To the Members of VTM Limited
Report on the audit of the Financial Statements Opinion
We have audited the financial statements of VTM Limited ("the Company")which comprise the balance sheet as at March 312020 and the statement of profit andloss(including other comprehensive income) the statement of changes in equity and thestatement of cash flows for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards prescribed under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules. 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 312020 and its profit total comprehensiveincome the changes in equity and its cash flows for the year ended as 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 financial statementssection of our report. We are independent of the Company in accordance with the code ofethics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's code of ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis lor our opinion.
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.
In our opinion and based on the information and explanations given to us there are noother key audit matters to be communicated in our report other than those morefullydescribed in the Emphasis of Matters paragraph of our report which describes theuncertainties and the impact of Covid-19 pandemic on the Company's operations and resultsas assessed by themanagement.
Principal Audit Procedures
We assessed the Company's process to identify assess and respond to risks ofmaterial misstatement considering the uncertainties and the impact of Covid-19 pandemic onthe Company's operations and results for the year under consideration
As part of the evaluation of whether sufficient appropriate audit evidence hasbeen obtained we have evaluated the appropriateness of our initial risk assessments andrevises previous risk assessments in light of the COVID-19 crisis for certain financialstatement areas including disclosures
We have considered the impact on the processes and controls that may beaffected by necessary changes to business processes in light of circumstances such astravel restrictions or as a result of remote working arrangements.
We have designed performed new procedures and modified previously planned auditprocedures as a result of the necessity for carrying out the audit procedures remotelyincluding verification of the source and completeness of data provided for audit Thisincludes performing alternative audit procedures to obtain audit comfort in respect ofsignificant account balances for recognition measurement and disclosures
We have audited the management's estimates required in the financial statementsincluding but not limited to estimates related to expected credit loss inventoryobsolescence impairment analyses by checking the reasonableness of underlying assumptionsin making those key estimates. We specifically discussed the impact of COVID-19 with themanagement and critically challenged the key assumptions and their reasonableness inmaking such key accounting estimates
We have considered the basis of management judgment in determining impact on thefinancial statements of any subsequent events related to the COVID-19 pandemic takinginto consideration the date of the financial statements the facts and circumstancespertaining to the entity and the conditions that existed at or arose after that date.As the impacts of the COVlD-19 outbreak continue to evolve including regulatoryrestrictions/ conditions capturing events that relate specifically to conditions thatexisted at the date of the financial statements or after the date of the financialstatements we have considered all subsequent events and transactions to substantiate ourconclusions on the appropriateness of management's assessment of the Covid 19 impact.
We have carried out a detailed analysis of data and performed additionalanalytical procedures for validating the management's assessment of impact due to covid 19related uncertainties
We have considered management's adjustments or disclosures which includes theimpact of the changes in the environment on the recognition and measurement of accountbalances and transactions in the financial statements or other specific disclosures.
Emphasis of Matter
The Company has made a detailed assessment of its liquidity position for the next yearand the recoverability and carrying value of its assets comprising property plant andequipment investments inventory and trade receivables. Based on current indicators offuture economic conditions the Company expects to recover the carrying amount of theseassets. The Company continues to evaluate them as highly probable considering the ordersin hand. The situation is changing rapidly giving rise to inherent uncertainty around theextent and timing of the potential future impact of the COVID-19 pandemic which may bedifferent from that estimated as at the date of approval of the financial results. TheCompany will continue to closely monitor any material changes arising of future economicconditions and impact on its business.
Our opinion is not modified in respect of this matter.
Information other than the financial statements and auditors' report thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis. Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot 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 standalone financial statements or our knowledge obtainedduring the course of our 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.
Management's responsibility for the 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 financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015. as amended from time to time andother accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies: making judgments and estimates that arcreasonable 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 financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany'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 todo so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process. Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the 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 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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
* Obtain an understanding of internal controls relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls
* Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
* Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 Annexure "A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.
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 statement of cash flow dealt with by thisreport are in agreement with the books of account;
(d) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act;
(e) On the basis of the written representations received from the directors as on March312020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312020 from being appointed as a director in terms of Section 164 (2) of theAct;
(0 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" Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting;
(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 ouropinion and to the best of our information and according to the explanations given to usthe remuneration paid by the Company to its directors during the year is in accordancewith 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 opinionand to the best of our information and according to the explanations given to us:
a. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements- Refer Note 43 to the financial statements:
b. 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; and
e. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
Further to the continuous spreading of COV1D -19 across India the Indian Governmentannounced a strict 21 -day lockdown on March 24 2020 which was further extended tillJune 30 2020 across the India to contain the spread of the virus. This has resulted inrestriction on physical visit to the client locations and the need for carrying outalternative audit procedures as per the Standards on Auditing prescribed by the Instituteof Chartered Accountants of India (ICAI).
As a result of the above the entire audit was carried out based on remote access ofthe data as provided the management. This has been carried out based on the advisory on"Specific Considerations while conducting Distance Audit/Remote Audit/ Online Auditunder current Covid-19 situation" issued by the Auditing and Assurance StandardsBoard of ICAI. We have been represented by the management that the data provided for ouraudit purposes is correct complete reliable and are directly generated by the accountingsystem of the Company without any further manual modifications.
We bring to the attention of the users that the audit of the financial statements hasbeen performed in the aforesaid conditions.
