To,
The Members of
Tirupati Industries (India) Limited.
Report on the Standalone Financial Statements
We have audited the accompanying Standalone financial statements of Tirupati
Industries India Limited ("the Company"), which comprise the Balance Sheet
as at 31 March 2017, the Statement of Profit and Loss, the Cash Flow Statement for the
year then ended, and a summary of significant accounting policies and other explanatory
information.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters in section 134(5)
of the Companies Act, 2013 ("the Act") with respect to the preparation of
these standalone financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014. This responsibility also includes the maintenance of adequate accounting
records in accordance with the provision of the Act for safeguarding of the assets of the
Company and for preventing and detecting the 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 internal
financial control, that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and presentation of
the financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these standalone financial statements
based on our audit. We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in the audit report
under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under
section 143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. 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. In making those risk assessments, the auditor
considers internal financial control relevant to the Companys preparation of the
financial statements that give true and fair view in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on
whether the company has in place an adequate internal financial control system over
financial reporting and operating efficiencies of such control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of the
accounting estimates made by Companys Directors, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is suffcient and appropriate to
provide a basis for our audit opinion on the financial statements.
Basis for Qualification
We draw attention to issue relating to uncertainty of recoverability in respect of
export receivables amounting to Rs.12.50 Crore. There is no movement in these accounts for
fairly long time and no confirmation for the outstanding amount has been received from
such debtor. Pending ultimate outcome of the matter, which is presently unascertainable in
the opinion of the Management, no adjustment has been made for the same in the financial
results. In view of the uncertainty on recoverability of the above export debtors
amounting to Rs.12.50 Crore, provision required for of the same has not been made in these
accompanying financial results and as a result the profit for the year to date result,
accumulated balance in Profit & Loss Account and sundry debtors at the end of the
period are over stated by the said amount. Our report is modified to that extent.
Opinion
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid Standalone financial statements, except for the matter
described in the Basis for Qualification Paragraph give the information required by the
Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India;
a) In the case of the Balance Sheet, of the state of afairs of the Company as at March
31, 2017;
b) In the case of the Statement of Profit and Loss, of the profit for the year ended on
that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that
date.
Emphasis of Matters
We draw attention to the following:
a) M/s Citibank, the lender to the company, has obtained order against the company from
the Debt Recovery Tribunal for recovery of its outstanding dues along with interest. As
explained to us, the Management has been taking appropriate counter legal action against
the same and is taking all steps to resolve the matter legally as well through
negotiations with the Bank.
b) Balances under certain trade receivables, current and non-current assets, trade
payables and other current liabilities have not been confirmed and consequential impact on
accounts, if any, is not ascertainable.
c) The company had made investment of Rs.40.00 lakhs in an unlisted Company. In absence
of financial information and documentary evidences, we are unable to comment whether there
is any diminution, other than temporary, in the value of this investment.
Our opinion s not qualified on the aforesaid matters.
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 subsection (11) of section 143 of
the Act ,we give in the in the Annexure a Statement on the matters specified in 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 except for the
matter stated in Emphasis of matters.
b) In our opinion proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement dealt
with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014, except for possible effect of matters described in basis
for qualified opinion.
e) On the basis of written representations received from the directors as on 31 March,
2017, taken on record by the Board of Directors, none of the directors is disqualified as
on 31 March, 2017, 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 included in the Auditors Report and in accordance
with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 in our opinion to the best
of our information and according to the explanations given to us:
i. The Company has Disclosed the impact of pending litigations on which impact on
financial position in its financial statements as referred to in 27B (1) to (4) to the
financial statements.
ii. The Company did not have any on long term contracts including derivative contracts
for which there were any material foreseeable losses.
iii. There is no requirement to transfer any amount, to the Investor Education and
Protection Fund by the company, since this clause is not applicable to the company.
For Mayra & Khatri Chartered Accountants
Firm Registration No.-106111W
Sd/- N. V. Sheth
Partner
Membership No. 35169
Place : Mumbai
Dated : 30/05/2017
"ANNEXURE B" TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE
STANDALONE FINANCIAL STATEMENTS OF TIRUPATI INDUSTRIES INDIA LIMITED
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 Tirupati
Industries India Limited ("the Company") as of March 31, 2017 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". 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 authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized 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.
Qualified opinion
According to the information and explanations given to us and based on our audit, the
following material weakness has been identified as at March 31, 2017: The Company needs an
appropriate internal control system for customer acceptance credit evaluation, material
and establishing customer credit limits for sales, which could potentially result in the
Company recognizing revenue without establishing reasonable certainty of ultimate
collection in light of uncertainty recoverability of substantial export receivables.
A ‘material weakness is a deficiency, or a combination of deficiencies, in
internal financial control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the companys annual or interim financial
statements will not be prevented or detected on a timely basis. In our opinion, the
Company has, in all material respects except as stated above, an internal financial
controls system over financial reporting commensurate with size of the company and nature
of its business and such internal financial controls over financial reporting were
generally operating effectively as at March 31, 2017, however the same needs to be further
strengthened 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
We have considered the material weakness identified and reported above in determining
the nature, timing, and extent of audit tests applied in our audit of the standalone
financial statements of the Company, and the material weakness does not affect our
qualified opinion on the standalone financial statements of the Company
For Mayra & Khatri Chartered Accountants
Firm Registration No.-106111W
Sd/-
N. V. Sheth
Partner
Membership No. 35169
Place : Mumbai
Dated : 30/05/2017
+91-9892691696
