To
The Members Fenoplast Limited Hyderabad
Report on the Standalone Ind AS Financial Statements
Opinion
We have audited the accompanying standalone Ind AS financial statements of Fenoplast
Limited (‘the Company), which comprise the balance sheet as at 31st March 2019,
the statement of profit and loss (including other comprehensive income), statement of
changes in Equity and the statement of cash flows for the year then ended and notes to the
financial statements, including a summary of the significant accounting policies and other
explanatory information (herein after referred to as "standalone Ind AS financial
statements").
In our opinion and to the best of our information and according to the explanations
given to us, the afore said standalone financial statements give the information required
by the Companies Act, 2013 ("the Act") in the manner so required and give a true
and fair view in conformity with the accounting principles generally accepted in India, of
the state of affairs of the Company as at 31 March 2019, its profit (including other
comprehensive income), changes in equity and its cash flows for the year ended on that
date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Companies Act, 2013. Our responsibilities under those
Standards are further described in the Auditors Responsibilities for the Audit of the
Financial Statements section of our report. We are independent of the Company in
accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India together with the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Companies Act, 2013 and the Rules
thereunder, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
| Key Audit Matters |
Auditors response |
| Accuracy of recognition, measurement, presentation and disclosures of revenues and
other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with
Customers" (new revenue accounting standard) Principal Audit Procedures We assessed
the Companys process to identify the impact of adoption of the new revenue accounting
standard. Our audit approach consisted testing of the design and operating effectiveness
of the internal controls and substantive testing as follows: The application of the new
revenue accounting standard involves certain key judgements relating to identification of
distinct performance obligations, determination of transaction price of the identified
performance obligations, the appropriateness of the basis used to measure revenue
recognised over a period. Additionally, new revenue accounting standard contains
disclosures which involves collation of information in respect of disaggregated revenue
and periods over which the remaining performance obligations will be satisfied subsequent
to the balance sheet date |
Principal Audit Procedures We assessed the Companys process to identify the impact of
adoption of the new revenue accounting standard. Our audit approach consisted testing of
the design and operating effectiveness of the internal controls and substantive testing as
follows: The application of the new revenue accounting standard involves certain key
judgements relating to identification of distinct performance obligations, determination
of transaction price of the identified performance obligations, the appropriateness of the
basis used to measure revenue recognised over a period. Additionally, Evaluated the design
of internal controls relating to implementation of the new revenue accounting standard.
Selected a sample of continuing and new contracts, and tested the operating effectiveness
of the internal control, relating to identification of the distinct performance
obligations and determination of transaction price. Performed analytical procedures for
reasonableness of revenues disclosed by type and service offerings. We reviewed the
collation of information and the logic of the report generated from the budgeting system
used to prepare the disclosure relating to the periods over which the remaining
performance obligations will be satisfied subsequent to the balance sheet date. |
Other Information:
The Companys management and Board of Directors are responsible for the other
information. The other information comprises the information included in the Companys
annual report, but does not include the standalone financial statements and our auditors
report thereon.
Our opinion on the standalone financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the standalone financial statements or our 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 material misstatement of this other
information; we are required to report that fact. We have nothing to report in this
regard.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these Standalone Ind AS financial statements that give a true and fair view of the
financial position, financial performance including other comprehensive income, cash flows
and changes in equity of the Company in accordance with the accounting principles
generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed
under Section 133 of the Act read with relevant rules issued thereunder. This
responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the Standalone Ind AS financial
statements that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are
responsible for assessing the Companys ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Companys financial
reporting process.
Auditors Responsibility for the Audit of the Financial statements.
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone
financial statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)
of the Act, we are also responsible for expressing our opinion on whether the company has
adequate internal financial controls with reference to standalone financial statements in
place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of managements use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the standalone 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
auditors report. However, future events or conditions may cause the Company to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone
financial statements, including the disclosures, and whether the standalone financial
statements represent the underlying transactions and events in a manner that achieves fair
presentation.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters. We describe these matters
in our auditors report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order")
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Act, we give in the Annexure A to this report, a statement on the matters specified in
the paragraph 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 best
of 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 the
Company so far as it appears from our examination of those books;
c) the balance sheet, the statement of profit and loss, the statement of cash flows and
the statement of changes in equity dealt with by this Report are in agreement with the
books of account;
d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the
Accounting Standards (Ind AS) specified under Section 133 of the Act, read with relevant
rules issued thereunder;
e) on the basis of the written representations received from the directors as on 31
March 2019 taken on record by the Board of Directors, none of the directors is
disqualified as on 31 March 2019 from being appointed as a director in terms of Section
164(2) of the Act;
f) With respect to the adequacy of the internal financial controls over financial
reporting of the company and the operating effectiveness of such controls, refer to our
separate report in "Annexure B"; and
g) With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion,
and to the best of our information and according to the explanations given to us:
i. There are no pending litigations for the company, that will impact the financial
position of the company;
ii. The company did not have any long term contracts including derivative contracts for
which there were any material foreseeable losses;
iii. There were no amounts, required to be transferred to the Investor Education and
Protection Fund by the Company.
h) With respect to the other matters to be included in the Auditors Report in
accordance with the requirements of section 197(16) of the Act, as amended.
