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Phoenix Mills Ltd.

BSE: 503100 Sector: Infrastructure
NSE: PHOENIXLTD ISIN Code: INE211B01039
BSE LIVE 15:43 | 16 Aug 523.85 13.80
(2.71%)
OPEN

515.85

HIGH

536.00

LOW

515.85

NSE 15:31 | 16 Aug 524.65 15.35
(3.01%)
OPEN

515.70

HIGH

535.00

LOW

515.70

OPEN 515.85
PREVIOUS CLOSE 510.05
VOLUME 57791
52-Week high 574.30
52-Week low 285.05
P/E 51.76
Mkt Cap.(Rs cr) 8,018
Buy Price 523.85
Buy Qty 20.00
Sell Price 0.00
Sell Qty 0.00
OPEN 515.85
CLOSE 510.05
VOLUME 57791
52-Week high 574.30
52-Week low 285.05
P/E 51.76
Mkt Cap.(Rs cr) 8,018
Buy Price 523.85
Buy Qty 20.00
Sell Price 0.00
Sell Qty 0.00

Phoenix Mills Ltd. (PHOENIXLTD) - Auditors Report

Company auditors report

TO THE MEMBERS OF

THE PHOENIX MILLS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of The PhoenixMills Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2016 and the Statement of Profit and Loss and Cash Flow Statement for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation.

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 provision of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofthe appropriate accounting policies; making judgements and estimates that are reasonableand prudent; 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 fair presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor’s Responsibility

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. ose standards require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether the financialstatements 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’s judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company’s preparation of the financial statementsthat give a true and fair view in order to design audit procedures that are appropriate inthe circumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by theCompany’s Directors as well as evaluating the overall presentation of the financialstatements.

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.

Opinion

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 31st March 2016 and its profit and its cash flows for the year ended on that date.

Matter of Emphasis

We draw attention to Note no. 36 of the accompanying statement relating to thecompany’s investment in the equity shares of Entertainment World Developers Limited(EWDL) and the pending realization from EWDL against the put option exercised on FullyConvertible Debentures (FCDs) of Treasure World Developers Private Limited (TWDPL). Thenet worth of EWDL/ TWDPL has been eroded as per the latest unaudited accounts as at 31stMarch 2014. For the reason stated in the aforesaid note Board has estimated and madeprovision for impairment of the investment and amount due on the put option on FCD’sof Rs 1052500000 (including Rs 210000000 for the current year) as at 31stMarch 2016 which is considered adequate.

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 A" a statement on the mattersspecified 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 appears from our examination of those books.

c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby 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 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms ofsection 164(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".

g) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rules 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 27 (b) to (f) to the financialstatements.

ii) The Company did not have any material foreseeable losses on long-term contractsincluding derivative contracts that require provision under any law or accountingstandards for which 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.

For A. M. Ghelani & Company For Chaturvedi & Shah
Chartered Accountants Chartered Accountants
Registration No : 103173W Registration No : 101720W
Chintan A. Ghelani Jignesh Mehta
Partner Partner
Membership No.: 104391 Membership No.: 102749
Place: Mumbai Place: Mumbai
Date: 13th May 2016 Date: 13th May 2016

"Annexure A" to Independent Auditors’ Report referred to in Paragraph 1under the heading of "Report on other legal and regulatory requirements" of ourreport of even date.

(i) In respect of its fixed assets :

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.

b) As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.

c) In our opinion and according to the information and explanations given to us titledeeds of immovable properties are held in the name of the company.

(ii) As Company had no Inventories during the year clause (ii) of paragraph of 3 ofthe Order is not applicable to the Company.

(iii) The Company has not granted loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provision of Clause (iii) of paragraph 3 of theOrder is not applicable to the Company.

(iv) In respect of loans investments guarantees and security the Company hascomplied with the provisions of section 185 and 186 of the Act.

