To the Members of Salora International Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of SALORAINTERNATIONAL LIMITED. (the "Company") which comprise the Balance Sheet as atMarch 31 2017 the Statement of Profit and Loss and the Cash Flow Statement for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation.
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 preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the company and for preventing and detecting frauds and other irregularitiesselection and application of appropriate accounting policies making judgments andestimates that are reasonable and prudent and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due 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 accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions 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 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 circumstancesbut not for the purpose of expressing an opinion on whether the company has in place anadequate internal financial controls system over financial reporting and the operatingeffectiveness of such controls of the entity's internal control. 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 sufficientand 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 31st March 2017 and its loss 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 by the Central Government of India in exercise of powers conferred by sub-section11 of section 143 of the Act we give in the "Annexure A" attached hereto ourcomments on the matters specified in the paragraphs 3 and 4 of the said Order.
2. As required by sub-section 3 of Section 143 of the Act we report that: (a) We havesought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. (b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books
(c) The Balance Sheet the Statement of Profit and the 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 (Account) Rules 2014.
(e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms section164 (2) of the Companies Act 2013.
(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 matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us: i. The Company has disclosed the impact of pendinglitigations on its financial position in its financial statements- Refer Note 35 to thefinancial statements. ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses. iii. There hasbeen no delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund by the Company. iv. The Company has provided requisitedisclosures in its financial statements as to holdings as well as dealings in SpecifiedBank Notes during the period from 8 November 2016 to 30 December 2016 and these are inaccordance with the books of accounts maintained by the Company refer
Note 17 to the financial statements.
| ||For K. Prasad & Company |
| ||Chartered Accountants |
| ||FRN 002755N |
| ||R.S. Gupta |
|Place: New Delhi ||Partner |
|Date-: 29th May 2017 ||M.No: 072666 |
THE ANNEXURE A REFERRED TO IN INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THECOMPANY ON THE STANDALONE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2017 WEREPORT THAT:
1. a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. b. Major fixed assets have beenphysically verified by the management during the year. As explained to us nodiscrepancies were noticed on such verification. c. According to the information andexplanation given to us and on the basis of our examination of the records of the Companythe title deeds of immovable properties are held in the name of the company except thefollowing Lease hold land at D-13/4 Okhla Industrial Area Phase
II is in the Company's old name.
2. Inventories has been physically verified by the management during the year exceptservice spares and goods/ material in bond transit or with third party. In our opinionthe frequency of physical verification is reasonable.
3. According to the information and explanation given to us the Company's has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties listed in the register maintained under section 189 of theCompanies Act 2013 and hence sub clause (a) (b) (c) are not applicable.
4. According to the information and explanation given to us In respect of loansinvestments guarantees and security the provisions of section 185 and 186 of theCompanies Act 2013 have been complied with.
5. The company has not accepted any deposits from the public in accordance with theprovisions of sections 73 to 76 of the Act and the Rules framed there under.
6. We have broadly reviewed the books of account maintained by the company pursuant tothe Rules made by the Central Government of India maintenance of cost records has beenprescribed under sub section (1) of section 148 of the Companies Act 2013 and are of theopinion that prima facie the prescribed accounts and records are being made andmaintained.
7. a. According to the records of the Company and information and explanations given tous Provident Fund Employees State Insurance Income Tax Sales Tax Custom Duty CessExcise Duty Service Tax Value added tax and other material statutory dues have beendeposited regularly during the period with the appropriate authorities. According to therecords of the Company and information and explanations given to us there were no arrearsof outstanding statutory dues as at 31st March 2017 for a period of more than six monthsfrom the date they became payable.
