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Provogue (India) Ltd.

BSE: 532647 Sector: Industrials
NSE: PROVOGE ISIN Code: INE968G01033
BSE LIVE 15:26 | 20 Nov 6.88 1.14
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OPEN 5.90
PREVIOUS CLOSE 5.74
VOLUME 1507420
52-Week high 6.88
52-Week low 3.80
P/E
Mkt Cap.(Rs cr) 161
Buy Price 6.88
Buy Qty 134215.00
Sell Price 0.00
Sell Qty 0.00
OPEN 5.90
CLOSE 5.74
VOLUME 1507420
52-Week high 6.88
52-Week low 3.80
P/E
Mkt Cap.(Rs cr) 161
Buy Price 6.88
Buy Qty 134215.00
Sell Price 0.00
Sell Qty 0.00

Provogue (India) Ltd. (PROVOGE) - Auditors Report

Company auditors report

To the Members of Provogue (India) Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Provogue (India)Limited ("the Company") which comprise the Balance Sheet as at 31st March2016 the Statement of Profit and Loss the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone 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 Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014.This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of 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 standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due 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 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 andthe disclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall 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 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 loss and its cash flows for the year ended on that date.

Emphasis of Matter:

We draw attention to the following matter in the Notes to the financial statements:

Note 31(A)(h) to the financial statements regarding non-provision of service tax forthe period from June 01 2007 to September 30 2011 on rent on immovable properties takenfor commercial use by the Company aggregating Rs. 279.47 Lacs pending final disposal ofthe appeal filed before the Hon’ble Supreme Court. The matter is contingent upon thefinal outcome of litigation.

Our opinion is not qualified in respect of the above matters.

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" statement on the mattersspecified in the paragraphs 3 and 4 of the Order.

2. As required by Section143 (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 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) The matter described in the Emphasis of Matters paragraph above in our opinionmay not have an adverse effect on the functioning of the Company.

(f) On the basis of the 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 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 ourseparate report in

Annexure "B";

(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 31(A)(f) (g) (h) (i) and (j) tothe financial statements; (ii) The Company did not have any long-term contracts includingderivative contracts 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 Ajay Shobha & Co.
Chartered Accountants
Firm Reg. No. 317031E
Ajaykumar Gupta
Place : Mumbai Partner
Date : 27th May 2016 Mem. No. : 53071

ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT

The Annexure A referred to in Paragraph 1 under the heading "Report on Other Legaland Regulatory Requirements "in our Independent Auditor’s Report to the membersof Provogue (India) Limited for the year ended 31st March 2016.

As required by the Companies (Auditors Report) Order 2016 and according to theinformation and explanations given to us during the course of the audit and on the basisof such checks of the books and records as were considered appropriate we report that:

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

b) The Fixed Assets have been physically verified by the management during the year atreasonable intervals. In our opinion the frequency of verification is reasonable havingregard to the size of the Company and the nature of its assets. No discrepancies have beennoticed on such physical verification.

c) According to the information and explanations given to us and on the basis of ourexamination of records of the Company the title deeds of immovable properties are held inthe name of the Company.

(ii) The inventories have been physically verified by the management during the year atreasonable intervals. No material discrepancies were noticed on physical verification ofinventory by the management.

(iii) The company has granted unsecured loans to companies covered in the registermaintained under section 189 of the Companies Act 2013.

a) The said loans are interest free and the other terms and conditions of the grant ofsuch loans were not prima facie prejudicial to the company’s interest;

b) The terms of arrangements do not stipulate any repayment schedule and the loans arerepayable on demand. Accordingly paragraph 3(iii)(b) of the Order is not applicable tothe Company in respect of repayment of the principal amount; c) There are no overdueamounts in respect of such loans

(iv) The Company has not granted any loans or provided any guarantees or security tothe parties covered under the Section 185 of the Act. With regards to investments insecurities and loans provided to other body corporates after enforcement of section 186 ofthe Act the Company has complied with the provisions of section 186 of the Act.

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

(vi) The Central Government has prescribed the maintenance of cost record under Section148(1) of the Act. We have not reviewed the cost records maintained by the Company butbased on the information submitted by the Company we are of the view that such accountsand records have been made and duly maintained.