(v) According to the information and explanations given to us the Company has notaccepted any deposits within the meaning of provisions of sections 73 to 76 or any otherrelevant provisions of the Act and the rules framed there under. Therefore the clause (v)of paragraph 3 of the Order is not applicable to the Company.

(vi) To the best of our knowledge and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under sub section (1) of Section 148 ofthe Act in respect of the activities undertaken by the Company.

(vii) In respect of Statutory dues :

a) According to the records of the Company undisputed statutory dues includingprovident fund employees’ state insurance income tax sales tax service tax dutyof customs duty of excise value added tax cess and any other statutory dues have beenregularly deposited with appropriate authorities. According to the information andexplanations given to us no undisputed amounts payable in respect of the aforesaid dueswere outstanding as at March 31 2016 for a period of more than six months from the datethey became payable.

b) According to the records of the Company and the information and explanations givento us the disputed dues on account of income tax sales tax service tax duty ofcustoms duty of excise value added tax cess amounting to Rs 333096927/- that have notbeen deposited before appropriate authorities are as under :

Name of Statute Note of Dues Amount in Rupees Period to which the amount relates Forum where dispute is pending
Income Tax 1961 Income Tax 223616564 A.Y 2010-11 to A.Y 2013-14 CIT (Appeals)
Income Tax 1961 Income Tax 89172431 A.Y 2004-05 to A.Y 2010-11 ITAT
Service Tax (Finance Act 1994) Service Tax 20307932 F.Y 2006-07 CESTAT
Total 333096927

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to a financialinstitution or bank or to government and dues to debenture holders of the company.

(ix) Accordingly to information and explanation given to us the Company has not raisedany money by way of initial public offer or further public offer (including debtinstruments) and in case of terms loans raised by the company has been applied for thepurposes for which those are raised.

(x) Based on the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per information and explanations given to usno fraud by the Company or on the Company by its officers or employees has been noticed orreported during the year.

(xi) In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion company is not a nidhi company. Therefore the provisions ofclause (xii) of paragraph 3 of the Order are not applicable to the company.

(xiii) In our opinion and according to the information and explanations given to usall transactions with related parties are in compliance with sections 177 and 188 of theAct and their details have been disclosed in the financial statements etc. as required bythe applicable accounting standards.

(xiv) In our opinion and according to the information and explanations given to us thecompany has made qualified institutional placement of equity shares during the year underreview. The Company has complied with requirements of section 42 of the Act and amountraised have been used for the purpose for which funds were raised.

(xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transaction with the directors or personsconnected with him and covered under section 192 of the Act. Hence clause (xv) of theparagraph 3 of the Order is not applicable to the Company.

(xvi) To the best of our knowledge and as explained the Company is not required to beregistered under section 45-IA of the Reserve Bank of India Act 1934.

For A. M. Ghelani & Company For Chaturvedi & Shah
Chartered Accountants Chartered Accountants
Registration No : 103173W Registration No : 101720W
Chintan A. Ghelani Jignesh Mehta
Partner Partner
Membership No.: 104391 Membership No.: 102749
Place: Mumbai Place: Mumbai
Date: 13th May 2016 Date: 13th May 2016

"Annexure B" to Independent Auditors’ Report referred to in paragraph2(f) under the heading "Report on other legal and regulatory requirements" ofour report of even date.

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 Control over financial reporting of The PhoenixMills Limited ("the company") as of 31st March 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year then ended.

Management Responsibility for the 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 assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

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 issued by ICAI and deemedto be prescribed 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. ose 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.

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 judgment 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

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 reasonableassurance that transactions are recorded as necessary to permit preparation of 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 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 31st March 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 ICAI.

For A. M. Ghelani & Company For Chaturvedi & Shah
Chartered Accountants Chartered Accountants
Registration No : 103173W Registration No : 101720W
Chintan A. Ghelani Jignesh Mehta
Partner Partner
Membership No.: 104391 Membership No.: 102749
Place: Mumbai Place: Mumbai
Date: 13th May 2016 Date: 13th May 2016