STANDALONE FINANCIAL STATEMENTS-TRANSCORP INTERNATIONAL LIMITED
THE MEMBERS OF
TRANSCORP INTERNATIONAL LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the Standalone Financial Statements of Transcorp international Limited("the Company") which comprise the Standalone Balance Sheet as at 31 March2022 and the Standalone Statement of Profit and Loss (including Other Comprehensiveincome) the Standalone Statement of Cash Flows and the Standalone Statement of Changes inEquity for the year then ended and notes to the standalone financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in Indiaincluding the ind AS of the state of affairs (financial position) of the Company as at 31March 2022 and its profit (financial performance including other comprehensive income)its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the institute of Chartered Accountants of india together with theethical requirements that are relevant to our audit of the Standalone Financial Statementsunder the provisions of the Act and the Rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Emphasis of Matter
We invite attention to Note No.52 to the Standalone Financial statements regardingreceipt of Show Cause Notice from Directorate of Enforcement related to the MTSS businessof the company which has already been closed by the company in year 2018 by surrenderingits MTSS License. Looking to many infirmities observed in the SCN company is takingnecessary legal recourse to get the notice dropped.
Our opinion is not modified in respect of the above 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 of the current period.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
|S . Description of Key Audit Matter ||How our audit addresses the Key Audit Matter |
|1. Recognition of trading income: - ||Our audit procedures included among others evaluating the design and performing tests over the operating effectiveness of relevant key revenue controls including reconciliation controls between the transaction recording system general ledger and bank statements. |
|Fee and trading income consists of the margin generated from foreign currency spreads on the purchase and sale of foreign currency. Trading income is presented inclusive of realized and unrealized income earned from sale of foreign currency contracts to customers. || |
| ||Our audit approach was a combination of test of controls and substantive procedures which include the following:- |
|Why it is identified as Key Audit Matter || Performed data analytic techniques to derive sample of Sale and Purchase of FOREX transactions. |
|This has been considered as a key audit matter because it represents the most significant element of revenue in the Standalone Statement of Profit & Loss. || Checked the sample transactions derived through above process. |
| || Examined supporting documents for a sample ofmanual journal related to sale and purchase of currency. |
| || Performed tests over the operating effectiveness of key reconciliation controls between the transaction recording system and general ledger related to cash. |
|2 Valuation of deferred tax assets ||Our audit procedures included among others procedures on the completeness and accuracy of the deferred tax assets recognized. We assessed the applicable provisions of the Income Tax Act and the Rules framed thereunder and developments in particular those related to changes in the statutory income tax rate since this is a key assumption underlying the valuation of the deferred tax assets. In addition we also focused on the adequacy of the Company's disclosures on deferred tax assets and assumptions used/ judgment taken by the management. |
|The Company's assessment of the valuation of deferred tax assets resulting from temporary differences is significant to our audit as the calculations are complex and depend on sensitive and judgmental assumptions. These include amongst others long-term future profitability compliance of Income tax Act 1961 and the Income Tax Rules 1962 framed there under and new developments. Hence it is considered as a Key Audit Matter. The Company's disclosures concerning deferred taxes are included in Note No. 20 to the standalone financial statements. || |
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Director Report and CorporateGovernance Report but does not include the Standalone Financial Statements and ourauditor's report thereon.
Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone Financial Statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.
When we read the other information if we conclude that there is a materialmisstatement of this other information; we are required to report that fact.
Management's Responsibility for the Standalone 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 Financial Statementsthat give a true and fair view of the state of affairs (financial position) profit orloss (financial performance including other comprehensive income) cash flows and changesin equity of the Company in accordance with the accounting principles generally acceptedin India including the Indian Accounting Standards (Ind AS) prescribed under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.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 is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial 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. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.
A further description of our responsibilities for the audit of the Standalone FinancialStatements is included in Appendix -1 of this auditor's report.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2020 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act and on the basisof such checks of the books and records of the Company as we considered appropriate andaccording to the information and explanations given to us we give in "Annexure1" a statement on the matters specified in paragraphs 3 and 4 of the said Order.
