TO THE MEMBERS OF TRANSPEK INDUSTRY LIMITED
Report on the audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of TRANSPEK INDUSTRYLIMITED ("the Company") which comprises the Balance Sheet as at 31st March2019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then ended andnotes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information. (herein after 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 Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended and other accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2019 the profit and total comprehensive incomechanges in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Companies Act 2013 and the Rules there under and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the standalone financial statements.
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. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Sr No Key Audit Matter ||How the matter was addressed in our audit: |
|1. Evaluation of uncertain tax positions and litigations ||In assessing the potential exposure of the on-going litigation we have performed the following procedures: |
|The company has on-going legal matters relating to direct tax Indirect tax and other matters which requires significant management judgement to || Obtaining from the management details of all completed / pending tax assessments and other litigations upto 31st March 2019; |
|determine the likely outcome. |
Refer Note 37 (A) to the Standalone Financial
| Understanding the status of pending tax demands and potential liability for the other pending litigations; |
|Statements. || Involved our internal tax teams and discussing with the company's legal advisors to confirm the management's underlying assumptions and judgement for determining the potential liability and provisions and the possible outcome of the litigation. |
|2. Transactions with Related Parties The company in its course of operations has ||Our audit approach for the transactions with related parties involved the following: |
|entered into transactions with related parties. The identification of these related parties transactions entered into with them and the determination of || Evaluation and testing of the design of internal controls and the secretarial process followed relating to identification of related parties and transactions with them; |
|arm's length price involves significant judgement and estimates. Refer Note 42 to the Standalone Financial Statements. || Confirming the regulatory requirements for the identification of related parties and transactions with these related parties the determination of arm's length pricing and the disclosures for the same in the standalone financial statements; |
| || Evaluating management judgments and assumptions regarding transactions with Related Parties at Arm's Length Price; |
| || Review of sample agreements/contracts to compare the terms of the related parties' transactions to those of identical or similar transactions with one or more unrelated parties and evaluate the business rationale for the same. |
|3. Recoverability and Recognition of Export Incentives under Merchandise Export from ||Our audit approach for verification of the export incentives under MEIS and its recognition involved the following: |
|India Scheme (MEIS) Under the Foreign Trade Policy (FTP) 2015-20 of || Evaluation and testing the internal controls and the process for identification and recognition of MEIS Income; |
|Government of India the company claims and receives export benefits under Merchandise Export from India Scheme (MEIS); || Understanding the management judgements key assumptions and estimations based on which recognition for MEIS income is done; |
|The Company recognizes these benefits when there is a reasonable assurance that the benefits will be received and company will comply with all the attached conditions in the period in which the right to receive the same is established; || |
|Refer Note 2.1(M) and 30 to the standalone financial statements. || |
Information other than the Standalone Financial Statement and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexure to Board's Report Corporate Governance andShareholder's information but does not include the Standalone financial statements andour auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we will 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 identified above and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
INDEPENDENT AUDITORS' REPORT
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 standalone financial statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the Ind AS and other accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement 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.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of 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.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls;
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management;
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone 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 financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the 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.
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 of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss including other comprehensiveincome statement of changes in equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
(g) 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; and
(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies
(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 37 (A) to the standalone financialstatements.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31st March2019.
For C N K & Associates LLP
Firm Registration No. 101961W/W-100036
Himanshu V. Kishnadwala Partner
Membership No.037391 Place: Vadodara Date: 27th May 2019
Annexure A to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31st March 2019.
