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Aditya Birla Fashion & Retail Ltd.

BSE: 535755 Sector: Industrials
NSE: ABFRL ISIN Code: INE647O01011
BSE LIVE 15:58 | 07 Dec 136.70 -0.35
(-0.26%)
OPEN

137.65

HIGH

138.00

LOW

136.10

NSE LIVE 15:40 | 07 Dec 136.80 -0.20
(-0.15%)
OPEN

137.75

HIGH

137.95

LOW

136.05

OPEN 137.65
PREVIOUS CLOSE 137.05
VOLUME 29267
52-Week high 263.00
52-Week low 124.00
P/E
Mkt Cap.(Rs cr) 10515.24
Buy Price 0.00
Buy Qty 0.00
Sell Price 136.70
Sell Qty 394.00
OPEN 137.65
CLOSE 137.05
VOLUME 29267
52-Week high 263.00
52-Week low 124.00
P/E
Mkt Cap.(Rs cr) 10515.24
Buy Price 0.00
Buy Qty 0.00
Sell Price 136.70
Sell Qty 394.00

Aditya Birla Fashion & Retail Ltd. (ABFRL) - Auditors Report

Company auditors report

To the Members of Aditya Birla Fashion and Retail Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Aditya Birla Fashion andRetail Limited ("the Company") (formerly Pantaloons Fashion & RetailLimited) which comprise the Balance Sheet as at March 31 2016 the Statement of Profitand Loss and Cash Flow Statement for the year then ended and a summary of significantaccounting policies and other explanatory information in which are incorporated thebranch’s financial statements for the year ended on that date audited by the branchauditors of the Company’s branches at Bengaluru.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal financial control thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing issued by the Institute of Chartered Accountants of Indiaas specified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgement including the assessment of the risks of material misstatementof the financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompany’s preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by the Company’s Directors as well as evaluatingthe overall presentation of the financial statements. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our audit opinion onthe financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2016 its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of Sub-section (11) ofSection 143 of the Act we give in the Annexure 1 a statement on the matters specified inparagraphs 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 purpose 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 report on the accounts of the branch offices of the Company audited underSection 143(8) of the Act by the branch auditor has been sent to us and have beenproperly dealt by us in preparing this report;

(d) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account and with the audited financialstatements received from branches;

(e) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 and Companies (Accounting Standards) Amendment Rules 2016;

(f) On the basis of written representations received from the Directors as on March31 2016 and taken on record by the Board of Directors none of the Directors isdisqualified as on March 31 2016 from being appointed as a Director in terms of Section164(2) of the Act;

(g) 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 2" to this report;

(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:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note 36 to the financial statements;

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

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

Other Matters

The accompanying financial statements include total assets of Rs.184996 lakh as atMarch 31 2016 and total revenues and profit before tax of Rs.391118 lakh and Rs.21935lakh respectively for the year ended on that date in respect of two branches which havebeen audited by the branch auditors which financial statements other financialinformation and auditor’s reports have been furnished to us. Our opinion in so faras it relates amounts and disclosures included in respect of these branches is basedsolely on the report of such branch auditors. Our opinion is not modified in respect ofthis matter.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration No.: 324982E/E300003

per Vijay Maniar

Partner

Membership No.: 36738

Place: Bengaluru

Date: 25th May 2016

Annexure 1 referred to in paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date

(i)(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(i)(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(i)(c) Based on our audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and according to the information andexplanations given by the management the title deeds of immovable properties are held inthe name of the Company except for the following immovable properties other thanself-constructed buildings aggregating to Rs.605 lakhs which are held in the name of thedemerged companies and is in the process of being transferred to the Company (refer Note32 to the financial statements).

Total Number of Cases Asset Category Amount as at 31 March 2016 Remarks
(Rs.in lakhs)
12 Freehold Land 592 Title deeds are in the names of the companies whose divisions got merged with the Company and are pending to be transferred in the name of the Company.
1 Building (Flat) 13 Title deeds are in the names of the companies whose divisions got merged with the Company and are pending to be transferred in the name of the Company.

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.

(iii)(a) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under Section 189 of theCompanies Act 2013. Accordingly the provisions of Clause 3(iii)(a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities granted in respect of whichprovisions of Sections 185 and 186 of the Companies Act 2013 are applicable and hencenot commented upon.

(v) The Company has not accepted any deposits from the public.

(vi) To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under Clause 148(1) of the Companies Act 2013for the products/services of the Company.

(vii)(a) Undisputed statutory dues including provident fund investor education andprotection fund employees’ state insurance excise duty income tax sales taxwealth tax service tax customs duty value added tax cess and other material statutorydues have generally been regularly deposited with the appropriate authorities.