According to the information and explanations given to us and based on our examination
of the records the Company, the managerial remuneration paid to the directors are in
accordance with the provisions of section 197 read with Schedule V to the Act.
FOR VENUGOPAL & CHENOY
CHARTERED ACCOUNTANTS
FRN: 004671S
( P.V.SRI HARI )
Partner
Membership No.021961
Place : Hyderabad
Date : 24.05.2019
Annexure A to the Independent Auditors Report
The Annexure A referred to in our Independent Auditors Report to the members of the
Company on the standalone financial statements for the year ended March 31, 2019, we
report that:
i) a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
(b) As explained to us, all the fixed assets have been physically verified by the
management in a phased periodical manner, which in our opinion is reasonable having regard
to the size of the Company and nature of its assets. No material discrepancies have been
noticed on such physical verification.
(c) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the title deeds of immovable properties are
held in the name of the Company
ii) a) The inventories have been physically verified by the management during the year.
In our opinion, the frequency of such verification is reasonable.
b) The procedures of physical verification of inventories followed by the management
are reasonable and adequate in relation to the size of the Company and the nature of its
business.
c) The Company has maintained proper records of the said stocks. As explained to us,
there were no material discrepancies noticed on physical verification of inventory as
compared to the book records.
iii) During the year, the Company has not granted any loans secured or unsecured to
parties covered in the register maintained under section 189 of the Act. Hence paragraph
3(iii) of the Order is not applicable.
iv) In our opinion and according to the information and explanations provided to us,
during the year, the company has not given any loans, made investments, given guarantees
or given security to parties covered under the provisions of section 185 and 186 of the
Companies Act 2013. Hence paragraph 3(iv) of the order is not applicable.
v) The Company has not accepted any deposits, within the meaning of provisions of
sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the
rules framed there under
vi) We have broadly reviewed the books of account relating to materials, labour and
other items of cost maintained by the Company pursuant to the Rules made by the Central
Government for the maintenance of cost records under sub–section (1) of Section 148
of the Act in respect of the activities carried on by the Company, wherever applicable and
we are of the opinion that prima facie the prescribed accounts and records have been made
and maintained. However, we have not made a detailed examination of the records.
vii) a) According to the information and explanations given to us and on the basis of
examination of the records of the Company, amounts deducted/ accrued in the books of
account in respect of undisputed statutory dues including provident fund, employees state
insurance, income-tax, sales-tax, Goods and service tax, duty of customs, duty of excise,
cess and other material statutory dues have been regularly deposited during the year by
the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts are
payable in respect of income tax, sales tax, Goods and services tax, duty of customs, duty
of excise, value added tax or cess and other material statutory dues were in arrears as at
31 March 2019 for a period of more than six months from the date they became payable
b) According to information and explanations given to us and records of the Company
examined by us, particulars of Income Tax, Sales Tax, Value added Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess or Goods and Services Tax outstanding on account of
any disputes pending, are as under:
| Name of the Statute |
Nature of the Dues |
Amount (Rs. in Lakhs) |
Period to which the amount relates |
Forum where dispute is pending |
| Central Sales Tax Act 1956 |
CST |
28.76 |
2006-2007 |
Telangana Value Added Tax Tribunal At Hyderabad |
| Central Sales Tax Act 1956 |
CST |
0.75 |
2008-2009 |
Telangana Value Added Tax Tribunal At Hyderabad |
| Central Sales Tax Act 1956 |
CST |
13.35 |
2009-2010 |
Telangana Value Added Tax Tribunal At Hyderabad |
| Central Sales Tax Act 1956 |
CST |
(7.36) |
2010-2011 |
Telangana Value Added Tax Tribunal At Hyderabad |
| Central Sales Tax Act 1956 |
CST |
6.41 |
2011-2012 |
Telangana Value Added Tax Tribunal At Hyderabad |
| Central Sales |
CST |
284.60 |
2013-2014 |
Tax Liability levied by CTO General Bazar is set aside by A.D.C. (CT) Appeals and
remanded to CTO General Bazar. |
| Tax Act 1956 |
|
|
|
|
| Central Sales Tax Act 1956 |
CST |
208.78 |
2014-2015 |
The Appellate Dy.Commissioner (CT), Secunderabad Division, Hyderabad |
| VAT ACT |
VAT PENALTY |
0.12 |
2011-12 & 2012-13 |
Telangana Value Added Tax Tribunal At Hyderabad |
| VAT ACT |
VAT |
1.23 |
2011-12 & 2012-13 |
Telangana Value Added Tax Tribunal At Hyderabad |
| VAT ACT |
VAT |
22.79 |
2013-2014 |
Telangana Value Added Tax Tribunal At Hyderabad |
| VAT ACT |
VAT |
40.95 |
2014-2015 |
Telangana Value Added Tax Tribunal At Hyderabad |
| VAT ACT |
VAT PENALTY |
4.54 |
2013-2014 |
Telangana Value Added Tax Tribunal At Hyderabad |
