TO THE MEMBERS OF BLACK ROSE INDUSTRIES LIMITED
We have audited the Separate financial statements (also known as Standalone FinancialStatements) of BLACK ROSE INDUSTRIES LIMITED ("the Company") whichcomprise the Balance Sheet as at 31st March 2019 the Statement of Profit and Loss(including other Comprehensive Income) Statement of Changes in Equity and Statement ofCash Flows for the year then ended and a summary of significant accounting policies andother explanatory information.
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 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards (Ind AS) prescribed underSection 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015 andamended and other accounting principles generally accepted in India of the state ofaffairs (financial position) of the Company as at 31st March 2019 and its profit(financial performance including other comprehensive income) the changes in equity andits cash flows for the year ended on that date.
2. Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Standalone Financial Statements section of our report. We are independent ofthe Company in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the independence requirements that are relevantto our audit of the Standalone financial statements under the provisions of the Act andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics.
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.
3. Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
|Key Audit Matter ||Our Response |
|1 Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) ||Principal Audit Procedures |
|The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations effect of variable considerations and the appropriateness of the basis used to recognise revenue at a point in time or over a period of time. ||We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. |
| ||Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: |
| ||Evaluated the design of internal controls relating to implementation of the new revenue accounting standard. |
| ||Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation re- performance and inspection of evidence in respect of operation of these controls. |
| ||Tested the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard. |
| ||Our procedures did not identify any material exceptions. |
|2 Defined benefit obligation ||We have examined the key controls over the process involving member data formulation of assumptions and the financial reporting process in arriving at the provision for retirement benefits. We tested the controls for determining the actuarial assumptions and the approval of those assumptions by senior management. We found these key controls were designed implemented and operated effectively and therefore determined that we could place reliance on these key controls for the purposes of our audit. We tested the employee data used in calculating the obligation and where material we also considered the treatment of curtailments settlements past service costs remeasurements benefits paid and any other amendments made to obligations during the year. From the evidence obtained we found the data and assumptions used by management in the actuarial valuations for retirement benefit obligations to be appropriate. |
|The valuation of the retirement benefit schemes in the Company is determined with reference to various actuarial assumptions including discount rate future salary increases rate of inflation mortality rates and attrition rates. Due to the size of these schemes small changes in these assumptions can have a material impact on the estimated defined benefit obligation || |
4. Information Other than the Standalone financial statements and Auditor'sReport thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report Management Discussion and Analysis Reporton Corporate Governance Business Responsibility Report but does not include theStandalone 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 statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information; we are required to report that fact.
We have nothing to report in this regard.
5. 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 Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows of the Company in accordance with the Ind AS and other accountingprinciples generally accepted in India. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; 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 statements that give a true andfair view and are free from material misstatement whether due to fraud or error. Inpreparing the Standalone financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. The Board of Directors are responsible for overseeing theCompany's financial reporting process.
6. Auditor's Responsibility 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 canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting 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 Standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained upto the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the Standalonefinancial statements including the disclosures and whether the Standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the Standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.
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 precludes public disclosure about thematter or when 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.
7. Report on Other Legal and Regulatory Requirements
7.1 As required by the Companies (Auditor's Report) Order 2016("the Order")issued by the Central Government in terms of Section 143 (11) of the Act we give in"Annexure A" - a statement on the matters specified in paragraphs 3 and 4 of theOrder.
7.2 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 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 including other comprehensiveincome Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards prescribed under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 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 and the operating effectiveness of such controls refer to ourseparate Report in Annexure B".
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended.
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of Section 197 of 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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company does not have any pending litigations which would have impact on itsfinancial position;
ii. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses; and
iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the company.
BLACK ROSE INDUSTRIES LIMITED
ANNEXURE-A TO INDEPENDENT AUDITOR'S REPORT
The Annexure referred to in paragraph 1 under the Report on Other Legal andRegulatory Requirements' our report to the members of BLACK ROSE INDUSTRIES LIMITED(the Company') for the year ended on March 31 2019. We report that:-
i. In respect of its fixed assets:
(a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of fixed assets whichis in our opinion reasonable having regard to the size of the Company and the nature ofits assets. In accordance with this programme certain fixed assets have been physicallyverified by the management during the year and no material discrepancies have been noticedon such verification.
(c) As per the information and explanation given to us by the management the titledeeds of the immovable properties as disclosed in Property Plant and Equipments (NoteNo.2 to the financial statements) are held in the name of the Company.
ii. In respect of its inventories:
The inventory has been physically verified during the year by the management. In ouropinion the frequency of verification is reasonable. There were no material discrepanciesnoticed on physical verification of inventories as compared to the book records.
iii. The Company has not granted any loans secured or unsecured to Companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Act and hence provisions of Clause 3(iii) of the aforesaid Order arenot applicable to the Company.
iv. In our opinion and according to the information and explanations given to us theCompany has not granted any loan or provided security or guarantee and has not made anyinvestment requiring compliance of section 185 and I86 of the Companies Act 2013accordingly the provision of paragraph 3 (iv) of the Order is not applicable to theCompany.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from the public within the meaning of Sections 73 7475 and 76 of the Act and the Rules framed thereunder to the extent notified.
vi. We have broadly reviewed the cost records maintained by the Company specified bythe Central Government under sub-section (1) of the Section 148 of the Act and are of theopinion that prima facie the prescribed cost records have been maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate or complete.
vii. (a) According to the records of the Company the Company is generally regular indepositing with appropriate authorities undisputed statutory dues including providentfund employees' state insurance income-tax GST sales tax wealth tax duty of customsduty of excise value added tax or cess and other statutory dues applicable to it.
