To The Members of TPI INDIA LIMITED Report on the Financial Statements:
We have audited the accompanying Ind AS financial statements of TPI INDIA LIMITED("the Company") which comprise the Balance Sheet as at March 31 2018 and theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and a summary ofthe significant accounting policies and other explanatory information.
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 Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (IndAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing 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 Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.
In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder and the Orderissued under section 143(11) of the Act.
We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.
I) Basis for Qualified Opinion:
(1) The Trade Receivables Trade Payables Current and Non- current Liabilities Loansand Advances given and taken are subject to confirmation reconciliation adjustments andprovision if any which may arise out of confirmation and reconciliation.
(2) The Ind AS 109 in respect of Fair Market Value/ Amortised Value of Investment andFinancial Assets/liabilities and expected loss in respect of Sundry Debtors and loans arenot followed.
(3) The Gratuity Liabilities is provided on the basis of estimated liability as perManagement and not according to actuarial Liability.
(4) The premium of Rs. 125 Lacs (Rs. 100 Lacs) on redemption of 9% CumulativePreference Shares is not provided in the annexed Accounts.
(5) Interest on deferred Sales Tax Liability of Rs. 17.35 Lacs (Rs. 17.35 Lacs) for theyear 17-18 and Rs. 155.36 Lacs (Re.138.01) Lacs up to 31 /03/18 have not been provided inthe annexed accounts.
(6) Interest of Rs. 275 (275) Lacs for the year 17-18 and Rs. 550 Lacs (Rs. 275) lacsup to 31 /03/2018 on loans from SICOM Investment and Finance Ltd have not been provided inthe annexed accounts.
The amount of (1) (2) and (3) above cannot be ascertained precisely. The effect of the(4) (5) and (6) above will be to increase the loss for the year by Rs. 417.35 Lacs (Rs.392.35 Lacs) and reduce the Reserve/increased the Debit Balance of P & L by Rs. 417.35lacs (Rs. 392..35 Lacs). Increase in loss and the reduction in Reserve/increased the DebitBalance of P & L up to 31-03-2018 will be Rs. 830.36 lacs (Rs. 513.01 Lacs).
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph and read together with other notes thereon the aforesaid Ind ASfinancial statements give the information required by the Act in the manner so requiredand give a true and fair view in conformity with the accounting principles generallyaccepted in India including Ind AS specified under section 133 of the Act.
a) in the case of the Balance Sheet of the state of affairs of the Company as at March312018;
b) in the case of the Statement of Profit and Loss of the Loss total comprehensiveincome for the year ended on that date; and
c) the changes in equity for the year ended on that date.
d) in the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.
Report on Other Legal and Regulatory Requirements:
1. As required by Section 143(3) of the Act based on our audit we report that:
a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
b) in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from ourexamination of those books.
c) the Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account.
d) in our opinion the aforesaid Ind AS financial statements subject to qualifiedopinion above comply with the Indian Accounting Standards prescribed under section 133 ofthe Act.
e) on the basis of the written representations received from the directors of theCompany as on March 31 2018 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2018 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 over financialreporting of the Company as on 31st March 2018 in conjunction with our auditof the financial statement of the Company for the year ended on that date and theoperating effectiveness of such controls refer to our separate Report in "AnnexureA". Our report expresses an unmodified opinion on the adequacy and operatingeffectivenessoftheCompany's internal financial controlsoverfinancial reporting.
g) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements.
ii. The Company has made provision as required under the applicable law or Ind AS formaterial foreseeable losses if any on long-term contracts including derivativecontracts.
iii. There were Rs. 3.17 lacs which were not transferred to the Investor Education andProtection Fund by the Company.
2. 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(hereinafterreferred to as the "Order") and on the basis of such checks ofthe books andrecords ofthe Company as we considered appropriate and according to the information andexplanations given to us we give in "Annexure B" a statement on the mattersspecified in paragraphs 3 and 4 ofthe Order.
