To The Members Of
EMPIRE INDUSTRIES LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of EMPIRE INDUSTRIESLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2017the Statement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.
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 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 maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding 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 statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
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 accordance with the Standards on
Auditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements.
The procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of 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 stand alone 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 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 issued by the CentralGovernment of India in terms of subsection (11) of section 143 of the Act we give in theAnnexure
A' a statement on the matters specified in paragraphs 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 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account. d) In our opinionthe aforesaid financial statements comply with the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on March31 2017 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2017 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'; and
g) 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 if any of pending litigations as at March 312017 on its financial position in its financial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March 312017.
iv. The Company has provided requisite disclosures in the financial statements as toholdings and as well as dealings in Specified Bank Notes (SBNs) during the period from 8thNovember 2016 to 30th December 2016. In view of multiple locations of cash holdings heldby the company across India it was not practically possible for us to physically verifycash transactions in respects SBNs during the reporting period. However the Company hasprovided appropriate disclosures in its financial statements as to holdings as well asdealings in SBNs during the said period.
Based on the certified Cash Balances as at those dates furnished by the Company therequisite information provided in its Management Representation and based on our auditprocedures 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 AUDITOR'S REPORT
Referred to in Paragraph 1 under the heading Report on Other Legal and RegulatoryRequirements' of our report of even date on the standalone financial statements of theCompany for the year ended March 31 2017 :
1) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As explained to us the Company has a program for physical verification of fixedassets at periodic intervals. In our opinion the period of verification is reasonablehaving regard to the size of the Company and the nature of its assets. The discrepanciesnoticed on such verification were not material and have been properly dealt with in thebooks of account.
(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) (a) The inventory except stocks lying with third parties has been physicallyverified by the management during the year. In our opinion the frequency of suchverification is reasonable. The discrepancies reported on such verification were notmaterial and have been properly dealt with in the books of account. In respect ofinventories lying with third parties written confirmations have been obtained.
(b) In our opinion the procedures of physical verification of inventory followed bythe management are reasonable and adequate in relation to the size of the Company and thenature of its business.
(c) On the basis of our examination of the inventory records we are of the opinionthat the Company is maintaining proper records of inventory. The discrepancies noticed onverification of inventory as compared to book records were not material in relation to theoperations of the Company and have been properly dealt with in the books of account.
3) The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Act. Thereforethe provisions of sub-clause (a) (b) and (c) of paragraph 3(iii) of the Order are notapplicable to the Company for the current year.
4) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
5) The Company has accepted deposits from the public. The directives issued by TheReserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Companies Act and the Rules framed thereunder where applicable havebeen complied with.
6) According to the information and explanations given to us the maintenance of costrecords has been prescribed by the Central Government under section 148 (1) of the Actfor the Construction activity of the Company. We have broadly reviewed the books ofaccount maintained by the Company in respect of its construction activity and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of the records with a viewto determining whether they are accurate or complete.
7) (a) According to the information and explanations given to us and the recordsexamined by us the Company is generally regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Service TaxDuty of Customs Duty of Excise value added tax Cess and any other statutory dues withthe appropriate authorities. According to the information and explanations given to usthere are no undisputed dues payable in respect of above as at March 31 2017 for aperiod of more than six months from the date on which they became payable.
(b) According to the information and explanations given to us and on the basis of ourexamination of books of account and record the details of aforesaid statutory dues as atMarch 31 2017 which have not been deposited with the appropriate authorities on accountof any dispute are given below :
| ||Name of the Statute ||Particulars ||Amount ||Period to which the amount relates ||Forum where dispute is pending |
|1 ||The Finance Act 1994 ||Service Tax ||210573 ||F.Y. 2011- 2012 ||Commissioner of Central Excise |
|2 ||I. Tax Act 1962 ||I. Tax Demand ||5410120 ||A.Y. 2009- 2010 ||I.T.A.T. Mumbai |
| || do ||I. Tax Demand ||8638560 ||A.Y. 2011- 2012 ||CIT (Appeal) |
| || do ||I. Tax Demand ||11005710 ||A.Y. 2012- 2013 ||CIT (Appeal) |
| || do ||I. Tax Demand ||11890420 ||A.Y. 2013- 2014 ||CIT (Appeal) |
|3 ||MvAT Act 2002 ||vAT / CST dues ||8350719 ||F.Y. 2009- 2010 ||Jt. Commissioner Of Sales Tax (A) |
| || do || do ||911303 ||F.Y. 2010- 2011 || do |
| || do || do ||15929670 ||F.Y. 2011- 2012 || do |
8) According to the information and explanations given to us and based on the documentsand records produced to us the Company has not defaulted in repayment of dues to banks.
The Company does not have dues to financial institutions Government or debentureholders.
9) The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3 (ix) of the Order is not applicable. According to the information and explanations givento us and based on the documents and records examined by us on an overall basis themoneys raised by way of Term Loans have been applied for the purpose for which the loanswere raised.
10) Based upon the audit procedures performed and the information and explanationsgiven to us by the management we report that no material fraud on or by the Company byits officers or employees has been noticed or reported during the course of our audit.
11) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule v to the Act.
12) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
13) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
14) According to the information and explanations give 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.
15) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
16) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
ANNEXURE B' TO INDEPENDENT AUDITORS' REPORT
Referred in paragraph 10(f) of the Independent Auditor's Report of even date to themembers of EMPIRE INDUSTRIES LIMITED on the standalone financial statements for the yearended March 31 2017.
Report on the Internal Financial Controls under Clause (1) of Subsection 3 of Section143 of the Act
1. We have audited the Internal financial controls over financial reporting of EMPIREINDUSTRIES LIMITED ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
2. 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 Accountant 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 defection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
3. 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 deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofInternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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.
5. 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
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that : (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company.
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorized acquisitionuse or disposition of the company's assets that could have a material effect on thefinancial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting.
7. 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 of 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 of procedures may deteriorate.
8. 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 D. P. GHEVARIA & CO. |
| ||Chartered Accountants |
| ||Firm Regn. No. : 103176W |
| ||(D. P. GHEVARIA) |
|Place : Mumbai ||Proprietor |
|Dated : May 23 2017. ||Membership No. 032431 |