(vii)(b) According to the information and explanations given to us no undisputedamounts payable in respect of provident fund employees’ state insurance income taxwealth tax service tax sales tax value added tax excise duty customs duty cess andother material statutory dues were outstanding at the year end for a period of more thansix months from the date they became payable.

(vii)(c) According to the records of the Company the dues outstanding of income taxsales tax wealth tax service tax duty of custom excise duty value added tax and cesson account of any dispute are as follows:

Name of the Statute Nature of the Dues Amount Involved Period to which the Amount Relates Forum where Dispute is Pending
(in Rs.)
Central Excise Act Excise Duty 21121944 1.05.2001 to 30.04.2003 Customs Excise and Service Tax Appellate Tribunal Bengaluru
Orissa Sales Tax Act Sales Tax 81000 2002-03 Assistant Commissioner of Commercial Taxes Bhubaneswar
Orissa Entry tax Entry Tax 32000 2002-03 Assistant Commissioner of Commercial Taxes Bhubaneswar
Kerala General Sales Tax Act Kerala Sales Tax 68000 2004-05 Kerala Sales Tax Appellate Tribunal Ernakulam
Karnataka Tax on Entry of Goods Act Entry Tax 221000 2002-03 to 2004-05 Joint Commissioner of Commercial Taxes - Appeal-1
West Bengal Sales Tax Sales Tax 121000 2005-06 Asst. Commissioner of Commercial Taxes
Textile Committee Act Textile Cess 13266000 1981-99 Textile Committee Cess Appellate Tribunal Mumbai
8130669 1999-05 Assessing Officer - Textiles Committee Coimbatore
Karnataka Sales Tax Sales Tax 341445 2005-07 JCCT - Appeals
48287594 2011-12 Hon'ble High Court Karnataka
Central Sales Tax Act Tax Central Sales 161000 2006-07 The Appellate Deputy Commissioner (CT) Secunderabad Division
Uttar Pradesh Commercial Tax Value Added Tax 72556564 2009-10 2010-11 and 2011-12 DCCT Uttar Pradesh
Uttar Pradesh- Value Added Tax Value Added Tax 41101963 2008-09 DCCT Uttar Pradesh
Custom Duty Custom Duty 40800000 1998-99 Hon'ble High Court Karnataka
Karnataka - Value Added Tax Value Added Tax 817012 2008-09 Deputy Commissioner of Commercial Taxes Bengaluru
Madhya Pradesh - Value Added Tax Value Added Tax 236400 2013-14 Commercial Tax Department

(viii) Based on our audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and according to information and explanationsgiven by the management we are of the opinion that the Company has not defaulted inrepayment of dues to a financial institution bank or debenture holders. The Company hasnot taken any loans or borrowings from the government.

(ix) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management the Company has not raised any money by way of initial publicoffer/ further public offer/ debt instruments. The monies raised by way of term loans wereapplied for the purposes for which those were raised.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud on or by the officers and employees ofthe Company has been noticed or reported during the year.

(xi) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that the managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of Section197 read with Schedule V to the Companies Act 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofClause 3(xi) of the order are not applicable to the Company and hence not commented upon.

(xiii) Based on our audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and according to the information andexplanations given by the management transactions with the related parties are incompliance with Sections 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the notes to the financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the Balance Sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence not commented upon.

(xv) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management the Company has not entered into any non-cash transactions withdirectors or persons connected with him.

(xvi) According to the information and explanations given to us the provisions ofSection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration No.: 324982E/E300003

per Vijay Maniar

Partner

Membership No.: 36738

Place: Bengaluru

Date: 25th May 2016

Annexure 2 referred to in paragraph 2 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date on the financial statements ofAditya Birla Fashion and Retail Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

To the Members of Aditya Birla Fashion and Retail Limited

We have audited the internal financial controls over financial reporting of AdityaBirla Fashion and Retail Limited ("the Company") (formerly Pantaloons Fashion& Retail Limited) as of March 31 2016 in conjunction with our audit of the financialstatements of the Company for 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 Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company’s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing as specified 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial 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 the 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 the generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with the authorisations ofmanagement and directors of the company; and (3) 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 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.

Opinion

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 March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

Explanatory Paragraph

We also have audited in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct the financial statements of the Company which comprise the Balance Sheet as at March31 2016 and the related Statement of Profit and Loss and Cash Flow Statement for theyear then ended and a summary of significant accounting policies and other explanatoryinformation and our report dated May 25 2016 expressed an unqualified opinion thereon.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration No.: 324982E/E300003

per Vijay Maniar

Partner

Membership No.: 36738

Place: Bengaluru

Date: 25th May 2016

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