To the Members of
AARVEE DENIMS & EXPORTS LIMITED
Report on the Standalone financial statements Opinion
We have audited the accompanying standalone financial statements of AARVEE DENIMS& EXORTS LIMITED ('the Company") which comprise the balance sheet asat March 31 2020 and the statement of profit and loss (including other comprehensiveincome) statement of changes in equity and statement of cash flows for the year thenended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information (Collectively referredto as 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 Companies Act 2013 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2020 and its loss (including other comprehensiveincome) changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone financial statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
Attention is invited to note no: 51 of the audited standalone financial statementsregarding continuing recognisitation of MAT Credit as at 31st March 2020. Auditors arerelied upon and accepted the estimates and judgments made in this regard by the company.is invited to note no: 52 of the audited standalone financial statements regardinginventory as at Attention 31st March 2020. The company has applied roll back procedureson physical verification carried out after the year end to arrive at the physical statusof year-end inventory. We have applied alternate audit procedures and have relied upon thesystem/procedures applied in arriving year-end inventory on hand by the management.
We draw attention to note no: 53 of the audited standalone financial statements asregards the management's evaluation of COVID-19 impact on the future performance of theCompany.
Our opinion is not modified in respect of these matters.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
We have determined that there are no key audit matters to communicate in our report.
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the annual report but does not includethe standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial information and in doing soconsider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bemisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Responsibilitiesof Management and Those Charged with Governance for the StandaloneFinancial 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 (including other comprehensive changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards specified responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financial
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis standalone financial statements.
As part of an audit in accordance with Standards on Auditing (SAs') we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls the reasonableness Evaluate the of accounting appropriateness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such to modify our opinion. Our conclusions arebased on the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the standalone financialthe disclosures and whether the standalone financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
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 a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
2. As requited by Section 143(3) of the Act we report that: a. We have sought andobtained all the information and explanations which to the best of our knowledge andbelief 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 Sheetthe Statement of Profit and Loss the Statement of Changes in Equity and the
Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount. d. In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards prescribed under Section 133 of the Act read with Companies(Indian Accounting Standard) Rules 2016. e. On the basis of the written representationsreceived from the directors as on March 31 2020 taken on record by the Board ofDirectors none of the directors is disqualified as on March 31 2020 from being appointedas a director in terms of Section 164(2) of the Act. f. With respect to the adequacy ofthe internal financial the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B". g. With respect to the other matters tobe included in the Auditor's report in accordance with the requirements of section 197(16)of the Act as amended in our opinion the managerial remuneration for the year endedMarch 31 2020 has been paid/ provided by the Company to its directors in accordance withthe provisions of Section 197 read with Schedule V to the Act; h. With respect to theother matters to be included in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us: i. The Company does not haveany pending litigations 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 Investor
Education and Protection Fund by the Company.
For SHAH & SHAH ASSOCIATES
Membership Number: 047236
Place : Ahmedabad Date : 28.07.2020
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report of even date on Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act
1. In respect of its fixed assets:
a) The company has maintained proper records showing full particulars includingquantitative details fi. andsituation of
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) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company and based on the examinations of the registeredsale deed/transfer deed provided to us we report that the title deeds comprising allthe immovable properties of land and buildings are held in the name of the Company as atbalance sheet date. Immovable properties of land and buildings whose title deeds have beenheld in the name of the Company based on confirmations received from landers. In respectof immovable properties of land and buildings that have been taken asset in the standalonefinancial statements the lease agreements where the company is the lessee in theagreement.
2. As explained to us physical verification of the inventories have been conducted atreasonable intervals by the management which in our opinion is reasonable having regardto the size of the Company and nature of its inventories. The discrepancies noticedonphysical verification during the year have been properly dealt with in the books ofaccounts.
3. The company has not granted any loans secured or unsecured to companies FirmsLimited Liability Partnership or other parties covered in the register maintained undersection 189 of the Act. Accordingly the provisions of clause 3 (iii) (a) to (c) of theOrder are not applicable to the Company.
4. In our opinion and according to the information and with the provisions of Section185 and 186 of the Act with respect to the investments made. Further during the yearunder review the company has not granted any loans or provide guarantees.
