The Members of
WINRO COMMERCIAL (INDIA) LIMITED
Report on the audit of the Standalone Ind AS financial statements
We have audited the accompanying standalone Ind AS financial statements of WinroCommercial (India) Limited ("the Company") which comprise the balance sheetas at 31st March 2020 and the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Cash Flow Statement forthe year then ended and notes to the standalone Ind AS financial statements including asummary 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 standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 as amended (Act') in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31st March 2020 and totalcomprehensive income (comprising of profit and other comprehensive income) changes inequity and its cash flows for year ended then ended on that date.
Basis for opinion
We conducted our audit of the standalone Ind AS financial statements in accordance withthe standards on auditing specified under section 143 (10) of the Companies Act 2013. Ourresponsibilities under those Standards are further described in the auditor'sresponsibilities for the audit of the standalone Ind AS financial statements section ofour report. We are independent of the Company in accordance with the "Code ofEthics" issued by the Institute of Chartered Accountants of India 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 code of ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion on the standalone Ind AS financial statements.
Emphasis of Matters
We further draw your attention to Note 43 of Standalone Ind AS Financial Statements asregards the management's assessment of the financial impact due to restrictions andconditions related to Covid-19 pandemic situation.
Our report is not modified in respect of this matter.
Key audit matters
Key Audit Matters are those matters that in our professional judgments 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 andinforming our opinion thereon and we do not provide a separate opinion on these matters.We have determined the matters described below to be the key audit matters to becommunicated in our report.
|Key Audit Matters ||How our audit addressed the key audit matter |
|(a) Adoption of new accounting framework (Ind AS) || |
|Refer Note No. 2.2. and 40 to the standalone Ind AS financial statements ||We have assessed the design implementation and operating effectiveness of key internal controls over management's evaluation of exceptions and exemptions availed in line with the principles under Ind AS 101. |
|The Company adopted the Ind AS with the effect from 1st April 2019 notified by the Ministry of Corporate Affairs with the transition date of 1st April 2018. ||We evaluated management's exception and exemptions for compliance / acceptability under Ind AS 101. We understood the methodology implemented by management to give impact on the transition. |
|The following are the major impact areas for the Company upon transition: || |
|? Classification and measurement of financial assets ||We assessed areas of significant estimates and management judgement in line with principles under Ind AS. |
|? Additional disclosures as per the requirements of the new financial reporting framework. || |
|Transition to the new financial reporting framework is an intricate process involving multiple decision points for management i.e. Ind AS 101. First Time Adoption prescribes choices and exemptions for first time application of Ind AS principles at the transition date. ||We compared the reasonableness of management assumptions in respect of recognition and measurement of financial instruments etc. |
|We identified the transition date accounting as a key audit matter because of the significant degree of management judgement in the first- time application of Ind AS principles as at the transition date particularly in the areas noted above and the additional disclosures associated with transition to Ind AS. ||We performed the audit procedures on transition adjustments and subsequent measurements and found management's assessment to be reasonable and the disclosures are appropriate |
|(b) Fair Valuation of investments || |
|The Company's investments (other than investment in Associates) are measured at fair value at each reporting date and these fair value measurements significantly impact the Company's results. ||We have assessed the Company's process to compute the fair value of various investments. |
| ||For quoted instruments we have independently obtained market quotations and calculated the fair valuations. For the unquoted instruments we have obtained an understanding of the valuation methods used by management and analysed the reasonableness of the principal assumptions made for estimating the fair values and various other data used while arriving at the fair value measurement. |
|(c) Impairment of financial assets (expected credit losses) (ECL) || |
|Ind AS 109 requires the Company to provide for impairment of its financial assets. ||We have assessed the Company's accounting policies for impairment of financial assets and their compliance with Ind AS 109 and the governance framework approved by the Board of Directors pursuant to Reserve Bank of India guidelines issued on 13th March 2020. |
|ECL is a probability weighted estimate of credit losses. It is measured as the present value of cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with contract and the cash flows that the Company expects to receive). ||We have obtained an understanding of the ECL model used by management and analysed the reasonableness of the principal assumptions made for ECL Calculation. |
|The Company applies following quantitative and qualitative criteria to assess whether there is significant increase in credit risk or the asset has been credit impaired : || |
|(a) Historical trend of collection from counterparty; || |
|(b) Company's contractual rights with respect to recovery of dues from counterparty; || |
|(c) Credit rating of counterparty and any relevant information available in public domain; || |
|After applying above criteria Management has decided to make minimum ECL provision as the provisioning rates as per RBI prudential norms unless higher provisioning is required as per above criteria. || |
Information other than the Standalone Ind AS financial statements and auditors' reportthereon
The Company's boards of directors are responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report Management Discussion and AnalysisCorporate Governance Report in Annual Report of The Company for the Financial Year2019-20 but does not include the Standalone Ind AS financial statements and our auditor'sreport thereon.
Our opinion on the Standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto 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 Standalone Ind AS financial statements
The Company's board of directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Ind AS financial statements thatgive a true and fair view of the financial position financial performance changes inequity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards specified undersection 133 of the Act read with the Companies (Indian Accounting Standard) Rules 2015 asamended. 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 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 financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the Standalone Ind AS financial statements management is responsible forassessing the
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.
The boards of directors are also responsible for overseeing the Company's financialreporting process.
