The Members of
BHANDARI HOSIERY EXPORTS LIMITED LUDHIANA.
Report on the Financial Statement
We have audited the accompanying Ind AS financial statements of BHANDARI HOSIERYEXPORTS LIMITED ("the company") which comprise the Balance Sheet as at 31stMarch 2020 the Statement of Profit and Loss including other comprehensive income theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act
2013 as amended ("the Act") in the manner so required and give a true andfair view in conformity with accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2020 its profit includingother comprehensive income its cash flows and the changes in equity for the year ended onthat 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 theFinancial Statements section of our report. We are independent of the Company inaccordance 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 thefinancial statements 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
We draw attention to Note No.2.3(C) to the Ind AS financial statements which describesthe uncertainties and the impact of Covid-19 pandemic on the Company's operations andresults as assessed by the management. The actual results may differ from such estimatesdepending on future developments. Our opinion is not modified in respect of this matter.
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and Analysis.
Board's Report including Annexures to Board's Report Business Responsibility ReportCorporate Governance and Shareholder's information but does not include the Ind ASfinancial statements and our Auditor's Report thereon.
Our opinion on Ind AS financial statements does not cover other information and we donot express any form of assurance conclusion thereon.
Management's Responsibility for the Financial Statement
The Company's Board of Directors is responsible for the matters in section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding of the assets of the Company and forpreventing and detecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial control thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the 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 todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the financialstatements.
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.
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 sub-section (11) of section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.
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 accounts as required by law have been kept by theCompany so far as it appears from our examination of those books;
(c) the Balance Sheet Statement of Profit and Loss including other comprehensiveincome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of accounts;
(d) in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;
(e) on the basis of written representation received from the directors as on March 31st2020 taken on record by the Board of Directors none of the directors is disqualified ason March 31st 2020 from being appointed as a director in terms of Section164(2) of the Act;
(f) with respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Ind AS financial statements and theoperating effectiveness of such controls refer to our separate Report in Annexure 2 tothis report.
(g) In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act.
(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 if any.
ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses; iii. There has been no delay intransferring amounts required to be transferred if any to the Investor Education andProtection Fund by the Company.
The Annexure 1 of the Independent Auditor's Report of even date on the financialstatements of BHANDARI HOSIERY EXPORTS LIMITED
Report on the Companies (Auditor's Report) Order 2016 (the Order's) under subsection(11) of section 143 of the Act
On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of our audit we report that:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of the fixed assets atreasonable intervals. In accordance with this programme certain fixed assets wereverified during the year and no material discrepancies were noticed on suchverification.
(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the Company.
2. The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.
3. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under Section 189 of the Companies Act2013. Accordingly the provisions of clause 3 (iii) (a) (b) (c) of the Order are notapplicable to the Company and hence not commented upon.
4. According to the information and explanations given to us there are no loansinvestments guarantees and securities given in respect of which provision under Section185 and 186 of the Companies Act 2013. Therefore the provision of clause 3(iv) is notapplicable to the Company.
5. The Company has not accepted any deposits from the public. Therefore the provisionsof Clause 3(v) of the order is not applicable to the Company.
6. We have broadly reviewed the books of accounts maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148(1) of the Companies Act 2013 related to the manufacture of products and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of the same.
7. (a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositing theundisputed statutory dues including provident fund employees' state insurance incometax customs duty cess Goods and Service Tax and other statutory dues with theappropriate authorities.
(b) According to the information and explanations given to us and the records of theCompany examined by us there are no undisputed amounts outstanding of provident fundemployees state insurance income-tax cess customs duty Goods and Service Tax.
8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to banks. The company has raised loans fromthe banks. The Company has not taken any loan either from financial institution or fromthe government.
9. According to the information and explanations given to us the Company has notraised any money by way of initial public offer or further public offer (Including Debtinstruments). Accordingly the provision of clause 3(ix) of the Order are not applicable tothe Company. The company has raised term loans from banks for installation of themachinery.
10. Based on the audit procedure performed for purpose of reporting the true and fairview of the Ind AS financial statement and according to the information and explanationgiven by the management we report that no fraud by the Company or no material fraud onthe company by officers and employees of the company has been noticed or reported duringthe year.
11. According to the information and explanation given by the management themanagerial remuneration has been paid / provided in accordance with the recognistappraisal mandated by the provisions of the section 197 read with Schedule V of theCompanies Act 2013.
12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore the provision of clause 3(xii) is notapplicable to the Company.
13. According to the information and explanation given by the management the Company'stransactions with its related parties are in compliance with Sections 177 and 188 of theCompanies Act 2013 where applicable and the details have been disclosed in the Notes toFinancial Statements as required by the applicable accounting standards.
14. According to the information and explanation given to us and on an overallexamination of balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or party convertible debentures during the year underreview and hence reporting requirement under clause 3(xiv) are not applicable to thecompany and hence no commented upon.
15. According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him asreferred to in section 192 of the Companies Act 2013.
16. According to the information and explanations given to us the provision of thesection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.
Annexure 2 to the Auditor's Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of BHANDARIHOSIERY EXPORTS LIMITED ("the Company") as of 31st March 2020in conjunction with our audit of the financial statements of the Company for the yearended 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"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as 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 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 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 Control 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 31st March 2020based 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.
We also have audited in accordance with the Indian Accounting Standards issued by theInstitute of Chartered Accountants of India as specified under section 143(10) of theAct the financial statements of Company which comprise in the Balance Sheet as at March31 2020 and the related statement of Profit and Loss and Cash Flow Statement for theyear then ended and a summary of significant accounting policies and other explanatoryinformation and our report dated 30.06.2020 expressed an unqualified opinion thereon.
| ||For KRISHAN GOEL & ASSOCIATES |
| ||CHARTERED ACCOUNTANTS |
| ||Sd/- |
|PLACE : LUDHIANA ||(MANOJ JAIN) |
|DATE : 30.06.2020 ||PARTNER |
| ||M.NO.091621 |
| ||UDIN : 20091621AAAABM5795 |