The Members of
Chandni Textiles Engineering Industries Limited
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of Chandni Textiles EngineeringIndustries Limited ("the Company") which comprise the Balance Sheet as at 31March 2019 and the Statement of Profit and Loss (including other comprehensive income)Statement of Changes in Equity and Statement of Cash Flows for the year then ended andnotes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the standalone financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standard prescribed under section133 of the Act read with the Companies (Indian Accounting Standard) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31 March 2019 and its profit (includingother comprehensive income) changes in equity and its cash flows 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 Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Key Audit Matters
Key audit matters ('KAM') are those matters that in our professional judgment were ofmost significance in our audit of the standalone financial statements of the currentperiod. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report:
|The key audit matters ||How our audit addressed the key audit matter |
| || |
|Adoption of Ind AS 115 - Revenue from Contracts with Customers |
|As described in Note 2(d) to the standalone financial statements the Company has adopted Ind AS 115 Revenue from Contracts with Customers (Ind AS 115') which is the new revenue accounting standard. ||Our Audit procedures on adoption of Ind AS 115 Revenue from contracts with Customers (Ind AS 115') which is the new revenue accounting standard - |
| || 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. |
|The revenue standard establishes a comprehensive framework for determining whether how much and when revenue is recognized. || |
|This involves certain key judgments relating to identification of distinct performance obligations determination of transaction price of identified performance obligation the appropriateness of the basis used to measure revenue recognized over a period. || |
| || Selected a sample of continuing and new contracts and performed the following procedures: |
| ||a) Read analysed and identified the distinct performance obligations in these contracts. |
| ||b) Compared these performance obligations with that identified and recorded by the Company. |
| ||c) Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration. |
| ||d) Performed analytical procedures for reasonableness of revenue recognition as per Ind AS 115. |
|The Company adopted Ind AS 115 and applied the available exemption provided therein to not restate the comparative periods. || Evaluated the changes made to internal reporting and accounting systems to reflect the changes required in revenue recognitions per the new accounting standard; |
| || Evaluated the cumulative effect adjustments as at 1 April 2018 for compliance with the new revenue standard; and |
| || Evaluated the appropriateness of the disclosures provided under the new revenue standard and assessed the completeness and mathematical accuracy of the relevant disclosures. |
Information Other than the Standalone Financial Statements and Auditor's Report thereon
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditors'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 in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the Standalone Financial Statements
The Company's management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss (includingother comprehensive income) changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Company's financial reportingprocess.
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 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 judgment andmaintain professional skepticism 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3X0of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to standalone financial statements inplace and the operating effectiveness 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 up to the date of ourauditors' 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.
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 auditors' 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein "Annexure A" a statement on the matters specified in paragraphs 3 and 4 ofthe Order to the extent applicable.
(A) 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) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".
(B) With respect to the other matters to be included in the Auditors' 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 does not have pending litigations which would impact its financialposition;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and
iii. There has been no amount required to be transferred to the Investor Education andProtection Fund by the company.
(C) With respect to the matter to be included in the Auditors' Report under section197(16) as amended:
According to the information and explanations given to us the Company haspaid/provided for managerial remuneration in accordance with the provisions of section 197read with Schedule V to the Act.
| ||For Ambavat Jain & Associates LLP |
| ||Chartered Accountant |
| ||ICAI FRN No: 109681W |
| ||Ashish J Jain |
| ||Partner |
| ||Membership No.111829 |
|Place: Mumbai || |
|Date: 21-05-2019 || |
Anne-ynre - A to the Auditors* Report
(Referred to in paragraph 1 under Report on other Legal & RegulatoryRequirements' Section of our report of even date)
[i] (a)The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) These fixed assets have been physically verified by the management at reasonableintervals during the year and no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
[ii] As informed to us the inventory in the company's possession has been physicallyverified at reasonable intervals during the year by the management. In respect ofinventory lying with the third parties the same have substantially been confirmed by themat reasonable intervals during the year. The discrepancies noticed on verification betweenphysical stock and book records were not material.
[iii] The company has not granted any loans secured or unsecured to companies firmslimited liability partnership or other parties covered in the register maintained u/s.189of the Companies Act 2013. Accordingly clause 3(iii) of the Order is not applicable.
[iv] According to the information and explanations given to us in our opinion theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the investments made during the year.
[v] The company has not accepted any deposits from the public.
[vi] As informed to us maintenance of cost records has not been prescribed by theCentral Government under sub-section (1) of section 148 of the Companies Act 2013 for anyof the product of the Company.
[vii] (a)In our opinion and according to the information and explanations given to usthe company has generally been regular in depositing with the appropriate authorities theundisputed statutory dues applicable to it. There were no arrears of outstandingundisputed statutory dues as at the last day of the financial year concerned for a periodof more than six months from the date they became payable.
(b)According to the information and explanations given to us there are no dues ofincome tax sales tax custom duty service tax excise duty value added tax goods andservice tax which have not been deposited on account of any dispute.
[viii] According to the information and explanations given to us the company has notdefaulted in repayment of loans to banks during the year. The company has not obtained anyloans or borrowings from any financial institutions government or debenture holders.
[ix] The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.
[x] According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit
[xi] According to the information and explanations given to us the Company haspaid/provided for managerial remuneration in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Act.
[xii] In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
[xiii] According to the information and explanations given to us transactions with therelated parties are in compliance with sections 177 and 188 of the Act where applicableand details of such transactions have been disclosed in the financial statements asrequired by the applicable accounting standards.
[xiv] According to the information and explanations give to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year.
[xv] According to the information and explanations given to us the Company has notentered into non-cash transactions with directors or persons connected with him.Accordingly paragraph 3(xv) of the Order is not applicable.
[xvi] According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.
| ||For Ambavat Jain & Associates LLP. |
| ||Chartered Accountants |
| ||ICAI FRN No: 109681W |
| ||Ashish J.Jain |
| ||Partner |
|Place: Mumbai ||Membership No. 111829 |
|Date: 21-05-2019 || |
Annexure - B to the Auditors' Report
(Referred to in paragraph 2 (f) under Report on other Legal & RegulatoryRequirements' Section of our report of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ChandniTextile Engineering Industries Limited ("the Company") as of 31st March 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 (TCAE). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future 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.
Considering the size of the company and nature of its business in our opinion theCompany has in all material respects an adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at 31st March 2019 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.
| ||For Ambavat Jain & Associates LLP |
| ||Chartered Accountants |
| ||ICAI FRN No: 109681W |
| ||Ashish J.Jain |
|Place: Mumbai ||Partner |
|Date: 21-05-2019 ||Membership No. 111829 |