Auditor's responsibilities for the audit of the Standalone Ind AS financial statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASfinancial 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 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 Standalone Ind ASfinancial 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 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 Standalone IndAS financial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
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 Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on other legal and regulatory requirements
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 thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
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) the 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 Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;
e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the board of directors none of the directors is disqualifiedas on 31st March 2020 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". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting;
g) In our opinion and to the best of our information and according to the explanationsgiven to us the Company has not paid any remuneration to any director of the Company.However sitting fees paid to Independent directors are within the limit prescribed undersection 197 of the Act.
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 Ind AS financial statements Refer Note 31 to the Standalone Ind ASfinancial statements;
b. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and
c. There were no amounts required to be transferred to the Investor Education andProtection Fund by the Company.
For Ajay Shobha & Co.
Firm Registration No. 317031E
Ajay Gupta Partner
Membership No. 053071
Dated: 22nd July 2020
Annexure 'A' to the Independent Auditors' Report
The Annexure A referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31st March2020 we report that:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.
(b) As per the information and explanations given to us physical verification of fixedassets has been carried out once during the year and no material discrepancies werenoticed on such verification. In our opinion the frequency of verification is reasonablehaving regard to the size of the company and nature of its business.
(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.
2. Stock in trade (shares held for trading) consists of equity shares and mutual fundunits held in dematerialized form Physical form i.e Mutual Fund Statement/Sharecertificates. The Company verifies the balances in Depository Participant Account MutualFund statements and physical certificates with Books at regular interval. In our opinionthe frequency of verification is reasonable. On the basis of our examination of inventoryrecords in our opinion the company is maintaining proper records of inventory and thereis no material discrepancies noticed.
3. The Company has granted unsecured loans to companies covered in the Registermaintained under section 189 of the Act.
a. According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that the terms and conditions of theaforesaid loans granted by the Company were not prejudicial to the interest of theCompany.
b. In respect of the aforesaid loans the receipts of principal and interest wereregular.
c. In respect of the aforesaid loans no overdue amount of loans granted to companieslisted in the register maintained under Sec on 189 of the Act.
4. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013in respect of loans investments guarantees and security as applicable.
5. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public and hence the directives issued bythe Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 with regard tothe deposits accepted from the public are not applicable.
6. As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the company.
7. According to the information and explanations given to us and the books and recordsexamined by us in respect of statutory dues:
a) According to the information and explanations given to us and the records examinedby us the company is regular in depositing with appropriate authorities undisputedstatutory dues including income-tax goods and service tax duty of customs duty excisecess and other statutory dues wherever applicable.
b) According to the information and explanations given to us no undisputed amountspayable in respect of income tax goods and service tax custom duty excise duty cesswere in arrears as at 31st March 2020 for a period of more than six months fromthe date they became payable.
c) According to the information and explanations given to us the following dues havenot been deposited by the company on account of dispute:
|Sr. No. ||Name of the statue ||Nature of the due ||Amount ||Period to which the amount relates ||Forum where the dispute is pending ||Amount paid under protest/ refund adjusted |
| || || ||(Rs. Lakhs) || || ||(Rs. Lakhs) |
|1. ||Income tax Act 1961 ||Demand raised u/s 143(3) of Income Tax Act 1961 ||12.00 ||AY 2011-12 ||Rectification of order is pending with AO ||12.30 |
|2. ||Income tax Act 1961 ||Penalty raised u/s 271(1)(c) r.w section 274 of Income Tax Act 1961 ||35.14 ||AY 2014-15 ||Appeal filed with CIT (A) ||- |
8 In our Opinion and according to the information and explanations given to us thecompany has not defaulted in repayment of loans or borrowings to financial institutions.Further the Company has not taken any loan from banks or Governments or has not issuedany debentures.
9 Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly the provisionof clause (ix) of paragraph 3 of the Order is not applicable to the Company and hence notcommented upon.
10 Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
11 As per information and explanations given by the management Company has compliedthe provisions of section 197 of Companies Act 2013.
12 In our opinion the Company is not a Nidhi Company. Therefore the provision ofclause (xii) of paragraph 3 of the Order is not applicable to the Company.
13 In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theStandalone Ind AS Financial Statements as required by the applicable Indian accountingstandards.
14 Based upon the audit procedures performed and the information and explanations givenby the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provision of clause (xiv) of paragraph 3 of the Order is notapplicable to the Company and hence not commented upon.
15 Based upon the audit procedures performed and the information and explanations givenby the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provision of clause (xv) ofparagraph 3 of the Order is not applicable to the Company and hence not commented upon.
16 The company is required to be registered under section 45 IA of the Reserve Bank ofIndia Act 1934 and has obtained registration vide. Registration no. B-13.01873 dated 6thJuly 2007.
For Ajay Shobha & Co.
Firm Registration No: 317031E
Ajay Gupta Partner
Membership No. 053071
Place: Mumbai Dated: 22nd July 2020
ANNEXURE"B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE IND ASSTANDALONE FINANCIAL STATEMENTS OF WINRO COMMERCIAL (INDIA) LIMITED
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 WinroCommercial (India) Limited ("the Company") as of 31st March 2020in conjunction with our audit of the Standalone Ind AS 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 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 Reporting issued by the Institute of Chartered Accountants ofIndia". These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies 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 deemed to be prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. 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 controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the standalone Ind AS financialstatements.
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 adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2020based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.
For Ajay Shobha & Co.
Firm Registration No: 317031E
Ajay Gupta Partner
Membership No. 053071
Dated: 22nd July 2020