To the members of
AURANGABAD DISTILLERY LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of AURANGABAD DISTILLERY LIMITED.(''the Company ) which comprise the balance sheet as at 31st March 2017 the statement ofprofit and loss and Cash flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's board of directors is responsible for the matters stated in sec 134(5) ofthe Company Act 2013 with respect to the preparation and presentation of these financialstatements that give a true and fair view of the financial position financial performanceand cash flows of the Company in accordance with the Accounting Principles generallyaccepted in India including the accounting Standards Specified under Section 133 of theact read with rule 7 of the Companies(Accounts) rules 2014. This responsibility alsoincludes maintenance of the adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Comany and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making jugdements and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of accounting recordsrelevant to the preparation and presentation of the financial reporting framework thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accouting 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 accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders 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 controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the 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 financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner 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 2017 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 (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Orderto the extent available.
2 As required by Section 143(3) of the Act we report that: a. We have sought obtainedall the information and explanations which to the best of our knowledge and belief werenecessary for the purpose of our audit; b. In our opinion proper books of account asrequired by law have been kept by the Company so far as it appears from our examination ofthose books; c. The Company does not have any branch office and accodingly Section 143 (8)of the Act does not apply. d. The balance sheet and statement of profit and loss and theCash Flow Statement dealt with by this Report are in agreement with the books of account;e. In our opinion the balance sheet statement of profit and loss and cash flow statementcomply with the Accounting Standards specified under Section 113 of the Act read withRule 7 of the Companies (Accounts) Rules 2014; and f. In our opinion no financialtransactions or matters have any adverse effect on the functioning of the Company. g. Onthe basis of the written representations received from the directors as on 31 March 2017and taken on record by the Board of Directors none of the directors is disqualified as on31 March 2017 from being appointed as a director in terms of Section 164 (2) of the Actand h. In our opinion no qualification reservation or adverse remark relating to themaintenance of accounts and other matters connected therewith; i. With respect to theadequacy of the internal financial controls over financial reporting of the Company andthe operating effectiveness of such controls refer to our separate report in 'Annexure B'j. With respect to the others matters to be included in the auditors report in accordancewith rule 11 of the companies(audit and auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:
1] The Company does not have any pending litigations which would impact its financialposition
2] The company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable Losses.
3] Since there are no amounts liable to be transferred to the Investor Education andProtection Fund by the Company the clause 11 (c) of Chapter X of the Companies (Audit andAuditors) Rules 2014 is not applicable.
For Natesh & Associates
Chartered Accountants FRN 106957W
Ramamurthi Natesh Proprietor M. NO. 036481 Place : Walchandnagar Date : 30th May 2017
Annexure ''A'' to the Auditor's Report
The Annexure referred to in our Independent Auditors Report to the members of thecompany on the financial Statements for the year ended 31 March 2017 we report that :
1.In respect of its Fixed Assets : a) The Company is maintaining proper records showingfull particulars including quantitative details and situation of fixed assets.
b) As explained to us all the fixed assets have been physically verified during theyear by the management in accordance with a regular programme of verification of fixedassets at reasonable intervals which in our opinion is reasonable having regard to thesize of the company and the nature of its assets.According to the information andexplanation given to us no material discrepancies were noticed on such physicalverification. c) According to the information and explanation given to us and on the basisof our examination of records of the company the title deeds of immovable properties areheld in the name of company.
2.In respect of its Inventories : a) The inventory has been physically verified by themanagement during the year at reasonable interval. In respect of inventory lying withthird parties these substancially been confirmed by them. In our opinion the frequencyof verification is reasonable. b) In our opinion the procedure of physical verification ofinventory followed by management are reasonable and adequate in relation to the size ofthe company and nature of its business. c) On the basis of our examination of inventoryrecordsin our opinionthe company is maintaining proper records of inventory.As explainedto usthere were no material discrepancies noticed on physical verification.
3. As per information given to us the company has not granted any loans to partiescovered in the register maintained under Section 189 of the Companies Act 2013 (the Act)Accordingly para 3(iii) of the Order is not applicable.
4. In our opinion and according to the information and explanation given to us theCompany has complied with the provisions of section 185 and 186 of the Act in respect ofloans and investments made.
5 In our opinion and according to information and explanations given to usthe companyhas not accepted deposits from the public during the year.Therefore the provisions ofclause (v) of paragraph 3 of the order is not applicable to the company.
6. As per paragraph 3(vi) of the order the maintenance of cost records under Section148(1) of the Companies Act 2013 are prescribed by the Central Government vide Rule 3 ofthe Companies (Cost Records and Audit) Rules 2014 however the company has not producedcost audit report for our verification.
7. a) According to information and explanations given to us and the records of thecompany examined by us in our opinion the company is regular in depositing the undisputedstatutory dues including Income Tax Profession Tax dues Provident Fund Sales TaxService Tax Duty of customs Duty of excise Cess and other statutory dues with theappropriate authorities.
According to information given to us their are no arrears of outstanding statutory duesas applicable with the appropriate authorities. b) According to information andexplanations given to us and the records of the company examined by us there are no duesof wealth tax service tax custom duty and cess which have not been deposited onaccount of any dispute.
8. In our opinion and according to the information and explanations given to us thecompany has not defaulted in repayment of dues to a financial institution bankGovernment during the year.
9. In our opinion and according to the information and explanations given to us thecompany has raised money amounting to Rs.7.70 crores (being 22 lakhs equity shares havingface value Rs.10/- per share issued at price of Rs.35/- per share ) by the way of intialpublic offer.In addition the company has raised Term Loan amounting to 8.92 crores duringthe year from HDFC Bank Ltd.
10. During the course of our examination of the books and records of thecompanycarried out in accordance with the generally accepted auditing practices in Indiaand according to the information and explanations given to us no material instance offraud on or by the company noticed or reported during the year.
11. According to the information and explanation given to us the company haspaid/provided managerial remuneration in accordance with requisite approvals mandated byprovisions of section 197 read with Schedule V of the companies act 2013.
12. According to the information and explanation given to us the company is not anidhi company . Accordingly para 3(xii) of the Order is not applicable.
13. According to the information and explanation given to us based on our examinationof the records of the Company transactions with the related parties are in compliancewith the sections 177 and 188 of the Act where applicable and details of such transactionshave been disclosed in the financial statements as required by the applicable accountingstandards.
14. According to the information and explanation given to us based on our examinationof the records of the Company the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures and hence reportingunder clause (xiv) of the order is not applicable to the company.
15. According to the information and explanation given to us based on our examinationof the records of the Company the company has not entered into non-cash transactions withdirectors or persons connected with them. Accordingly para 3(xv) of the Order is notapplicable.
16. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For Natesh & Associates
Chartered Accountants FRN 106957W
Ramamurthi Natesh Proprietor M. No. 036481 Place : Walchandnagar Date: 30th May 2017
Annexure ''B'' to the Independent Auditor's Report:
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of Companies Act 2013 ('the Act')
We have audited the internal financial controls over financial reporting of AurangabadDistillery Ltd. ('the Company') as of 31st March 2017 in conjuction with our audit of thestandalone financial statements of the Company for the year ended on that 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 (ICAI). These responsibilitiesinclude the design implementation and maintainence of adequate internal financialcontrols that were operating effectively for ensuring the orderly and efficient conduct ofthe business including adherence to the Company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the 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 deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of CharteredAccountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were 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 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 auditors' 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 controls systemover 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 authorizations of theManagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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.
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 31 March 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 Natesh & Associates
Proprietor M. No. 036481
Place : Walchandnagar
Date: 30th May 2017