To The Members of Cantabil Retail lndia Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Cantabil RetailIndia Limited ( the company )which comprise the Balance Sheet as at 31st March 2017 theStatement of Profit and Loss the Cash Flow Statement and a summary of significantaccounting policies and other explanatory information.
Management s Responsibility for the Standalone Financial Statements
The Company s Board of Directors is responsible for the matters in section 134(5) ofthe Companies Act 2013 ( the Act ) with respect to the preparation and presentation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes the maintenance of adequate accountingrecords in accordance with the provision of the Act for safeguarding of the assets of theCompany and for preventing and detecting the frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Auditor s Responsibility
Our responsibility is to express an opinion on these stand alone financial statementsbased on our audit.
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 there under.
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe 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 the auditor sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company s preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company s Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 and its profit 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 ( the Order ) issued bythe Central Government of India in terms of sub-section (11) of section 143 of the Act wegive in the Annexure A a statement on the matters specified in the paragraph 3 and 4 ofthe Order.
2. As required by section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;
d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;
e) On the basis of written representations received from the directors as on 31 March2017 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2017 from being appointed as a director in terms of Section 164(2) of theAct;
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 and
g) With respect to the other matters included in the Auditor s Report in accordancewith amended Rule 11 of the Companies (Audit and Auditors) Amendment Rules2017 in ouropinion and 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 33(c) to the financial statements;
ii. There are no material foreseeable losses on long term contracts includingderivative contracts therefore no such provision is required to be made.
iii. There has been no delay in transferring amount required to be transferred to theinvestor education and protection fund by the company.
iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management.
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
The Annexure referred to in our Independent Auditors Report to the members of theCompany on the standalone financial statements for the year ended 31st March 2017 wereport that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner. In accordance with this programcertain fixed assets were verified during the year and no material discrepancies werenoticed on such verification. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets.
(c) According to the information and explanation given to us and on the basis of ourexamination of the records of the company the title deeds of the immovable properties areheld in the name of the company.
(ii) (a) The management of the Company has conducted the physical verification ofinventory at reasonable intervals during the year.
(b) The procedure of physical verification of inventory followed by the management isreasonable and adequate in relation to the size of the Company and nature of its business.
(c) The Company has maintained the proper records of inventory and no materialdiscrepancies were noticed on physical verification.
(iii) The Company has not granted any loans to companies firms or other partiescovered in the register maintained under section 189 of the Companies Act 2013 ( the Act).
(iv) The company has not granted any loans under provisions of section 185 and hascomplied with provisions of section 186 of the Companies Act 2013in respect of loansinvestments guarantees and security.
(v) The Company has not accepted any deposits under provisions of sections 73 to 76 orany other relevant provisions of the Companies Act 2013.
(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the company is regular in depositingundisputed statutory dues including provident fund employees state insurance income-taxsales-tax service tax duty of customs duty of excise value added tax cess and anyother material statutory dues with the appropriate authorities.
(b) According to the information and explanations given to us below given dues ofincome tax sales tax service tax duty of excise value added tax and cess have not beendeposited with the appropriate authorities on account of dispute.
|Name of the statute ||Nature of dues ||Amount (in Rs) ||Period to which the amount retates ||Forum where dispute is pending |
|Central Excise Act 1944 ||Denial of CENVAT of Service Tax ||8635176* ||FY 2012-13 ||CESTAT Bench Delhi |
* A stay order has been received against the amount disputed and not deposited.
(viii) The company has not defaulted in repayment of loans or borrowing to a financialinstitution bank Government or dues to debenture holders.
(ix) The company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments) and term loans availed by the company wereapplied for the purposes for which those are raised.
(x) In our opinion no material fraud by the company or on the Company by its officersor employees has been noticed or reported during the course of our audit.
(xi) In our opinion and according to the information and the explanations given to usand based on examination of records of the company the company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act.
(xii) In our opinion and according to information given to us the company is not anidhi Company. Accordingly paragraph 3(xii) of the order is not applicable.
(xiii) In our opinion and according to the information and the explanations given to usand based on our examination of the records of the company all transactions with therelated parties are in compliance with sections 177 and 188 of Companies Act 2013 whereever applicable and the details of such transactions have been disclosed in the FinancialStatements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and the explanations given to us the company has notentered into any non-cash transactions with directors or persons connected with him underthe provisions of section 192 of Companies Act 2013
(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT
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 CantabilRetail India Limited ( the company ) as of March 31 2017 in conjunction with our auditof the standalone financial statements 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 ( ICAI ). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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.
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 beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor s judgement including the assessment of the risks ofmaterial misstatement 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 standalone financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with 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 standalone 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.
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 2017 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.
| ||For SURESH & ASSOCIATES |
| ||FRN:003316N |
| ||Chartered Accountants |
| ||(CA SURESH K GUPTA) |
|Dale : 26th May 2017 ||Partner |
|Place : New Delhi ||M. No. 080050 |