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Twinstar Industries Ltd.

BSE: 531917 Sector: IT
NSE: N.A. ISIN Code: INE070B01013
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NSE 05:30 | 01 Jan Twinstar Industries Ltd
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VOLUME 29730
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OPEN 1.17
CLOSE 1.25
VOLUME 29730
52-Week high 3.05
52-Week low 1.17
P/E
Mkt Cap.(Rs cr) 3
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Twinstar Industries Ltd. (TWINSTARINDUS) - Auditors Report

Company auditors report

TO

THE MEMBERS OF TWINSTAR INDUSTRIES LIMITED

Report on the Audit of the Ind AS Financial Statements

Qualified Opinion

We have audited the accompanying Ind AS financial statements of Twinstar IndustriesLimited ("the Company") which comprise the balance sheet as at 31st March 2021and the statement of Profit and Loss (including other comprehensive income) statement ofchanges in equity and statement of cash flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the 'Basis forQualified Opinion' section of our report the aforesaid financial statements give theinformation required by the Companies Act 2013 "Act" in the manner so requiredand give a true and fair view in conformity with the accounting principles generallyaccepted in India of the state of affairs of the Company as at 31st March 2021 and itsloss for the year ended on that date.

Basis for Qualified Opinion

1) The company had received summons from GST department in 2018. During the year theGST department started further investigation. The director of the company contented thesaid action in High court and Supreme court that the company is not liable to pay GST asit is only paid when goods are actually supplied. It is further claimed that no goodshave been supplied by the appellant or his company and thus no question arises of payingGST. As per management no substantial liability may arise as contended by them in Supremecourt. In our opinion the management should provide for any liability which may ariseout of such investigation.

2) The company has outstanding statutory dues as per books of accounts for Rs1127106/- which are not been paid during the current year also. The company shouldprovide for interest and penalty for the same in books of accounts.

3) The Company had a Service Tax liability of Rs. 7505569/- as on 1st April 2019pertaining to previous years. Management of the company has provided justification thatsince payment was not received the liability is not crystalised. Based on abovejustification the management has written off the service tax liability of Rs. 7505569/-hence we hereby qualify the Report since the Loss of the Company is understated by Rs.7505569/- during the year and liability is understated by the Rs. 7505569/-.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our qualified opinion exceptfor the information specified Basis for qualified opinion and in material uncertaintyrelated to going concern paragraph.

Material uncertainty related to going concern

We draw attention to the standalone financial statements which indicates that theCompany has incurred a net loss of Rs.'33840484 for the year ended March 31 2021.There are no operations in the company during the year mainly due to the credit facilityof the company declare NPA by the bank and COVID-19 lockdown indicating that presently amaterial uncertainty exists that may cast significant doubt on the Company's ability tocontinue as a going concern due to operation being disrupted. The management of thecompany has represented that it will be able to revive operation as company has assets andactive orders in hand the company continue to be a going concern.

Our opinion is not modified in respect of this matter.

Emphasis of Matter

1) In absence of no substantial movement in Debtors and creditors of the company duringthe year there exists reasonable doubt whether the entire amount will be realised. Themanagement should consider suitable provision for the same considering the age of Debtors.Simultaneously the creditors might consider to go against the company in case the paymentis not made in time. The company should make suitable provisions to cover the same.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Inaddition to the matters described in the Basis for Qualified Opinion section and Materialuncertainty related to going concern section we have determined the matters describedbelow to be the key audit matters to be communicated in our report.

Sr No Key Audit Matter Auditor's Response
1 Verification and valuation of Inventory Due to Global Covid pandemic of 2019 there was no operation in the company leading to no moment of inventory. Also the inventory was not physically verified during the year. The management has made provision of 50% of inventory to account for pilferage loss. And have Discussed with management to physically verify the inventory and write off the loss in inventory due to pilferage.
2 Old balances of Debtors and creditors. There are certain debtors and creditors without any moment during the year. Though confirmation has been obtained from some the amount should be realised from debtors and paid to creditors. Discuss with management to take adequate steps to realise the debtors and pay the creditors.
3 Unbilled receivable The company has sent notice to UP Government for work order no 3674 for issuing "Mukhyamantri kisan and Sarvahit Bima Care Card" on 26.06.2020. The UP government has appointed arbitrator on 15.12.2020 for the same. Discussion with management for expediting the process of Arbitration to recover the claim.

Other Information

The Company's management and Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditor's reportthereon. Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and those charged with governance for the Ind ASfinancial 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 changes in equityand cash flows of the Company in accordance with the Indian accounting standard (Ind AS)and accounting principles generally accepted in India specified under section 133 of theAct read with the Companies (Indian

Accounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statement that give a true and fairview and are free from material misstatement whether due to fraud or error.

In preparing the Ind AS financial statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditors' Responsibility for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Ind AS financial statements.

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 Ind AS financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• 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 Ind AS 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. Kindly refer "Material uncertainty related to goingconcern" section of our report.

• Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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 Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 and on the basis of such checks of the books andrecords of the Company as we considered appropriate and according to the information andexplanation given to us we give in "Annexure 1" a statement on the mattersspecified in paragraphs 3 & 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 except for thematter mentioned in "Basis for Qualified opinion" paragraph.

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 except for the mattermentioned in "Basis for Qualified opinion" paragraph.

c) The Balance Sheet the Statement of Profit and Loss including other comprehensiveincome the Cash Flow Statement and the statement of changes in equity dealt with by thisReport are in agreement with the books of account except for the matter mentioned in"Basis for Qualified opinion" paragraph.

d) In our opinion the aforesaid Ind AS Financial Statements comply with the IndianAccounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevantrules issued thereunder.

e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 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 we give ourseparate Report in "Annexure 2".