Further according to the information and explanations given to us no undisputedamounts payable in respect of provident fund employees' state insurance income-tax GSTsales tax wealth tax duty of customs duty of excise value added tax or cess and otherstatutory dues were outstanding as at 31-03-2019 for a period of more than six monthsfrom the date they became payable. (b) According to the records of the Company andinformation and explanations given to us the following are the particulars of disputeddues on account of Income Tax and Sales Tax that have not been deposited:
|Name of the Statute ||Nature of Dues ||Amount of Demand net of deposits (Rs. ) ||Period to which amount relates ||Forum where dispute is pending |
|Central Sales Tax Act 1956 ||Tax and Interest ||Rs. 3832129/- ||F.Y. 2009-10 ||Commissioner (Appeals) |
|Central Sales Tax Act 1956 ||Tax and Interest ||Rs. 7105587/- ||F.Y. 2010-11 ||Commissioner (Appeals) |
|Central Sales Tax Act 1956 ||Tax Interest and Penalty ||Rs. 4729426/- ||F.Y. 2011-12 ||Commissioner (Appeals) |
|Central Sales Tax Act 1956 ||Tax and Interest ||Rs. 5372712/- ||F.Y. 2012-13 ||Commissioner (Appeals) |
|Value Added Tax Act 2002 ||Tax Interest and Penalty ||Rs. 269536/- ||F.Y. 2011-12 ||Commissioner (Appeals) |
|Value Added Tax Act 2002 ||Tax and Interest ||Rs. 300190/- ||F.Y. 2013-14 ||Commissioner (Appeals) |
|Income Tax Act 1961 ||Tax and Interest ||Rs. 17716719/- ||A.Y. 2016-17 ||CIT (Appeals) |
viii. Based on our audit procedures and according to the information and explanationsgiven to us by the management we are of the opinion that the Company has not defaulted inrepayment of dues to financial institutions and bank.
ix. Based on our audit procedures and according to the information and explanationsgiven to us by the management the Company has not raised any money by way of initialpublic offer or further public offer (including debt instruments). Further term loanshave been applied for the purpose for which it is taken.
x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement. xi. The Company has paid/provided managerial remuneration in accordance withthe requisite approvals mandated by the provision of the Section 197 read with Schedule Vof the Act.
xii. The Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicable tothe Company and hence provisions of Clause 3(xii) of the aforesaid Order are notapplicable to the Company.
xiii. The Company has entered into the transaction with the related parties incompliance with the provisions of the Section 177 and 188 of the Act. The details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired under Accounting Standard (AS)18 Related Party Disclosures specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review and henceprovisions of Clause 3(xiv) of the aforesaid Order are not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with its directors orthe persons connected with him and hence provisions of Clause 3(xv) of the aforesaid Orderare not applicable to the Company.
xvi. The Company is not required to be registered Section 45-IA of the Reserve Bank ofIndia Act 1934 and hence provisions of Clause 3(xvi) of the aforesaid Order are notapplicable to the Company.
BLACK ROSE INDUSTRIES LIMITED ANNEXURE-B TO INDEPENDENT AUDITOR'S REPORT
The Annexure referred to in paragraph 2(f) under the Report on Other Legal andRegulatory Requirements' our report to the members of BLACK ROSE INDUSTRIES LIMITED(the Company') for the year ended on March 31 2019.
Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section143 of the Act
We have audited internal financial controls over financial reporting of BLACK ROSEINDUSTRIES LIMITED ("the Company") as of March 31 2019 in conjunction withour audit of the Standalone Ind AS Financial Statements of the Company for the year thenended on that date.
Management's Responsibility for the 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 Guidance Note on Audit of Internal Financial Controls over Financial Reporting issuedby the Institute of Chartered Accountants of India (ICAI). These responsibilities includesdesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of businessincluding adherence to Company's policies the safeguarding of the 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 Act.
Our responsibility is to express an opinion on Company's internal financial controlsover 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 deemed to be prescribed underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols both applicable to an audit of internal financial controls and both issued bythe ICAI. Those Standards and Guidance note require that we comply with ethicalrequirements and plan and perform 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 procedure 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 controls based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the Standalone Ind AS Financial Statements whether dueto 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 a reasonable assurance regarding the reliability of financial reporting andpreparation of financial statements for external purpose 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 the transactions are recorded as necessary topermit preparation of financial statements in accordance with the generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorisations of management and directors of the Company; and
3. Provide reasonable assurance regarding prevention or timely detection ofunauthorised 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. Alsoprojections of any evaluation of the internal financial control 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 the Company has in all material aspects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For and on behalf of |
| ||P K J and CO. |
| ||Chartered Accountants |
| ||Firm Regn. No. 124115W |
| ||(Padam Jain) |
|Place: Mumbai ||Partner |
|Dated: May 24 2019 ||Membership No. 71026 |