Our audit opinion is not modified in respect of the above.
| ||For CNGSN & Associates LLP |
| ||Chartered Accountants |
| ||Finn's Registration No.004915S/ S200036 |
| ||(CHINNSAMY GANESAN) |
| ||Partner |
| ||Membership No. 027501 |
| ||UDIN: 20027501AAAABF6624 |
|Place: Chennai || |
|Date June 122020 || |
Annexure "A" to the Independent Auditor's Report
(Referred to in paragraph I under 'Report on Other Legal and Regulatory Requirements'section of our report to the members of VTM Limited of even date)
1. In respect of the Company's fixed assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a program of verification to cover all the items of fixed assets ina phased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and nature of its assets
Pursuant to the program certain fixed assets were physically verified by themanagement during the year. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification.
(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date.
2. The inventory has been physically verified by the management during the year basedon planned cyclical count procedures in our opinion the frequency of such verification isreasonable. However due to the lock down restrictions issued by the Central and StateGovernment following the Covid19 pandemic the Company could not carryout physicalverification of inventory as at the reporting date. The physical verification of inventorywas done by the management subsequent to the balance sheet date on partial lifting of thelockdown We have relied on the management in this regard since we could not observe thephysical inventory verification because of the travel restrictions imposed due to Covid19.We have performed roll backward procedures based on the management physical verificationof inventory subsequent to the balance sheet date to reconcile with the book stock as atthe reporting date. According to the information and explanations given to us and based onthe alternative procedures performed as aforesaid no material discrepancies were noticedon such verification
3. According to information and explanation given to us the company has not grantedany loan secured or unsecured to companies firms limited liability partnerships orother parties covered in the register required under section 189 of the Companies Act2013. Accordingly paragraph 3 (iii) of the order is not applicable.
4. In our opinion and according to information and explanation given to us the companyhas not granted any loans or provided any guarantees or given any security to which theprovision of section 185 of the companies Act are applicable in respect of investmentsmade by the Company the Company had complied with the provisions of section 186 of theCompanies Act 2013
5. in our opinion and according to the information and explanations given to us thecompany has not accepted any deposits during the year and does not have any unclaimeddeposits as at march 312020 and accordingly paragraph 3 (v) of the order is notapplicable
6. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records tinderSection 148 of the Act and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. However we have not carried out a detailedexamination of the same
7. According to the information and explanations given to us in respect of statutorydues:
(a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income tax goods and service tax duty of customs duty of excise value addedtax cess and other material statutory dues have been generally regularly deposited duringthe year by the Company with the appropriate authorities taking into account the extendeddue dates notified by the respective authorities in view of Covid' 19 impact .
According to the information and explanations given to us. no undisputed amountspayable in respect of provident fund employees state insurance income tax sales taxservice tax goods and sendee tax duty of customs duty of excise value added tax cessand other material statutory dues were in arrears as at March 312020 for a period of morethan six months from the date they became payable taking into account the extended duedates notified by the respective authorities in view of Covid'19 impact.
(b) Details of dues of Income Tax Sales Tax Service Tax Excise Duty Value Added Taxand Goods and Service Tax which have not been deposited as at March 31 2018 on account ofdispute are given below:
|Statute ||Nature of dues ||Amount (Rs.) ||Period to which the amount relates ||Forum where the dispute is pending |
|TN VAT Act ||Penalty ||160568 ||2001-02 ||STAT Tamil Nadu |
|Income tax ||Payment of tax ||260.13380 ||2017-18 ||CIT (Appeal) Madurai |
8. In our opinion and according to the information and explanations given to us thecompany has not defaulted in repayment of dues to its bankers during the year. Accordingto the information and explanations given to us. the company has no outstanding dues toany financial institutions or any government or any debenture holders during the year.CNGSN & Associates LLP
9. In our opinion and according to the information and explanations given to us theterm loans taken by the Company have been applied for the purpose for which they wereraised. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year.
10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no material fraud on the Company by its officers oremployees has been noticed or reported during the year.
11. In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
12. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of theOrder is not applicable to the Company.
13. 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 section 177 and 188 of the Act Where applicable the details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards
14. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the order is not applicable.
15. 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 them. Accordingly paragraph 3(xv)of the order is not applicable.
16. According to the information and explanations given to us and based on ourexamination of the records of the company the company is not required to be registeredunder section 45-IAofthe Reserve Bank of IndiaAct 1934.
| ||For CNGSN & Associates LLP |
| ||Chartered Accountants |
| ||Firm Registration No.0049l5S/ S200036 |
| ||(CHINNSAMY GANESAN) |
| ||Partner |
| ||Membership No 027501 |
| ||UDIN 20027501AAAABF6624 |
|Place: Kappalur Madurai || |
|Date: June 12 2020 || |
Annexure "B" to the Independent Auditor's Report
(Referred to in paragraph 2 (f) under 'Report on other legal and regulatoryrequirements' section of our report to the Members of VTM Limited of even date)
Report on the internal financial controls over financial reporting under clause (1) ofsub- section 3 of section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of VTM Limited("the Company") as at March 31 2020 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date.
Management's responsibility for internal financial controls
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the standards on auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. Thosestandards and the guidance note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement in 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 control 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 (i) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company (ii) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (iii) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material 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 of 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 and according to the information and explanations given to us theCompany has in all material respects an adequate internal financial control system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 312020 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.
We bring to the attention of the users that the audit of the internal financial controlsystem over financial reporting and the operating effectiveness of such internal financialcontrols over financial reporting has been performed remotely in the conditionsmorefullyexplained in the Other Matters Paragraph of our independent Audit Report on the audit ofthe Financial Statements.
Our opinion on the internal financial control system over financial reporting is notmodified in respect of the above.
| ||For CNGSN & Associates LLP |
| ||Chartered Accountants |
| ||Firm Registration No.004915S/ S200036 |
| ||(CHINNSAMY GANESAN) |
| ||Partner |
| ||Membership No. 027501 |
| ||UDIN: 20027501AAAABF6624 |
|Place: Chennai || |
|Date: June 12 2020 || |