2. As required by Section 143(3) of the Act we report that:
i. 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.
ii. 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.
iii. The Standalone Balance Sheet the Standalone Statement of Profit and Loss(including Other Comprehensive Income) the Standalone Statement of Cash Flow and theStandalone Statement of Changes in Equity dealt with by this Report are in agreement withthe books of account.
iv. In our opinion the aforesaid Standalone Financial Statements comply with theIndian Accounting Standards prescribed under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.
v. On the basis of the written representations received from the directors as on 31stMarch 2022 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2022 from being appointed as a director in terms of Section164 (2) of the Act.
vi. With respect to the adequacy of the Internal Financial Controls with reference toStandalone Financial Statements of the Company and the operating effectiveness of suchcontrols refer to our separate report in "Annexure 2".
vii. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
viii. 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 Financial Statements. Refer Note No. 41 to the StandaloneFinancial Statements;
ii) The Company has made provision as required under the applicable law or Indianaccounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts;
iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv) (a) The Management has represented that to the best of its knowledge and beliefno funds (which are material either individually or in the aggregate) have been advancedor loaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other person or entity including foreignentity ("Intermediaries") with the understanding whether recorded in writingor otherwise that the Intermediary shall whether directly or indirectly lend or investin other persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;
(b) The Management has represented that to the best of its knowledge and belief nofunds (which are material either individually or in the aggregate) have been received bythe Company from any person or entity including foreign entity ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11 (e) as provided under (a)and (b) above contain any material misstatement.
v) (a) No final dividend proposed by the company in the previous year.
(b) No interim dividend declared and paid by the Company during the year and until thedate of this report.
(c) As stated in Note 17(H) to the standalone financial statements the Board ofDirectors of the Company have proposed final dividend for the year which is subject to theapproval of the members at the ensuing Annual General Meeting. The amount of dividendproposed is in accordance with section 123 of the Act to the extent it applies todeclaration of dividend.
(Referred to in Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements' paragraph of the Independent Auditors' Report)
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the StandaloneFinancial 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate Internal Financial Controls with reference to Standalone Financial Statements inplace and the operating effectiveness 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 Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
ANNEXURE 1 TO THE INDEPENDENT AUDITORS' REPORT
Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' section of our report of even date to the members of Transcorp InternationalLimited on the Standalone Financial Statements for the year ended 31 March 2022
i) In respect of the Company's Property Plant and Equipment and Intangible Assets:
(a) (A) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant & Equipment and relevant detailsof right-of-use assets.
(B) The Company has maintained proper records showing full particulars of intangibleassets.
(b) The Property Plant & Equipment have been physically verified whereverpracticable in a phased manner by the management/ internal auditors and the reconciliationof the quantities with the book records has been done on continuous basis. No materialdiscrepancies were noticed on such verifications.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except as stated below:
|Description of Property ||Gross Carrying Value (in Rs. Lacs) ||Held in name of ||Whether held in name of promoter director or their relative or employee ||Property held since which date ||Reason for not being held in name of company |
|Premises at SFS 20 Nehru Place Tonk Road Jaipur ||2.04 ||Rajasthan Industrial Trading Company ||No ||22.06.2002 ||Holder of this property got merged with the company in the year 2002 |
|Village Purna Taluka Bhiwandi District Thane Kalibai Ganpat Mhatre and other village Kapper Taluka Dist Thane ||643.43 (Building- 415.51 Land- 227.92) ||Transport Corporation of India ||No ||31.03.2022 ||Since company has received these property in arbitration award vide order dated 28.02.2022 for which possession is taken by the company on 31.03.2022 however mutation of same is pending with respective authority. |
|Building at 605608 Sixth Floor A Wing in Sahar Plaza Complex Bonanza J. B. Nagar Sir M.V. Road Marol Andheri-E Mumbai - 400059 ||211.50 ||Wheels International Limited ||No ||31.03.2022 || |
|Land at H-1 A Transport Nagar ||200.71 ||Transport ||No ||31.03.2022 ||Since company has |
|Jaipur || ||Corporation of India || || ||received these property in arbitration award vide order dated 26.02.2022 for which possession is taken by the company on 31.03.2022 however mutation of same is pending with respective authority. |
|Land at Khasra No.48 GT Road Village Chikambarpur Dist. Meerut Uttar Pradesh ||1070.00 ||Transport Corporation of India ||No ||31.03.2022 || |
(d) The company has not revalued its Property Plant and Equipment (including Right ofUse assets) or intangible assets or both during the year.