|Name of the Statute ||Nature of the dues ||Dispute Amount (Rs / Lacs ) ||Amount Deposited (Rs /Lacs ) ||Amount not Deposited (Rs /Lacs ) ||Period to which the amount relates to various years covering the period ||Forum where pending |
|Income Tax Act 1961 ||Income Tax ||37.88 ||37.88 ||0 ||2002-2003 ||Appellate Authority - High Court |
| ||Income Tax ||7.12 ||2.55 ||4.57 ||2009-2010 ||Appellate Authority - CIT (A) |
|Sales Tax Law ||Sales Tax ||42.21 ||16.18 ||26.03 ||2001-2004 ||Appellate Authority - Supreme Court |
| ||Sales Tax ||36.81 ||7.70 ||29.11 ||1995-2002 ||Appellate Authority - High Court |
| ||Sales Tax ||914.99 ||173.66 ||741.33 ||2000-2012 ||Appellate Authority - Sales Tax Commissioner |
|Finance Act 1994 ||Service Tax on Royalty ||1.97 ||0 ||1.97 ||2002-2003 ||Appellate Authority - Excise Commissioner |
|Custom Act 1962 ||Custom Duty ||Not ascertained ||20 ||0 ||1994-1995 ||Appellate Authority Tribunal |
| ||Custom Duty ||20.14 ||20.14 ||0 ||2015-16 ||Commissioner |
|Central Excise Act ||Excise Duty ||2435.21 ||300.00 ||2135.21 ||1993-1994 to 2003-2004 ||Appellate Authority Tribunal |
|1944 ||Excise Duty ||41.97 ||0 ||41.97 ||2001-2004 ||Assistant Commissioner |
| ||Excise Duty ||47.26 ||4.20 ||43.06 ||2009-2011 ||Appellate Authority Tribunal |
| ||Excise Duty ||7.66 ||7.66 ||0 ||2006-2007 ||Assistant Commissioner |
| ||Excise Duty ||1.78 ||2.00 ||0 ||1995-1996 ||Commissioner |
| ||Excise Duty ||0.17 ||0.17 ||0 ||2010-2011 ||Assistant Commissioner |
| ||Penalty ||2435.22 ||0 ||2435.22 ||1993-1994 to 2003-2004 ||Appellate Authority Tribunal |
b. According to the records of the Company and information and explanations given to usthe following are the particulars of disputed amounts payable in respect of Income taxSales Tax Custom Duty Excise Duty and Service tax as at the last day of the periodending 31st March 2017 are as follows.
8. According to the information and explanation given to us by the management theCompany has not defaulted in the repayment of dues to banks. The company did not have anydebenture holders during the year.
9. Term loans were applied for the purpose for which they were raised. The company hasnot raised any money by way of Initial public offer or further public offer (Includingdebt instrument) during the year.
10. To be best of our knowledge and according to the information and explanations givento us we have neither come across any instance of fraud on or by the Company itsofficers or employees noticed or reported during the year nor have we been informed ofsuch case by the management.
11. According to the information and explanation given to us and to best of ourknowledge we are of the opinion that the managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act.
12. According to the information and explanation given to us the provisions of anySpecial Statute applicable to Nidhi Companies are not applicable to the Company so theprovision of this clause is not applicable to the Company. 13. According to theinformation and explanation given to us and based on our examination of the records allthe transactions with related parties are in compliance with section 177 and 188 of theCompanies Act 2013 and all the details have been disclosed in the financial statements asper Accounting
14. According to the information and explanation given to us and to the best of ourknowledge the Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the period under review.
15. According to the information and explanation given to us and to the best of ourknowledge the Company has not entered into any non-cash transactions during the periodwith directors or persons connected with him.
16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For K. PRASAD & COMPANY |
| ||CHARTERED ACCOUNTANTS |
| ||FRN: 002755N |
|Place : New Delhi. ||(R. S. GUPTA) |
|Date : 29th May 2017. ||PARTNER. |
| ||Membership No.: 072666 |
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF SALORA INTERNATIONAL LIMITED.
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of SALORAINTERNATIONAL LIMITED ("the Company") as of March 31 2017 in conjunction withour audit 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 isresponsible for establishing and maintaining internal financial controls based on"the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute ofChartered Accountants of India ("ICAI") These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 deemedto be prescribed under section 143(10) of the Companies
Act 2013 to the extent applicable to an audit of internal financial controls bothapplicable to an audit of Internal Financial Controls and both issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about 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 theadequacy of the internal financial controls system over financial reporting and theiroperating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficientand 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 a process designed toprovide 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 years are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree 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 K. PRASAD & COMPANY |
| ||CHARTERED ACCOUNTANTS |
| ||FRN: 002755N |
|Place : New Delhi. ||(R. S. GUPTA) |
|Date : 29th May 2017. ||PARTNER. |
| ||Membership No.: 072666 |