revenue should be recognized. This involves certain key judgments relating to identification of distinct performance obligations determination of the transaction price allocation of the transaction price to identified performance obligations and the appropriateness of the revenue recognition methodology. Additionally the standard mandates robust disclosures in respect of revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. || Evaluated the design and implementation of the processes and internal controls relating to implementation of the new revenue recognition standard |
| || Evaluated the detailed analysis performed by management across revenue streams by selecting samples for the existing contracts with customers and verified the appropriateness of identification of distinct performance obligations determination of the transaction price allocation of the transaction price to identified performance obligations and the appropriateness of the revenue recognition methodology |
| || Evaluated the appropriateness of the adjustments recorded by management as at 1 April 2018 to transition to the new revenue standard using the cumulative effect method; and |
|The Company adopted the cumulative effect method to transition to Ind AS 115 consequently comparative financial information was not restated. || Evaluated the appropriateness of the accounting policy and disclosures provided under the new revenue standard and assessed the completeness and mathematical accuracy of the relevant disclosures. |
|Evaluation of tax positions The Company operates in India and is subject to periodic challenges by local tax authorities on a range of tax matters during the normal course of business including direct tax transfer pricing and indirect tax matters. These involve significant management judgment to determine the possible outcome of the tax litigations consequently having an impact on related accounting and disclosures in the financial statements. ||Our audit procedures include the following substantive procedures: |
| || Obtained an understanding of key tax litigations and potential tax exposures |
| || We along with our internal tax experts - |
| || read and analyzed select key correspondences and consultations carried out by management with external tax experts for key tax litigations and potential tax exposures; |
|Refer Note 28(A)(b) to the standalone Ind AS financial statements. || discussed with appropriate senior management and evaluated management's underlying key assumptions and grounds of appeal in estimating the tax provisions; and |
| || evaluated the status of the recent and current tax assessments / inquiries results of previous tax assessments and changes in the tax environment to assess management's estimate of the possible outcome of key tax litigations and potential tax exposures. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe Ind AS financial statements and our auditor's report thereon. The Annual Report isexpected to be made available to us after the date of this Auditor's Report. Our opinionon the Ind AS financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon.
In connection with our audit of the Ind AS financial statements our responsibility isto read the 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 Charges with Governance for the Standalone IndAS 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 standalone Ind AS financialstatements that give a true and fair view ofthe financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the company ofthe Company in accordance with accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Actread with Companies (Indian Accounting Standards) Rules 2015as amended. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of 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 standalonne Ind AS financial statements management is responsible forthe 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 the 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 the company's financialreporting process.
Auditor's Responsibility for the Audit of 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 S Aswill 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 standalone Ind AS financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
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 standalone Ind AS 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 the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the standalone Ind AS financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the Ind AS financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the Ind AS financialstatements.
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 standalone Ind AS financialstatements for the financial year ended March31 2019 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure 'A' a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) ofthe Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
(c) The Balance Sheet and the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and the Statement of Changes in Equitydealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 and the Companies (Indian Accounting Standards) Rules2015 as amended.
(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) ofthe Act.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone Ind
AS financial statements and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B" to this report;
(g) In our opinion the managerial remuneration for the year ended March 31 2019 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements.
(ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.
(iii) There were no amount which were required to be transferred to the InvestorEducation and Protection F und by the Company.
ANNEXURE 'A' TO THE INDEPENDENT AUDITOR'S REPORT (Referred to in paragraph 2 under'Report on Other Legal and Regulatory Requirements' section of our report to the Membersof Tinna Trade Limited of even date)
1. In respect ofthe 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 phased periodical programme of physical verification of all fixedassets which in our opinion is reasonable having regard to the size of the Company andthe nature of its assets. No material discrepancies were noticed on such verification.
(c) The Company has no immovable property as per the book records; therefore clause1(c) is not applicable to the Company
2. As per explanations given to us inventories have been physically verified by themanagement at reasonable intervals. In our opinion the frequency of the verification isreasonable. The discrepancies noticed on physical verification of inventories compared tobook records were not material and have been properly dealt with in the books of accounts.