(e) Based on the information and explanation given to us and as represented by theperson those charge with governance no proceedings have been initiated or are pendingagainst the company for holding any benami property under the Benami Transactions(Prohibition) Act 1988 (45 of 1988) and rules made thereunder.
ii) (a) The inventory being foreign currency and paid documents has been physicallyverified at reasonable intervals during the year by the Management/ Internal Auditors. Inour opinion the frequency of such verification is reasonable and the coverage andprocedure of such verification by the management is appropriate. No discrepancies of 10%or more in the aggregate for each class of inventory were noticed.
(b) The company has been sanctioned working capital limits in excess of five crorerupees in aggregate from banks or financial institutions on the basis of security ofcurrent assets. Based on the information and explanation given to us and as represented bythe person those charge with governance we have observed that figures reported underquarterly returns or statements filed by the company with such banks or financialinstitutions are not in agreement with the various heads of ledger as per books ofaccounts of the company as reported in Note No.54 to the financial statements.
iii) During the year the company has made investments in provided guarantee orsecurity or granted any loans or advances in the nature of loans secured or unsecured tocompanies firms Limited Liability Partnerships or any other parties.
a) During the year the company has provided loans or provided advances in the natureof loans or stood guarantee or provided security to any other entity if so indicate
(Rs. in Lakhs)
|Particulars ||Guarantees ||Security ||Loans ||Advance in nature of Loans |
|Aggregate amount granted/ provided during the year ||1008.08 || ||2242.95 || |
|- subsidiaries || || || || |
|- joint ventures || || || || |
|- associates || || || || |
|- Others || || || || |
|Balance outstanding as at || || || || |
|balance sheet date in respect of above cases || || || || |
|- subsidiaries ||1008.08 || ||236.69 || |
|- joint ventures || || || || |
|- associates || || ||391.72 || |
|- Others || || ||146.34 || |
b) During the period the board of the company has approved for restructuring the loangiven to the associate company. As per the terms of restructuring the company has waived100% interest outstanding amounting to Rs. 124.99 lacs considering the financial positionand inability to repay the entire amount of outstanding of the associate enterprise.Except such case other investments made guarantees provided security given and theterms and conditions of the grant of all loans and advances in the nature of loans andguarantees provided are not prejudicial to the company's interest.
c) The company in respect of various loans and advances in the nature of loans hasnot stipulated the schedule of repayment of principal and payment of interest. Accordinglyclause 3(iii)(c) of the order is not applicable.
d) In following cases the amounts to be recovered are overdue for more than 90 days:
|Name of company ||Principal Overdue ||Interest overdue ||Total Overdue ||Remarks |
|Mani Square Limited ||100.00 ||46.34 ||146.34 ||filed an application for initiation of Corporate Insolvency Resolution Process (CIRP) to Insolvency and Bankruptcy Board of India on 20- Jan-2022 |
|TCI Bhoruka Projects Limited ||391.72 ||124.99 (waived off and charged to Profit and loss) ||391.72 ||As approved in board meeting held on 08-Feb-22 100% interest amount has been waived. |
The company has taken reasonable steps for recovery of the principal and interest frommoney squares limited. However in case of TCI Bhoruka Projects Limited the company haswaived of the recovery of interest to recover the principal outstanding.