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 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company does have any pending litigations which may impact its financialposition. Kindly refer Basis for qualified opinion and Material uncertainty related togoing concern for more detail.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

PLACE: MUMBAI : FOR GUPTA RAJ & CO. CHARTERED ACCOUNTANTS FIRM NO. 001687N
DATED 30-06-2021 CA NIKUL JALAN PARTNER MEMBERSHIP NO. 0112353
UDIN : 21112353AAAAEH5284

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

(i) In respect of its fixed assets:

(a) The company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets. However no separate fixed assetregister is maintained.

(b) As informed to us all fixed assets have been physically verified by the managementat reasonable intervals. No material discrepancies were noticed on such verification

(c) The title deeds of immovable properties recorded in the books of account of theCompany are held in the name of the Company.

(ii) The inventory has not been physically verified by management during the year dueto Covid 19. The management has made a provision of 50 percent on account of pilferageloss due to non movement of stock because of Covid 19. The management has informed us thatthey shall be verifying the stock physically as soon as the restrictions are resumed andshall make necessary adjustments in the financials.

(iii) As informed the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Therefore provisions of sub clause (a) (b) and

(c) of clause (iii) of paragraph 3 of the Order are not applicable to the Company.

(iv) As per the information and explanation given to us in respect of loansinvestments guarantees and securities the Company has complied with the provisions ofSection 185 and 186 of the Act.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the provisions of Sections 73to 76 of the Act and the rules framed there under. Therefore the provisions of clause (v)of paragraph 3 of the Order are not applicable to the Company.

(vi) As per the information and explanations given to us in respect of the class ofindustry in which the Company falls the maintenance of cost records has not beenprescribed by the Central Government under sub-section (1) of section 148 of the CompaniesAct 2013. Therefore the provisions of clause (vi) of paragraph 3 of the Order are notapplicable to the Company.

(vii) In respect of statutory dues:

(a) The company is not regular in depositing with appropriate authority undisputedstatutory dues viz. Profession Tax TDS Service Tax GST FBT and Income Tax. Accordingto the information and explanations given to us below undisputed amounts payable were inarrears as at 31st March 2021 for a period of more than six months from the date theybecame payable.

Nature of dues Amount (') (excluding interest if any)
Profession Tax 128650
TDS on Professional fees 695632
TDS on contractor 31610
TDS on Brokerage 6816
TDS on Rent 85719
TDS on Salary 160680
TDS on Interest 18000

(b) According to the information and explanations given to us there are no dues ofincome tax or sales tax or service tax or duty of customs or duty of excise or value addedtax or cess which have not been deposited on account of any dispute.

(viii) According to the information and explanation given to us the company hasdefaulted in repayment of Interest and Principal amount taken from SBI bank. Kindly referpoint no. 4 of Basis for Qualified opinion of the report. The Company has not taken loanfrom government or has no dues to debenture holders.

(ix) The Company has neither raised money by way of public issue offer nor has obtainedany term loans. Therefore the provisions of clause (ix) of paragraph 3 of the Order arenot applicable to the Company.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by themanagement.

(xi) As per the information and explanations given to us no managerial remunerationhas been paid / provided and thus the provisions of Section 197 read with Schedule V tothe companies Act 2013 and provisions of clause xi of the Order are not applicable toCompany.

(xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause (xii) of paragraph 3 of the Order are not applicable to the Company.

(xiii) As per the information and explanation given to us all transactions enteredinto by the Company with the related parties are in compliance with Sections 177 and 188of Act where applicable and the details have been disclosed in the Financial Statementsetc. as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforethe provisions of clause (xiv) of paragraph 3 of the Order are not applicable to theCompany

(xv) The Company has not entered into any non-cash transactions with directors orpersons connected with him. Therefore the provisions of clause (xv) of paragraph 3 of theOrder are not applicable to the Company.

(xvi) As per the information and explanation given to us the Company is not requiredto be registered under Section 45-IA of the Reserve Bank of India Act 1934.

PLACE: MUMBAI FOR GUPTA RAJ & CO. CHARTERED ACCOUNTANTS FIRM NO. 001687N
DATED:30-06-2021 CA NIKUL JALAN PARTNER MEMBERSHIP NO. 0112353
UDIN : 21112353AAAAEH5284

Annexure 2 to the Independent Auditors' Report

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act2013 ("the Act")

We have audited the internal financial controls over financial reporting of TWINSTARINDUSTRIES LTD ("the Company") as of 31st March 2021 in conjunctionwith our audit of the Ind AS financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

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 specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our auditmaterial weakness has been identified in the Company's internal financial controls overfinancial reporting as at March 31 2021 as regards evaluation of uncertainty for thematters mentioned in the Basis of Qualified opinion of our report.

A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis.

In our opinion except for the possible effects of the material weakness described aboveon the achievement of the objectives of the control criteria the Company has maintained inall material respects adequate internal financial controls over financial reporting withreference to these standalone financial statements and such internal financial controlsover financial reporting with reference to these standalone financial statements wereoperating effectively as of March 31 2021 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.

PLACE: MUMBAI FOR GUPTA RAJ & CO. CHARTERED ACCOUNTANTS FIRM NO. 001687N
DATED : 30-06-2021 CA NIKUL JALAN PARTNER MEMBERSHIP NO. 0112353
UDIN : 21112353AAAAEH5284

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