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Toyam Industries Ltd.

BSE: 538607 Sector: Others
NSE: N.A. ISIN Code: INE457P01020
BSE 00:00 | 12 Aug 10.86 -0.46
(-4.06%)
OPEN

11.01

HIGH

11.19

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NSE 05:30 | 01 Jan Toyam Industries Ltd
OPEN 11.01
PREVIOUS CLOSE 11.32
VOLUME 309246
52-Week high 19.78
52-Week low 2.25
P/E 362.00
Mkt Cap.(Rs cr) 433
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 11.01
CLOSE 11.32
VOLUME 309246
52-Week high 19.78
52-Week low 2.25
P/E 362.00
Mkt Cap.(Rs cr) 433
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Toyam Industries Ltd. (TOYAMINDUSTRIES) - Auditors Report

Company auditors report

To the Members of Toyam Industries Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of

Toyam Industries Limited ("the Company") which comprise theBalance Sheet as at March 31 2021 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year ended on that date and a summary of the significant accounting policies andother explanatory information (hereinafter referred to as "the standalone financialstatements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021the profit (including other comprehensive income) changes in equity and its cash flowsfor the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone 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 (ICAI) together with theindependence requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the standalonefinancial statements.

Emphasis of Matter

1. According to the information and explanation given to us theCompany is engaged in the financing as well as non-financing activities. During theprevious year ended March 31 2020 and during current year ended March 31 2021 financialassets of the Company exceeds 50 per cent of its total assets and income from financialassets exceeds 50 per cent of the total revenue of the Company and consequently theCompany is required to comply with Section 45-IA and other applicable provisions of theReserve Bank of India Act 1934 (the RBI Act). However information with respect toaforesaid compliances are not provided to us and hence we are unable to comment uponfinancial and legal implication thereof.

2. In accordance with the requirements of Indian Accounting Standard(Ind AS 109) ‘Financial Instruments' the Company has not provided forimpairment of its financial assets using the expected credit loss (‘ECL')approach which involves an estimation of the probability of loss on the financial assetsover their life considering reasonable and supportable information about past eventscurrent conditions and forecasts of future economic conditions which could impact thecredit quality of the Company's loans and advances. Hence we are unable to assess andquantify effect of aforesaid transactions on financial statement.

3. Remuneration paid/ payable to Mr. Mohamedali Rajabali Budhwani(Chairman & Managing Director) which was approved in the shareholders' meetingheld on September 30 2017 exceeds the limit approved in such meeting by Rs. 6 lakhs andis subject to board of director's approval. The Company has charged the excessremuneration paid / payable in the statement of Profit and Loss for the year ended March31 2021.

4. Balances of loans and advances are subject to confirmationsreconciliations and subsequent adjustments.

Our opinion is not qualified in respect of the above matters.

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 standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matter described below to bethe key audit matters to be communicated in our report.

i. Loans & Advances

Description of Key Audit Matter:

There is an inherent risk around the Loans given by the Companyincluding high degree of complexity and judgement involved for the Company in theestimating individual and collective credit impairment provisions and write-off againstthese loans given by the Company. The Company's impairment provision for receivablesfrom financing business is based on the expected credit loss approach laid down underIndian Accounting Standard (Ind AS 109) ‘Financial Instruments'. Under thisapproach the management has been required to exercise judgment in areas viz.

- Calculation of historical default rates

- Estimates and external factors to arrive at probability of futuredefaults and

- Significant assumption regarding probability of various scenarioscredit policy and discounting rates for different industries considering individualborrower profile.

In view of the high degree of estimation involved in the process ofcalculation impairment provision and considering its significance to the overall Ind ASfinancial statement whereby any error/ omission in estimation may give rise to a materialmisstatement of Ind AS financial statements it is considered as Key Audit Matter.

Auditor's response:

Our Audit Procedures included considering appropriateness of theCompany's accounting policies for impairment of financial assets and assessingcompliance with IND AS 109.

For loans which are assessed for impairment on a portfolio basis weperformed particularly the following procedures:

• Obtained an understanding of the systems process and controlsimplemented by the management for recording Loans and computing interest thereon.

• We understood the methodology and policy laid down for loansgiven by the company.

• We have reviewed the existence of recovery process in the eventof default.

• On selected specific/ statistical samples of Loans we testedthat the revenue recognized is in accordance with the revenue recognition accountingstandard.

• We have verified and reviewed the historical trends of repaymentof principal amount of loan and repayment of interest.