e) Aggregate amount of Rs. 51671125 (Principal Rs. 39172032 Interest Rs.12499093) of loan or advance in the nature of loan granted to TCI Bhoruka ProjectsLimited which has fallen due during the year has been renewed or extended to settle theoverdues of existing loans given to the same party which is 23.04% of the aggregate to thetotal loans or advances in the nature of loans granted during the year.
f) The company has granted loans or advances in the nature of loans which are repayableon demand or without specifying any terms or period of repayment amounting to Rs. 774.75lakhs at the end of the year. Details of aggregate amount percentage thereof to the totalloans granted aggregate amount of loans granted to Promoters related parties as definedin clause (76) of section 2 of the Companies Act 2013 are given here under:
(Rs. In Lakhs)
|S. No. Particulars ||All Parties ||Promoters ||Related Parties |
|1 Aggregate amount of loans/ advances in nature of loans || || || |
|- Repayable on demand as there is no specific agreement (A) ||774.75 || |
|- Agreement does not specify any terms or period of repayment (B) || || || |
|2 Total (A+B) ||774.75 ||- ||628.41 |
|3 Percentage of loans/ advances in nature of loans to the total loans ||100.00% ||- ||81.11% |
iv) The Company has granted loans made investments given guarantees and security to1 party covered in register maintained under Section 189 of the Companies Act 2013 whichare in compliance to provisions of sections 185 and 186 of the Companies Act.
v) In our opinion and according to the information and explanations given to us thecompany has generally complied with the directives issued by the Reserve Bank of India andthe provisions of section 73 to 76 read with other relevant provisions of the CompaniesAct 2013 and rules framed there under; where ever applicable; in respect of depositsaccepted from the public. As per information and explanations given to us no order hasbeen passed by Company Law Board or National Company Law Tribunal or Reserve Bank ofIndia or any court or any other tribunal in this respect and hence question of itscompliance does not arise.
vi) Central Government has not prescribed the maintenance of cost records under section148(1) of the Act for any of the services rendered by the Company hence the clause 3(vi)is not applicable.
vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Goods and Services Taxprovident fund employees' state insurance income- tax sales-tax service tax duty ofcustoms duty of excise value added tax cess and any other statutory dues have beenregularly deposited during the year by the Company with the appropriate authorities.According to the information and explanations given to us no undisputed amounts payablein respect of Provident Fund Employees' State Insurance Income Tax Service Tax andother material statutory dues were in arrears as at 31 March 2022 for a period of morethan six months from the date they became payable.
(b) According to the information and explanations given to us and the records of theCompany examined by us there were no statutory dues referred in para 3(vii)(a) abovewhich have not been deposited on account of any dispute hence reporting under the clause3(vii)(b) is not applicable.
viii) There were no transactions relating to previously unrecorded income that havebeen surrendered or disclosed as income during the year in the tax assessments under theIncome Tax Act 1961 hence reporting under the clause 3(viii) of the CARO is notapplicable.
ix) (a) According to the information and explanations given to us by the managementthe company has not defaulted in repayment of loans or other borrowings or in the paymentof interest thereon to any lender.
(b) According to the information and explanations given to us and on the basis of ouraudit procedures we report that the company has not been declared willful defaulter byany bank or financial institution or government or any government authority.
(c) In our opinion and according to the information and explanations given to us thecompany has not taken term loans during the year and hence reporting under clause3(ix)(c) of the order is not applicable.
(d) According to the information and explanations given to us and the proceduresperformed by us and on an overall examination of the financial statements of the companywe report that no funds raised on short-term basis have been used for long-term purposesby the company.
(e) According to the information and explanations given to us and on an overallexamination of the financial statements of the company we report that the company has nottaken any funds from any entity or person on account of or to meet the obligations of itssubsidiaries associates or joint ventures.
(f) According to the information and explanations given to us and procedures performedby us we report that the company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries joint ventures or associate companies.
x) (a) The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year and hence reporting under clause3(x)(a) of the Order is not applicable.
(b) During the year the Company has not made any preferential allotment or privateplacement of shares or convertible debentures (fully or partly or optionally) and hencereporting under clause 3(x)(b) of the Order is not applicable.
xi) (a) No fraud by the Company and no material fraud on the Company has been noticedor reported during the year.
