CHARMS INDUSTRIES LIMITED
Report on Financial Statements
1. We have audited the accompanying financial statements of CHARMS INDUSTRIESLIMITED ("the Company") which comprises Balance Sheet as at 31stMarch 2019 the Statement of Profit and Loss(statement of changes in equity) and thestatement of Cash flow Statement for the year ended and a Summary of significantaccounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India;
a) In the case of the Balance Sheet of the state of affairs of the Company as at March31 2019;
b) In the case of the Statement of Profit and Loss of the Loss for the yearended on that date;
c) the case of the Cash Flow Statement of the Cash Flow for the year ended on thatdate;
Basis for Opinion
3. 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
4. We draw attention to Note 2 "Property plant & machinery" of thefinancial statements which describes that company had purchased an instrument namely"Physical Health Recorders" which was purchased for other purposes but later onthe purpose was dropped. Henceforth the depreciation on the same will not available to thecompany. The company has claimed depreciation in earlier years however from thisfinancial year onwards depreciation was not taken. Our opinion is not modified in respectof this matter.
Key Audit Matter
5. 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.
Management's Responsibility for the Financial Statements
6. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial position andfinancial performance 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 maintenance of adequate accounting records in accordance withthe provision of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making Judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating 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 materials misstatement whether due to fraudor error.
7. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provision of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under and the Order issued under section143(11) of the Act.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedure selected depends on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessment theauditor considers 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. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the financial statements.
Report on Other Legal and Regulatory Requirements
8. As required by the Companies (Auditor's Report) Order 2016 (the Order) issued bythe
Central Government in terms of Section 143 (11) of the Act we enclosed in the
annexure A a statement on matters specified in paragraph 3 & 4 of the said order.
9. As required by Section 143 (3) of the Act based on our Audit 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 purpose 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 and the Cash flow Statementdealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 except specified in accounting policies attached with financialstatements.
e) In our opinion there are no observations or comments on the financial transactionswhich may have an adverse effect on the functioning of the Company.
f) On the basis of the written representations received from the directors as on 31stMarch 2019 and taken on record by the Board of Directors we report that none of thedirectors is disqualified as on 31st March 2019 from being appointed as a directors interms of section 164(2) of the Act.
g) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls Report on theInternal Financial Controls under Clause (1) of Sub-section 3 of section 143 of thecompanies Act 2013 ("the Act")- is enclosed an annexure B to this report.
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. As informed to us the Company does not have any pending litigations which wouldimpact its financial position.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For JIGAR SHAH & ASSOCIATES Chartered Accountants Firm Reg. No.: 128263W
CA JIGAR M SHAH Proprietor M. NO.: 075778
ANNEXURE A- Report under the Companies (Auditor's Report) Order 2016 Referred to in ofour report of even date
In terms of the information and explanations sought by us and given by the company andthe books and records examined by us in the normal course of audit and to the best of ourknowledge and belief we state that: -
i. a. The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. As explained to us all the assets have not been physically verified by themanagement during the year but there is a regular programme of verification which in ouropinion is reasonable having regard to the size of the company and the nature of itsassets. No material discrepancies were noticed on such verification.
c. The immovable property held by the company is on lease rental basis hence para3(ii) of the order is not applicable to the company.
ii. As explained to us the inventory has been physically verified at reasonableintervals during the year by the management. In our opinion the frequency of verificationis reasonable. No material discrepancies were noticed on physical verification during theyear.
iii. (a). The Company has not granted unsecured loan to wholly owned subsidiary companycovered in the register maintained under section 189 of the Act. In our opinion andaccording to the information and explanation given to us the terms and condition of loansare not prejudicial to the company's interest having regards to management'srepresentation that the loans are given to such parties considering the company's economicinterest and long term trade relationship with such parties.
(b). In respect of loans granted to parties covered in the register maintained undersection 189 of the Companies Act 2013 loans are repayable on demands and are interestfree. Management has not demanded repayment of loan. Accordingly there has been defaulton the part of the parties to whom the money has been lent.
iv. According to information and explanation given to us the company has not grantedany loans or made any investments or provided any guarantees or security to the partiescovered under section 185 and 186 of the Companies Act 2013. Therefore the provisions ofclause 3(iv) of the said order not applicable to the company.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits in contravention of Directives issued by ReserveBank of India and the provisions of section 73 to 76 or any other relevant provisions ofthe Act and the rules framed there under where applicable . No order has been passed bythe Company Law Board or National Company Law Tribunal or Reserve Bank of India or anycourt or any other tribunal.
vi. It has been explained to us that the maintenance of cost records has not beenprescribed under section 148(1) of the Act.
vii. a.) According to the records of the company the company is generally regular indepositing with appropriate authorities undisputed statutory dues including providentfund investor education protection fund employees' state insurance income tax salestax wealth tax service tax custom duty excise duty Cess and other material statutorydues applicable to it.
b.) According to the information and explanations given to us no undisputed amountspayable in respect of income tax wealth tax Service Tax sales tax custom duty exciseduty and Cess were in arrears as at 31-Mar-2019 for a period of more than six months fromthe date they became payable.
c.) According to the information and explanations given to us there are no dues of
sales tax income tax custom duty wealth tax excise duty and Cess which have notbeen deposited on account of any dispute.
viii. Based on our audit procedures and according to the information and explanationsgiven to us we are of the opinion the company has not defaulted in repayment of dues toa financial institution bank Government or dues to debenture holders.
ix. The company has not raised moneys by way of initial public offer or further publicoffer (including debt instrument) and term loans.
x. Based upon the audit procedures performed and according to the information andexplanations given to us no fraud by the company or any fraud on the company by itsofficers or employees has been noticed or reported during the course of our audit thatcauses the financial statements to be materially misstated.
xi. The Managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act.
xii. The company is not a Nidhi Company hence this clause is not applicable.
xiii. Based upon the audit procedures performed and according to the information andexplanations given to us All transactions with related parties are in compliance withsections 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the Financial statements etc. as required by the applicable accountingstandards.
xiv. The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review.
xv. The company has entered into non-cash transactions with directors or personsconnected with him and the provision of section 192 of Companies Act 2013 has beencomplied with.
xvi. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
|Date: 28.05.2019 ||For JIGAR SHAH & ASSOCIATES |
|Place: AHMEDABAD ||CHARTERED ACCOUNTANTS |
| ||Firm Reg.No. 128263W |
| ||CA JIGAR M SHAH |
| ||(PROPRIETOR) |
| ||M.NO. 075778 |
ANNEXURE-B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the
Companies Act 2013 ("the Act")
1. We have audited the internal financial controls over financial reporting of CHARMSINDUSTRIES LIMITED as of 31-Mar-2019 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. The Company's management is responsible for establishing and maintaining internalfinancial controls. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
3. 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.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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.
5. 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
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that
(1) Pertain to 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
6. Because of the inherent limitations of internal financial controls over financialreporting
including the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
8. 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-Mar-2019.
|Date: 28.05.2019 ||FOR JIGAR SHAH & ASSOCIATES. |
|Place : AHMEDABAD ||CHARTERED ACCOUNTANTS |
| ||Firm Reg. No.: 128263W |
| ||(CA JIGAR M SHAH) |
| ||PROPRIETOR |
| ||M.NO. 075778 |