3. According the information and explanations given to us the Company has grantedunsecured loans of Rs.255.00 lakhs to one party during the period covered in the registermaintained under section 189 of the Companies Act 2013. The said parties have anoutstanding balance ofRs. 95.31 lakhs as at the end ofthe period.
a. In our opinion the rate of interest and other terms and conditions on which theloans had been granted to the bodies corporate listed in the register maintained undersection 189 of the Act were not prima facie prejudicial to the interest ofthe Company.
b. In the case of the loans granted to the bodies corporate listed in the registermaintain under section 189 of the Act the borrowers have been regular in the paymentofthe principal and interest as stipulated.
c. There is no overdue amount for more than ninety days as at the end of the period.
4. In our opinion and as per information and explanation given to us the Company hascomplied with the provisions of section 185 and 186 ofthe Companies Act 2013 in respectof loans investments guarantees and securities granted.
5. According to information and explanations given to us the company has not acceptedany deposits as per the provisions of sections 73 to 76 or any other relevant provisionsofthe Companies Act and the rules framed there under.
6. In our opinion Cost records as specified by the Central Government under section148(1) of the Companies Act 2013 are not required to be maintained by the Company.
7. (a) The Company is generally regular in depositing undisputed statutory duesincluding Provident Fund Employees' State
Insurance Income-Tax Sales-Tax Service tax Duty of Customs Duty of Excise ValueAdded Tax Goods and Service Tax Cess and any other statutory dues with the appropriateauthorities. There are no arrears of outstanding statutory dues as at 31 st March 2019concerned for a period of more than six months from the date they become payable;
(b) According to the information and explanation given to us there are no disputedamounts payable in respect of income tax sales tax service tax duty of customs duty ofexcise and value added tax and goods and service tax except the following:
|Nature of Statute ||Nature of Dues ||Amount (in Rs.) ||Period to which amount relates ||Forum where dispute is pending |
|Income Tax Act 1961 ||Disallowances and additions to taxable income ||Rs.194.60 lakhs ||AY 2010-11 ||Income Tax Appellate Tribunal New Delhi |
8. Based on the information and explanations given by the management the Company hasnot defaulted in repayment of loans or borrowing to a Financial Institution BankGovernment or dues to debenture holders wherever applicable.
9. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company did not raise any money by way ofinitial public offer or further public offer and has not taken any term loan; thereforeclause (9) is not applicable to the Company.
10. Based upon the audit procedures performed for the purpose of reporting the true andfair view ofthe financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or no fraud/ materialfraud on the company by the officers and employees of the Company has been noticed orreported during the period.
11. In our opinion and according to the information and explanation given to us themanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.
12. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofthis clause 3(12) of the order are not applicable to the Company and hence not commentedupon.
13. As per the information given to us all transactions with the related parties arein compliance with sections 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the Financial Statements etc. as required by theapplicable accounting standards.
14. According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(14) are not applicable tothe company and not commented upon.
15. In our opinion and according to the information and explanation given to us theCompany has not entered into any noncash transactions with directors or persons connectedwith him.
16. The Company is not required to be registered under section 45-IA ofthe Reserve Bankof India Act 1934.
Annexure - B to the Auditors' Report Report on the Internal Financial Controls underClause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
To the Members of Tinna Trade Limited
We have audited the internal financial controls over financial reporting of TINNA TRADELIMITED ("the Company") as of 31st March 2019 in conjunction with our auditofthe Standalone financial statements ofthe Company for the period ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). 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.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that:
1. Pertain to the maintenance 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 financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations ofmanagement and directors ofthe 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.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st 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 on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For V. R. Bansal & Associates |
| ||Chartered Accountants |
| ||Firm Registration No. 016534N |
| ||Rajan Bansal |
| ||Partner |
| ||Membership No. 093591 |
|Dated: 30 th May 2019 || |
|Place: Delhi || |