Referred to in paragraph 1 (f) under'Report on Other Legal and Regulatory Requirements'section of our report to the Members of TPI India Limited of even date)
Report on the Internal Financial Controls Over Financial Reporting 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 TPIINDIALIMITED ("the Company") as of March 312018 in conjunction with our auditof the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls:
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system 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 judgement 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition ofthecompany's assets that could have a material effect on the Ind AS financial statements.
Limitations of Internal Financial Controls Over Financial Reporting:
Because ofthe inherent limitations of internal financial controls over financialreporting includingthe 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 312018 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our Independent Auditor's Report of even date to the Members of TPI INDIALimited on the Ind AS Financial Statements as of and for the year ended 31 st March2018.)
Based on the audit procedures performed for the purpose of reporting a true and fairview on the Ind AS financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
i. In respect ofthe Company's fixed assets:
(a) In our opinion and according to the information and explanation given to us andbased on our examination of books the Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) All the Fixed Assets have not been physically verified by the management during theyear but the Company has a regular program of verification to coverall the items of fixedassets in a phased manner which in our opinion is reasonable having regard to the sizeofthe Company and the nature of its assets. Pursuant to the program certain fixed assetswere physically verified by the management during the year. According to the informationand explanations given to us no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name ofthe Company as at the balance sheet date.
ii. (a) The Inventories have been physically verified by the management at the endofthe year. In our opinion the frequency of verification is reasonable.
(b) In our opinion the discrepancies noticed on verification between the physicalstocks and the book records are not material and have been properly dealt in the books ofaccounts.
iii. In our opinion and according to the information and explanation given to us andbased on our examination of books the Company has not granted any Loan Secured orUnsecured to companies firms Limited Liability Partnership or other the parties coveredin the register maintained under section 189 of the Companies Act 2013. Accordingly theprovisions of clause (iii) (a) (b) and (c) of the Companies (Auditor's Report) Order2016 are not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us andbased on our examination of books the Company has complied with the provisions ofSections 185 and 186 ofthe Act in respect of grant of loans making investments andproviding guarantees and securities as applicable.
v. The Company has accepted certain deposits from public for which the directivesissued by the Reserve Bank of India and the provision of Section 73 to 76 or any otherrelevant provisions ofthe Companies Act 2013 and the Rules framed there under have notbeen complied with. For the above referred accepted deposits company has not compliedwith the provisions like advertisement in newspaper filing of annual return maintainingthe liquid assets rate of interest and the limit upto which the deposits can be acceptedfrom the public.
We were informed that no order has been passed by Company Law Board or National CompanyLaw
Tribunal or Reserve Bank of India or any Court or any other Tribunal for the above saiddefaults.
vi. The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Companies Act 2013 for the business activities carried out bythe Company. Thus reporting under clause 3(vi) ofthe order is not applicable to theCompany.