(b) No report under sub-section (12) of section 143 of the Companies Act has been filedin Form ADT- 4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules 2014with the Central Government during the year and upto the date of this report.
(c) As represented to us by the management there are no whistle blower complaintsreceived by the company during the year.
xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Standalone Financial Statements as required by theapplicable accounting standards.
xiv) (a) In our opinion the Company has an adequate internal audit system commensuratewith the size and the nature of its business.
(b) We have considered the internal audit reports for the year under audit issued tothe Company during the year and till date in determining the nature timing and extent ofour audit procedures.
xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
xvi) (a) Company is not required to get itself registered under section 45-IA of theReserve Bank of India Act 1934 hence reporting under clause 3(xvi)(a) (b) and (c) of theorder is not applicable.
(b) In our opinion there is no core investment company within the Group (as defined inthe Core Investment Companies (Reserve Bank) Directions 2016) and accordingly reportingunder clause 3(xvi)(d) of the Order is not applicable.
xvii) Company has not incurred cash losses in the financial year 2021-22. However thecompany has incurred cash losses of Rs. 266.66 lakhs in the immediately precedingfinancial year.
xviii) There has been no resignation of the statutory auditors of the Company duringthe year.
xix) On the basis of the financial ratios ageing and expected dates of realization offinancial assets and payment of financial liabilities other information accompanying thefinancial statements and our knowledge of the Board of Directors and Management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report indicating that Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.
xx) Considering the losses in previous years the company is not required to spentunder CSR activities during the year hence the clause 3(xx)(a) & (b) is notapplicable.
ANNEXURE 2 TO THE INDEPENDENT AUDITORS' REPORT
Referred to in paragraph 2 (f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date to the members of Transcorp InternationalLimited on the Standalone Financial Statements for the year ended 31 March 2022
Report on the Internal Financial Controls with reference to Standalone FinancialStatements under Clause (i) of Sub-section 3 of Section 143 of the Act
We have audited the internal financial controls with reference to Standalone FinancialStatements of Transcorp International Limited ("the Company") as of 31st March2022 in conjunction with our audit of the Standalone Financial Statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls with reference to Standalone Financial Statements based on the internalcontrols over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by The Institute of CharteredAccountants 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 of fraudsand 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's internal financialcontrols with reference to Standalone Financial Statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls over Financial Reporting (the "Guidance Note") and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of the Act tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to Standalone Financial Statements was established and maintained and ifsuch controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control system with reference to Standalone Financial Statementsand their operating effectiveness. Our audit of internal financial control with referenceto Standalone Financial Statements included obtaining an understanding of internalfinancial control with reference to Standalone Financial Statements assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone 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 systemwith reference to Standalone Financial Statements.
Meaning of Internal Financial Controls with reference to Standalone FinancialStatements
A Company's internal financial control with reference to Standalone FinancialStatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the
preparation of Standalone Financial Statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control withreference to Standalone Financial Statements 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 Standalone Financial Statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorizations of management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial effect on the Standalone Financial Statements.
Inherent Limitations of Internal Financial Controls with reference to StandaloneFinancial Statements
Because of the inherent limitations of internal financial controls with reference toStandalone Financial Statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to Standalone Financial Statements to future periods are subjectto the risk that the internal financial controls with reference to Standalone FinancialStatements may become inadequate because of changes in conditions or that the degree ofcompliance 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 with reference to Standalone Financial Statements and such internal financialcontrols with respect to Standalone Financial Statements were operating effectively as at31 March 2022 based on the internal controls over financial reporting criteriaestablished by the Company considering the components of internal controls stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe ICAI.
|For Kalani & Company |
|Chartered Accountants |
|Firm's Registration No: 000722C |
|[Bhupender Mantri] Partner |
|Membership No: 108170 |
|Place: Jaipur |
|Dated: 07th May 2022 |
|UDIN: 22108170AIPILT2326 |