(vii) a) Accordingly to the records of the Company the undisputed statutory duesincluding Provident Fund Employees’ State Insurance Income Tax Sales Tax ServiceTax Duty of Custom Duty of Excise Value Added Tax Cess and other statutory dues tothe extent applicable have not been regularly deposited with the appropriate authorities.There are no undisputed amount payable in respect of such statutory dues which haveremained outstanding as at 31st March 2016 for a period more than six months from thedate they became payable except Tax Deducted at Source of Rs. 79.45 Lacs Service Tax ofRs. 4.48 Lacs Local Body Tax of Rs. 1.69 Lacs and Value Added Tax of Rs. 3.98 Lacs andSales Tax of Rs. 1.97 Lacs. b) According to the records of the Company Income Tax SalesTax Service Tax Duty of Custom Duty of Excise Value Added Tax which have not beendeposited on account of any dispute with the relevant authorities are given below:

Name of Statute Amount (Rs. in Lacs) Period to which amount relates Forum where dispute is pending
Sales Tax 100.48 2005-06 to 2011- 12 Deputy / Joint Commissioner –Appeals
Income Tax 600.96 2006-07 to 2012- 13 ITAT (Appeals)

(viii) During the year the Company has defaulted in the repayment loans or borrowingto bank. As referred to note 31(J) to financial statements the Joint Lender’s Forum(JLF) had invoked Strategic Debt Restructuring (SDR) invoked under extant RBI guidelinesw.e.f. January 25 2016.

Accordingly the period and the amount of default in repayment of loans or borrowing tobank has been reported up to January 25 2016 as follows :

Particulars Delays Overdue
0-30Days 31-60Days 61-90Days
Bank of India 191.73 526.45 1027.67 494.48
Andhra Bank 7928.42 319.29 195.67 70.61
Corporation Bank 5552.25 394.47 - 61.61
Central Bank of India 1881.41 515.51 264.56 108.95
Punjab National Bank 193.06 185.49 35.19 75.41
Indusind Bank 219.97 14.81 7.01 -
15966.84 1956.02 1530.10 811.06

The company does not have any loans or borrowing from financial institution orGovernment and has not issued any debentures.

(ix) The company did not raise money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year.

(x) According to the information & explanations given to us no fraud by thecompany or on the company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanation given 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 mandate by the provision ofsection 197 read with schedule V of the Act.

(xii) 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.

(xiii) According to the information and explanation given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with of section 177 and 188 of the Act where applicable. The details of suchrelated party transactions have been disclosed in the financial statements as requiredunder Accounting Standard (AS) 18 Related Party Disclosures specified under section 133of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.

(xiv) 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.

(xv) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with the directors or persons connected with him. Accordingly paragraph 3(xv) of the Order is not applicable.

(xvi) In our opinion and according to the information and explanation given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For Ajay Shobha & Co.
Chartered Accountants
Firm Reg. No. 317031E
Ajaykumar Gupta
Place : Mumbai Partner
Date : 27th May 2016 Mem. No. : 53071

ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT

Annexure "B" to the Independent Auditor’s Report of even date on theStandalone financial statements of Provogue (India) Limited for the year ended 31st March2016

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 Provogue(India) Limited ("the Company") as of March 31 2016 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

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 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.

Auditors’ 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 Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls 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 controlssystem over 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 financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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.

Qualified Opinion

According to the information and explanation given to us and based on our audit thefollowing material weakness has been identified in the operating effectiveness of theCompany’s internal financial controls over financial reporting as at 31st March 2016:

The documentation in respect of specific policies and procedures including inventoriesand the IT Controls pertaining to internal financial controls over financial reporting arenot adequate and needs to be further strengthened. This may potentially result in the riskof overriding of these controls and misstatement in recording of transaction.

A "material weakness" is a deficiency or a combination of deficiencies ininternal control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the Company’s annual or interim financial statementswill not be prevented or detected on a timely basis.

In our opinion except for the possible effect of the material weakness described aboveon the achievement of the objectives of the control Criteria the Company has maintained in all material respects an adequate internal financial controls system over financialreporting and such internal financial controls over financial reporting were operatingeffectively as at March 31 2016 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and audit tests applied in our audit of the financial statements of theCompany and these material weaknesses above does not affect our opinion on the financialstatements of the Company.

For Ajay Shobha & Co.
Chartered Accountants
Firm Reg. No. 317031E
Ajaykumar Gupta
Place : Mumbai Partner
Date : 27th May 2016 Mem. No. : 53071