vii. According to the information and explanations given to us and the record oftheCompany examined by us in respect of statutory dues inouropinion:
(a) The Company has generally been regular in deposits undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Service TaxGoods and Service Tax Value Added Tax Customs Duty Excise Duty Cess and otherstatutory dues applicable to it with the appropriate authoritiesv
(b) According to the information and explanations given to us the arrears ofoutstanding statutory dues as at the last day ofthe financial year concerned for a periodof more than six months from the date becoming payable are mentioned below:
(b) i) The undisputed statutory dues are as follows:-
|Sr. No. ||Nature of Dues ||Financial Year ||Amount ||Remarks |
|1. ||Deferred Sales Tax ||1994-95 to 03-04 ||24797881/- ||Relief sought under BIFR Scheme |
|2. ||Additional Demand on Assessment of Sales Tax for above years ||1994-95 to 03-04 ||16184583/- ||Relief seeking for in Revised MDRS for including this Additional Liabilities for setting off against un- avalied Sales Tax Deferral limit of Rs. 524.60 Lac |
(b) ii) According to information and explanation given the disputed statutory duesaggregating to Rs. 902.43 lacs in respect of income tax or sales tax or service tax orgoods and service tax duty of customs or duty of excise or value added tax and Cess thathave not been provided and deposited on account of disputed matter pending beforeappropriate authorities are as under:
|Nature of the Status ||Nature of Dues ||Amount of Dues ||Period to which the Amount relates ||Forum at which dispute is pending |
|IT Act ||Penalty ||66.80 Lacs ||FY 06-07 ||CIT(A) |
|Custom- DC FT ||Penalty ||807.94 Lacs ||F Y 94-95 to 99-00 ||DGFT Delhi. |
|Custom Act ||Duty ||27.69 lacs ||F Y 08-09 ||CESTAT. |
viii) Based on our audit procedure and according to the information and explanationgiven to us we state that the company has not defaulted in repayment of loans orborrowings and interest to financial institution bank government or debenture holdersexcept the following:
|Name ||Nature ||Period ||Amount ||Remarks |
|SIFL ||Interest ||Oct. 15 to March 2016 ||14220028/- ||Written Back in F.Y. 16-17; |
|SIFL ||Interest ||Apri 116 to March 2017 ||27495797/- ||Note Provided: |
|SIFL ||Interest ||Apri 117 to March 2018 ||27495797/- ||Note Provided; |
|SIFL ||9%Pref. Shares ||- ||50000000/- ||Matured in Oct'17 |
ix. According to the information and explanation given to us and based on ourexamination of books the Company has not raised moneys by way of initial public offer orfurther public offer (including debt instruments); according to the information andexplanation given to us and based on our examination of books the Company has not availednew term loan during the year and hence reporting under clause 3 (ix) ofthe Order is notapplicable to the Company and commented upon.
x. During the course of our examination ofthe books and records ofthe Company carriedout in accordance with the generally accepted auditing practices in India and according tothe information and explanations given to us in our opinion we have neither come acrossor noticed during the year any instances of material fraud by the Company or on theCompany by its officers or employees nor have we been informed of any such cases by themanagement.
xi. In our opinion and according to the information and explanations given to us theCompany has not paid/provided any managerial remuneration in accordance without therequisite approvals mandated by provisions of Section 197 read with Schedule V oftheCompanies Act and hence reporting under clause 3 (ix) ofthe Order is not applicable to theCompany. However guarantee commission of Rs. 300000/- is paid to Managing Director forpersonal guarantee given to bank & financial institutions.
xii. In our opinion and according to information and explanation given to us theCompany is not a Nidhi Company and hence reporting under clause 3 (xii) of the Order isnot applicable to the Company and commented upon.
xiii. In our opinion and according to the information and explanations given to us andon overall examination of Balance Sheet the Company is in compliance with Section 177 and188 ofthe Companies Act 2013 where applicable for all transactions with the relatedparties and the details of related party transactions have been disclosed in the financialstatements as required by the applicable Ind AS.
xiv. According to the information and explanations given to us and on an overallexamination ofthe Balance Sheet during the year the Company has not made anypreferential al lotment or private placement of shares or fully or partly paid convertibledebentures and hence reporting under clause 3 (xiv) ofthe Order is not applicable to theCompany and commented upon..
xv. In our opinion and according to the information and explanations given to us and onan overall examination ofthe books during the year the Company has not entered into anynon-cash transactions with its Directors or persons connected to its directors and henceprovisions of section 192 of the Companies Act 2013 are not appl icable to the Companyand commented upon.
xvi. According to the information and explanations given to us in our opinion theCompany is not required to be registered under section 45-IAofthe Reserve Bank of IndiaAct 1934. Accordingly the provisions of Cl. 3(xvi) are not applicable and commentedupon.
ForV. R. Renuka& Co.
Chartered Accountants (Firm's Registration No. 108826W)
(Membership No. 032262)
Mumbai May 30 2018