5. According to the information and explanations given to us the company has compliedwith the provisions of Sections 73 to 76 or any other relevant (Acceptance of Deposit)Rules 2014(as amended). According to the information and explanations given to us noorder has been passed by the Company Law Board or the National Company Law Tribunal or TheReserve Bank of India or any Court or any other Tribunal.
6. In respect of business the Central Government under sub-section (1) of section 148of the Companies Act 2013. We have broadly reviewed the cost records maintained by theCompany and are of the opinion that prima facie the prescribed accounts and cost recordshave been maintained. We have however not made detailed to determining examinationswhetherofthey are accurate or complete.
7. a) As per information and explanations given to us the company is regular indepositing undisputed statutory dues including provident fund employees' state insuranceincome tax sales-tax wealth tax service tax goods and service tax duty of customsduty of excise value added tax cess and anyotherstatutorydueswiththeappropriateauthorities. b) There are no outstanding statutorydues as at the last day of the financial year under audit for a period of more than sixmonths from the date they became payable.
to us c) there are no dues of sales tax incomeAccordingtotheinformationandexplanation tax custom duty wealth tax service tax goodsand service tax excise duty and cess which have not been deposited on account of anydispute except for the following:
|Statute ||Nature of Dues ||Forum where Dispute is pending ||Period to which the amount relates ||Amount involved (Rs. in Lakhs) ||Amount Unpaid (Rs. In Lakhs) |
|Income Tax Act1961 ||Income Tax ||Commissioner of Income Tax (Appeal) ||2011-12 ||19.45 ||19.45 |
|Income Tax Act1961 ||Income Tax ||Commissioner of Income Tax (Appeal) ||2010-11 ||5.36 ||5.36 |
8. Based on our audit procedures and as per the informationand explanations given bythe management the company has not defaulted in repayment of loans or borrowings frombanks financial institution. Further during the year under review the company has notissued debentures; hence the question of reporting for default in repayment of debenturesdoes not arise.
9. The company has not raised money by way of initial public offer or further publicoffer including debt instruments. In our opinion and accordingly to the information andexplanations given to us money raised by way of term loans have been applied by thecompany during the year for the purposes for which they were raised. However as explainedto us the company has obtained loans from companies which have been utilised for thepurpose for which the same have been obtained.
10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the company and no material fraud on the company by its officersor employees has been noticed or reported during the year under review.
11. In our opinion and according to the information and explanation given to usmanagerial remuneration has been paid /provided in accordance with the requisite approvalsmandated by the provisions of
Section 197 read with Schedule V to the Act.
12. The Company is not a Nidhi Company. Therefore the provisions of clause 3(xii) ofthe Order are not applicable to the Company.
13. The Company has entered in to transactions with related parties in compliance withSections 177 and 188 of Act. The details of such related party transactions have beendisclosed in the standalone Ind AS financial statements as required under AccountingStandard (AS) 24 Related Party Disclosures specified under Section 133 ofthe read withRule 7 of the Companies (Accounts) Rules 2014. Act 14. The company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the period under review. Accordingly the provisions of clause 3(xiv) ofthe Order are not applicable to the company.
15. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3(xv) ofthe Order are not applicable to the company.
16. The company is not required to be registered under section 45-IA of the Reserve
For SHAH & SHAH ASSOCIATES
Membership Number: 047236
Place : Ahmedabad Date : 28.07.2020
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2(f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of AARVEEDENIMS & EXPORTS LIMITED ("the Company") as of March 31 2020 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.
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 responsibilitiesincludethe 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 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 of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal their operating effectiveness. Our audit of internalfinancialcontrolssystemoverfinancialreporting financialcontrolsoverfinancialreporting 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 judgement including the assessment of the risks of materialmisstatement of the standalone 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 controls systemover financial reporting
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reportingis a process designed toprovide reasonable assurance regarding the reliability of financial reporting and thepreparation of standalone 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 standalonefinancial accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition assets that could have a material effect onthe standalone financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financialreporting includingthecontrolsover possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods 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 to the best of our informationand according to the explanations givento us the Company has in allmaterialrespects financialcontrols system overfinancial reporting and such adequateinternal internal financial controls over financialreporting were operating effectively as at March 31 2020 based on reporting establishedby the Company considering the thecriteriaforinternalfinancialcontroloverfinancialessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issuedby the Institute of CharteredAccountants of India.
For SHAH & SHAH ASSOCIATES
Membership Number: 047236
Place : Ahmedabad
Date : 28.07.2020