Report on the Standalone Financial Statements
To The Members of GLOBUS SPIRITS LIMITED
We have audited the accompanying standalone financial statements of GLOBUS SPIRITSLIMITED ("the Company") which comprise the Balance Sheet as at 31st March2015
the Statement of Profit and Loss the Cash Flow Statement and a summary of thesignificant accounting policies and other explanatory information for the year then ended.
Management's Responsibility for the Standalone
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 records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these standalone 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 thereunder.
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 andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers 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 but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial control systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness 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 qualified audit opinion on the standalone financial statements.
Basis for Qualified Opinion
As on March 31 2015 Fixed Assets include Intangible Assets aggregating to Rs 2164.95Lacs (March 31 2014 Rs 2886.60 Lacs) under the head "Knowhow and NewBrand Development" representing intangibles internally generated by the Companythrough expenditure on advertisement and promotional expenses. Such recognition is not inaccordance with Accounting Standard 26 "Intangible Assets". Had theCompany complied with requirements of AS-26 Fixed Assets as at March 31 2015 would havebeen lower by Rs 2164.95 Lacs (March 31 2014 Rs 2886.60 Lacs)Depreciation and amortisation expense for the year would be lower by Rs 721.65Lacs Net profit after taxes for the year would be converted into net losses after tax ofRs 709.00 Lacs and Reserves and Surplus would be lower by Rs 1415.70 Lacs.
In our opinion and to the best of our information and according to
the explanations given to us except for the effects of the matter described in theBasis for Qualified Opinion paragraph above
the aforesaid standalone financial statements give the information required by the Actin the manner 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 31stMarch 2015 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 (Auditors Report) Order 2015 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in the Annexure a statement on the matters specified in paragraphs 3 and 4 of theOrder.
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) Except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above in our opinion proper books of account as required by lawhave 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
(d) Except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above in our opinion the aforesaid standalone financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on 31stMarch 2015 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2015 from being appointed as a director in terms of Section164 (2) of the Act.
(f) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.
(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 of pending litigations on its financialposition in its financial statements - Refer Note 26.1 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.
For DELOITTE HASKINS & SELLS
(Firm Registration No. 015125N)
(Membership No. 094468)
New Delhi May 20 2015
ANNEXURETOTHE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 under Report on Other Legal and
Regulatory Requirements section of our report of even date)
Having regard to the nature of the Companys business / activities / resultsduring the year clauses (v) and (x) of paragraph 3 of the Order are not applicable to theCompany.
(i) In respect of the Companys fixed assets:
(a) The Company has maintained records showing particulars including situation offixed assets however with respect to quantitative details the same is in process ofbeing updated. For the assets acquired during the year such particulars have beenmaintained.
(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of the fixed assets at reasonable intervals. According to theinformation and explanation given to us the Company is in process of reconciling the samewith fixed assets register accordingly discrepancies if any has not been identified onsuch verification.
(ii) In respect of the Companys inventories:
(a) As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals except in case of inventories lying with third partieswhere confirmations has been obtained from third parties in respect of such inventories.
(b) In our opinion and according to the information and explanation given to us theprocedures of physical verification of inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
(c) In our opinion and according to the information and explanations given to us theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.
(iii) According to the information and explanations given to us the Company hasgranted loans secured or unsecured to companies firms or other parties covered in theRegister maintained under Section 189 of the Companies Act 2013. In respect of suchloans:
(a) The Company has granted loan amounting to Rs 31.14 lacs to a wholly ownedsubsidiary during the year. At the year-end the outstanding balances of such loansgranted was
Rs 31.14 lacs and the maximum amount involved during the year was Rs 31.14 lacs.
(b) According to the information and explanation given to us the above loans arereceivable on demand which as informed to us have not been recalled by the Company.Accordingly para 3(iii)(b) of the Order is not applicable.
(iv) In our opinion and according to the information and explanations given to usthere is an adequate internal control system commensurate with the size of the Company andthe nature of its business for the purchase of inventory and fixed assets and for the saleof goods and services. However for purchase of fixed assets certain controls need to bestrengthened and the weakness is a continuing failure to correct major weaknesses in suchinternal control system.
(v) We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended prescribed by the CentralGovernment under sub-section (1) of Section 148 of the Companies Act 2013 and are of theopinion that prima facie the prescribed cost records have been made and maintained. Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.
(vi) According to the information and explanations given to us in respect of statutorydues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income-tax Sales Tax WealthTax Service Tax Customs Duty Excise Duty Value Added Tax Cess and other materialstatutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident FundEmployees State Insurance Income-tax Sales Tax Wealth Tax Service Tax CustomsDuty Excise Duty Value Added Tax Cess and other material statutory dues in arrears asat March 31 2015 for a period of more than six months from the date they became payable.
(c) Details of dues of Income-tax and Excise Duty which have not been deposited as atMarch 31 2015 on account of disputes are
|Name of Statute ||Nature of Dues ||Forum where Dispute is Pending ||Period to which the Amount Relates ||Amount Involved (Rs *) |
|Central Excise Laws ||Excise Duty ||High Court ||1995-96 ||19739456 |
| || || ||2004-10 || |
| || ||Appellate authority upto Commissioners level ||1996-97 ||1111279 |
|Income Tax Act 1961 ||Income tax ||Appellate authority upto Commissioners level ||2010-11 ||636239 |
| || || ||2011-12 ||20907840 |
* Amount as per demand orders including interest and penalty wherever indicated in theOrder.
The following matters which have been excluded from the table above have been decidedin favour of the Company but the department has preferred appeals at higher levels. Thedetails are given below:
|Name of Statute ||Nature of ||Forum where Dispute is Pending Dues ||Period to which the Amount Relates ||Amount Involved (Rs * ) |
|Sales Tax Laws ||Sales tax ||High Court ||2004 07 ||77100339 |
*Amount as per demand orders including interest and penalty wherever indicated in theOrder.
There were no dues of Sales Tax Wealth Tax Service Tax Customs Duty Value Added Taxand Cess which have not been deposited as at March 31 2015 on account of disputes.
(d) There are no amounts that are due to be transferred to the Investor Education andProtection Fund in accordance with the relevant provisions of the Companies Act 1956 (1of 1956) and Rules made thereunder.
(vii) After considering the effect of our audit qualification reported in the Basis ofQualified Opinion of our Audit Report The Company does not have accumulated losses. TheCompany has not incurred cash losses during the financial year covered by our audit and inthe immediately preceding financial year.
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to a financial institution; howeverduring the year there are delays in repayment of dues to banks for a maximum period of 22days with a maximum amount involved was Rs 5079961. There was no defaults at the yearend. The Company has not issued any debentures.
(ix) In our opinion and according to the information and explanations given to us theterm loans have been applied by the Company during the year for the purposes for whichthey were obtained other than temporary deployment pending application.
(x) To the best of our knowledge and belief and according to the information andexplanations given to us no fraud by the Company and no material fraud on the Company hasbeen noticed or reported during the year.
| ||For DELOITTE HASKINS & SELLS |
| ||Chartered Accountants |
| ||(Firm Registration No. 015125N) |
| ||VIJAY AGARWAL |
| ||Partner |
|New Delhi May 20 2015 ||(Membership No. 094468) |