On the basis of such checks as considered appropriate and in terms of the informationand explanations given to us we state as under:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the
property plant and equipments;
(b) As informed to us the company has a phased programme of physical verification ofits Property plant and equipments so as to cover all assets once in three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the company and thenature of its assets;
(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 the i mmovable propertiesare held in the name of the Company;
(ii) (a) As per the information and explanations given to us the inventories held bythe company have been physically verified
by the management. In our opinion having regard to the nature and location of stocksthe frequency of the physical verification is reasonable;
(b) In our opinion and according to the information and explanations given to us theCompany is maintaining proper records of inventories and the discrepancies noticed onphysical verification of the same were not material in relation to the operations of theCompany and the same have been properly dealt with in the books of accounts;
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to Companies Firms Limited Liability Partnershipor any other parties covered in the register maintained under section 189 of the CompaniesAct 2013. Hence clause 3(a) 3(b) and 3(c) are not applicable for the year;
(iv) In our opinion and according to the information and explanations given to usprovisions of Sections 185 and 186 of the Companies Act 2013 in respect of loansinvestments guarantees and securities have been complied with;
(v) In our opinion and as explained to us the Company has complied with the directivesissued by the Reserve Bank of India and the provisions of sections 73 to 76 or any otherrelevant provisions of the Companies Act 2013 and the rules framed there under for thedeposits accepted by the company;
(vi) We have broadly reviewed the cost records maintained by the Company as prescribedby the Central Government under sub section (1) of Section 148 of the Companies Act 2013and are of the opinion that prima facie the prescribed cost records have been made andmaintained by the company. We have however not made a detailed examination of the costrecords with a view to determine whether they are accurate or complete;
(vii) (a) According to the information and explanations given to us and the recordsexamined by us the Company is regular in
depositing with appropriate authorities undisputed statutory dues including providentfund employee's state insurance income-tax sales-tax Goods and Service tax (GST)service tax custom duty excise-duty value added tax cess and other statutory dues andthere are no undisputed statutory dues outstanding as at 31st March 2019 for a period ofmore than six months from the date they became payable;
(b) According to the information and explanations given to us and the records examinedby us there are no dues of income tax sales tax Goods and Service tax(GST) wealth-taxservice tax duty of customs duty of excise value added tax or cess that has not beendeposited on account of disputes except the following:
|Name of the Statute ||Nature of dues ||Amount ('In Lakhs) ||Period to which the amount relates ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income tax |
(including interest thereon)
|16.96 ||2013 -2014 ||Commissioner of Income Tax(Appeals)Vadodara |
|Central excise act1944 ||Excise duty (including penalty) ||51.13 ||2006 to 2012 ||CESTAT Ahmedabad |
|Service tax ||Service tax (including penalty) ||208.04 ||2009 to 2017 ||Commissioner (Appeals) Vadodara |
|Service tax ||Service tax (including penalty) ||395.74 ||2008 to 2017 ||CESTAT Ahmedabad |
|Central excise act1944 ||Custom duty (including penalty) ||25.64 ||2007 to 2014 ||CESTAT Mumbai |
Note:-Amounts paid under protest and not charged to profit and loss statement have notbeen included above. [Refer Note no. 37 (A) of Notes forming part of the financialstatements]
(viii) Based on our audit procedure and according to the information and explanationgiven by the management we are of the opinion that the company has not defaulted inrepayment of dues to financial institutions or banks Government or dues to debentureholders;
(ix) According to the information and explanations given to us no moneys were raisedby way of initial public offer or further public offer (including debt instruments) andthe term loans were applied for the purpose for which the loan were obtained during theyear;
(x) During the course of our examination of the books of account and records of thecompany carried out in accordance with the generally accepted auditing practices in Indiaand according to the information and explanations given to us we have neither come acrossany incidence of fraud on or by the company noticed or reported during the year nor wehave been informed of any such case by the management;
(xi) According to the information and explanation given to us and based on ourexamination of the records of the company the company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act;
(xii) In our opinion and according to the information and explanation given to us theprovisions related to Nidhi Company are not applicable;
(xiii) According to the information and explanations given to us all the transactionswith the related parties are in compliance with section 177 and 188 of the Companies Act2013 where applicable and the details have been disclosed in the Financial Statements asrequired by the applicable accounting standards;
(xiv) According to the information and explanations given to us the company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review;
(xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any noncash transactions with directors or persons connectedwith him and the provisions of section 192 of the Companies Act 2013 have been compliedwith;
(xvi) According to the information and explanation given to us the company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.
|For C N K & Associates LLP |
|Chartered Accountants |
|Firm Registration No. 101961W/W-100036 |
|Himanshu V. Kishnadwala |
|Membership No.037391 |
|Place: Vadodara |
|Date: 27th May 2019 |
Annexure B to the Independent Auditor's Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of TRANSPEKINDUSTRY LIMITED ("the Company") as of 31st March 2019 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI'). Theseresponsibilities include the design implementation and maintenance of internal financialcontrols with reference to financial statements of the company that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note
require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about internal financial controls with reference to financialstatements of the company were established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to financial statements of the company 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 financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that:
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with 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 financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an internal financialcontrols with reference to financial statements of the company and such internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
|For C N K & Associates LLP |
|Chartered Accountants |
|Firm Registration No. 101961W/W-100036 |
|Himanshu V. Kishnadwala |
|Membership No.037391 |
|Place: Vadodara |
|Date: 27th May 2019 |