• We tested the reliability of the key data inputs and relatedmanagement controls

• We have assessed the assumptions made by the Company in makingprovision considering forward looking information and business estimates

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Company's Board Report but does not include the financial statementsand our auditor's report thereon. The Board Report is expected to be made availableto us after the date of this auditor's report.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

When we are made available the Board Report if based on the workperformed and based on the work done / audit report of other auditors we conclude thatthere is a material misstatement of this other information we are required to report thefact.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing theCompany's financial reporting process. Auditor's Responsibilities for the Auditof the Financial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness 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 thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in

(i) planning the scope of our audit work and in evaluating the resultsof our work; and

(ii) to evaluate the effect of any identified misstatements in thefinancial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies 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.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 in terms of Section 143(11) ofthe Act we give in "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 wereport that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) 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.

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2021 from being appointed as a director in termsof Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.

g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its director during theyear is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and according tothe explanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements.

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.

Annexure - A to the Independent Auditors' Report

(referred to in paragraph 1 under ‘Report on Other Legal andregulatory requirements' section of our report to the members of the Company of evendate)

i. a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Fixed Assets.

b) As informed to us the Company has a program for physicalverification of fixed assets by which all fixed assets are verified in a phased mannerover a period of three years. In our opinion the periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. Pursuantto the program most of the fixed assets were physically verified by the management duringthe year. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification.

c) In our opinion and according to the information and explanationsgiven to us and on the basis of examination of the records of the Company the title deedsof immovable properties are held in the name of the Company.

ii. Since the Company is in service industry it does not have anyinventories. Accordingly paragraph 3(iii) of the order is not applicable to the company.

iii. The Company has not granted loans secured or unsecured to bodiescorporate Firms Limited Liability Partnerships covered in the register maintained undersection 189 of the Companies Act 2013 (‘the Act') Accordingly paragraph 3(iii)of the order is not applicable to the company.

iv. In our opinion and according to the information and explanationgiven to us and the records examined by us the Company has complied with the provision ofsection 185 and 186 of the Act with respect to loan given making investments andproviding guarantees and securities as applicable.

v. The Company has not accepted any deposits from the public and hencethe directives issued by the Reserve Bank of India and the provisions of Section 73 to 76or any other relevant provisions of the Companies Act and the Rules framed are notapplicable.

vi. In our opinion and according to the information and explanationgiven to us and the records examined by us the maintenance of cost records under section148 of the Act is not applicable.

vii. a) According to the information and explanations given to us andon the basis of our examination of the records the Company is generally regular indepositing undisputed statutory dues including provident fund income-tax sales taxvalue added tax duty of customs employees' state insurance duty of excise servicetax Goods and service tax cess and other material statutory dues to the appropriateauthorities.

There were no undisputed amounts payable in respect of provident fundemployees' state insurance income-tax sales tax goods and service tax service taxcustoms duty excise duty value added tax cess and other material statutory dues inarrears as at year end for a period of more than six months from the date they becamepayable.

b) According to the information and explanations given to us by theCompany and on the basis of our examination of the books of account and the record thereare no dues of Income Tax Service Tax Goods and service tax and Duty of Customs IncomeTax Sales Tax Duty of excise and Value added tax outstanding on account of any dispute.

viii. Based on our audit procedures and as per the information andexplanations given by the management we are of the opinion that the Company has notdefaulted in repayment of loans. There are no outstanding loans or borrowings from anyBanks Financial Institutions Government and debenture holders.

ix. The Company has not raised money through initial public offer orfurther public offer (including debt instruments) during the year. The Company has nottaken any term loan from Banks during the year. Accordingly paragraph 3(ix) of the Orderis not applicable.

x. According to the information and explanations given to us nomaterial fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the course of our audit.

xi. According to the information and explanation given to us theCompany has paid/ provided for managerial remuneration in accordance with requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi Company. Accordingly paragraph 3(xii) of theOrder is not applicable.

xiii. According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the RelatedParties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the standalone Financial Statements asrequired by the applicable Indian Accounting Standards.

xiv. 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 shares or fully or partly convertibledebentures during the year.

xv. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with them. Hence the provisionsof section 192 of the Act are not applicable.

xvi. The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

Annexure - B to the Auditors' Report

(Referred to in paragraph 2 under 'Report on Other Legal and regulatoryrequirements' section of our report to the members of the Company of even date)

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the Internal Financial Controls over financialreporting of Toyam Industries Limited ("the Company") as of March 312021 in conjunction with our audit of the Ind AS Financial Statements of the Company forthe year 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(‘ICAI'). 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 Companies Act2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's InternalFinancial Controls over Financial Reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an Audit of Internal Financial Controls both applicable to an Auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 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 Auditor's Judgment including the assessment of therisks of material misstatement of the Ind AS Financial Statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's InternalFinancial Controls system over Financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's Internal Financial Control over Financial Reporting 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 overFinancial Reporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of Financial Statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention nor timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould 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.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For Manoj Vatsal & Co.
Chartered Accountants
Firm Registration Number: 010155C
Sd/-
Mith Jain
Partner
Membership No. 181081
Place: Mumbai
Date: June 28 2021
ICAI UDIN: 21181081AAAABR5906

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