| VAT ACT |
VAT PENALTY |
8.60 |
2014-2015 |
Telangana Value Added Tax Tribunal At Hyderabad |
| Assessment under Telangana Tax on entry of goods into local Areas Act, 2001 |
Entry tax -CST |
0.02 |
2011-12 |
The Appellate Dy.Commissioner (CT), Secunderabad Division, Hyderabad |
| Assessment under Telangana Tax on entry of goods into local Areas Act, 2001 |
Entry tax- CST |
1.47 |
2012-13 |
The Appellate Dy.Commissioner (CT), Secunderabad Division, Hyderabad |
| Assessment under Telangana Tax on entry of goods into local Areas Act, 2001 |
Entry tax- CST |
22.73 |
2013-14 |
The Appellate Dy.Commissioner (CT), Secunderabad Division, Hyderabad |
| Assessment under Telangana Tax on entry of goods into local Areas Act, 2001 |
Entry tax- CST |
21.68 |
2014-15 |
The Appellate Dy.Commissioner (CT), Secunderabad Division, Hyderabad |
| Assessment under Telangana Tax on entry of goods into local Areas Act, 2001 |
Entry tax- CST |
11.44 |
2015-16 |
The Appellate Dy.Commissioner (CT), Secunderabad Division, Hyderabad |
| Assessment under Telangana Tax on entry of goods into local Areas Act, 2001 |
Entry tax -CST |
4.38 |
2016-17 |
The Appellate Dy.Commissioner (CT), Secunderabad Division, Hyderabad |
| Income Tax Act, 1961 |
Income Tax |
2.20 |
1999-2000 |
ITAT |
| Income Tax Act, 1961 |
Income Tax |
31.90 |
2000-2001 |
ITAT |
| Income Tax Act, 1961 |
Income Tax |
10.44 |
2001-2002 |
ITAT |
| Income Tax Act, 1961 |
Income Tax |
1.89 |
2002-2003 |
ITAT |
| Income Tax Act, 1961 |
Income Tax |
4.55 |
2003-2004 |
ITAT |
| Income Tax Act, 1961 |
Income Tax |
13.91 |
2009-2010 |
ITAT |
| Employees Provident fund & Miscellaneous Provisions Act, 1952 |
Provident Fund |
20.85 |
April12 to December13 |
PF Appellate Tribunal, Delhi |
viii) According to the information and explanations given to us and on the basis of
examination of the records, the company has not defaulted in repayment of loans along with
interest to the Banks/ financial institutions during the year.
ix) The Company has not raised moneys by way of initial public offer or further public
offer (including debt instruments). In our opinion and according to the information and
explanations given to us, the term loans have been applied for the purpose for which the
loans were obtained.
x) According to the information and explanations given to us, no fraud by the company
or on the Company by its officers or employees has been noticed or reported during the
course of our audit.
xi) During the year, managerial remuneration has been paid or provided in accordance
with the requisite approvals mandated by the provisions of section 197 read with schedule
V to the Companies act 2013.
xii) The Company is not a Nidhi Company. Hence, paragraph 3 (xii) of the Order is not
applicable.
xiii) According to the information and explanations given to us and based on our
examination of the records of the Company, transactions with the related parties are in
compliance with sections 177 and 188 of the Act where applicable and details of such
transactions have been disclosed in the financial statements as required by the applicable
accounting standards.
xiv) According to the information and explanations give to us and based on our
examination of the records of the Company, the Company has not made any preferential
allotment or private placement of shares and has complied with Section 42 of the Companies
Act, 2013, and hence reporting under clause 3(xiv) of the Order is not applicable to the
Company.
xv) According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not entered into non-cash
transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of
the Order is not applicable.
xvi) The Company is not required to be registered under section 45-IA of the Reserve
Bank of India Act 1934.
FOR VENUGOPAL & CHENOY
CHARTERED ACCOUNTANTS
FRN: 004671S
( P.V.SRI HARI )
Partner
Membership No.021961
Place : Hyderabad
Date : 24.05.2019
Annexure – "B" to the Auditors Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Fenoplast
Limited ("the Company") as of 31 March 2019 in conjunction with our audit of the
standalone financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
issued by the Institute of Chartered Accountants of India (‘ICAI). These
responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to companys policies, the safeguarding of
its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with 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 section 143(10) of the Companies Act, 2013, to the extent
applicable to an audit of internal financial controls, both applicable to an audit of
Internal Financial Controls and, both issued by the Institute of Chartered Accountants of
India. Those Standards and the Guidance Note require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks 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 to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys 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 financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
The Company needs to document procedures and controls vis--vis internal controls over
Financial Reporting.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at 31 March 2019, based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
FOR VENUGOPAL & CHENOY
CHARTERED ACCOUNTANTS
FRN: 004671S
( P.V.SRI HARI )
Partner
Membership No.021961
Place : Hyderabad
Date : 24.05.2019
+91-9892691696
