Dhanlaxmi Cotex Ltd.
|BSE: 512485||Sector: Financials|
|NSE: N.A.||ISIN Code: INE977F01010|
|BSE 00:00 | 24 Nov||Dhanlaxmi Cotex Ltd|
|NSE 05:30 | 01 Jan||Dhanlaxmi Cotex Ltd|
|BSE: 512485||Sector: Financials|
|NSE: N.A.||ISIN Code: INE977F01010|
|BSE 00:00 | 24 Nov||Dhanlaxmi Cotex Ltd|
|NSE 05:30 | 01 Jan||Dhanlaxmi Cotex Ltd|
To the Members of Dhanlaxmi Cotex Limited
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of Dhanlaxmi Cotex Limited ( theCompany ) which comprise the balance sheet as at 31st March 2019 and the statement ofProfit and Loss statement of changes in equity and statement of cash flows for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other 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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2019 and profit/losschanges in equity and its cash flows for the yearended on that 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.
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.
Description of each key audit matter in accordance with SA 701:
Emphasis of Matters
We draw attention to -
1. The Company has not complied with requirements stipulated in Ind-AS 109 FinancialInstruments which requires all the Investment shall be recognized to Fair value. TheCompany has held certain Investments which were classified as Inventories to the extentof Rs. 177375704/- at cost price. Effect of such valuation is reduction of value by Rs.47438130/-.
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 Companies Act 2013 ( the Act ) with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance (changes in equity)5 and cash flows of the Company in accordancewith6 the accounting principles generally accepted in India including the accountingStandards specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; 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 financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.
In preparing the 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.
Those Board of Directors are also responsible for overseeing the Company s financialreporting process.
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.
Paragraph 40(b) of this SA explains that the shaded material below can be located in anAppendix to the auditor s report. Paragraph 40(c) explains that when law regulation orapplicable auditing standards expressly permit reference can be made to a website of anappropriate authority that contains the description of the auditor s responsibilitiesrather than including this material in the auditor s report provided that the descriptionon the website addresses and is not inconsistent with the description of the auditor sresponsibilities below.
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 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 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 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.
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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor s report unless law or regulation precludes public disclosure about the matter orwhen 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
As required by the Companies (Auditor s Report) Order 2016 ( the Order ) issued bythe Central Government of India in terms of sub-section (11) of section 143 of theCompanies Act 2013 we give in the Annexure a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules
(e) On the basis of the written representations received from the directors as on 31stMarch2019 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 A .
(g) 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:
1. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.
2. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
3. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
ANNEXURE A TO THE AUDITORS REPORT
The Annexure referred to in our Independent Auditors Report to the members of theCompany on the standalone financial statements for the year ended March 31st2019 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of one years. Inaccordance with this program certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.
(c) There are no immovable properties held by the Company.
(ii) The management has conducted the physical verification of inventory at reasonableintervals. We are informed
that no material discrepancies were noticed on physical verification of the inventory.
(iii) (a) The Company has granted loans to one party covered in the register maintainedunder section 189 of the
Companies Act2013 ( the Act )
(b) In the case of the loans granted to any parties in the register maintained undersection 189 of the act theborrowers have been regular in the payment of the interest asstipulated. The terms of arrangements do not stipulate any repayment schedule and theloans are repayable on demand. Accordingly paragraph 3(ii) (b) of the order is notapplicable to the company in respect of payment of the principal amount.
(c) There are no overdue amounts for period of more than ninety days in respect of theloans granted to the
bodies corporate listed in the register maintained under section 189 of the act.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with
provision of section 185 and 186 of Act with respect to the loan and investment made.
(v) The Company has not accepted any deposits during the year within the meaning of theprovisions of section
73 to 76 or any other relevant provisions of the Companies Act and the rules framedthere under.
(vi) The Central Government has not prescribed the maintenance of cost records undersection148 (1) of the Act
for any of the services rendered by the Company
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records the Company is regular in depositing undisputed statutorydues including provident fund income tax service tax cess and other material statutorydues with the appropriate authorities. As explained to us the Company did not have anydues on account of sales tax wealth tax duty of customs value added tax employeesstate insurance and duty of excise.
(b) According to the information and explanation given to us there is no disputepending in respect of dues of provident fund/sales tax/wealth tax/service tax/customduty/excise duty/cess/value added tax were in arrears as at 31st march 2019for a period of more than six month from the date they became payable.
(viii) The Company did not have any outstanding dues to financial institutions banksor debenture holders during the year.
(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) Based upon the audit procedure performed for purpose of reporting the true and fairview of the Financial Statements and According to the information and explanations givento us no material fraud on or by the Company has been noticed or reported during thecourse of our audit.
(xi) According to the information and explanations given to us and based on ourexamination of the record of the Company managerial remuneration has been paid/providedin accordance with the requisite approvals.
(xii) In our opinion and according to the information and explanations given to us thecompany is not Nidhi Company. Accordingly paragraph 3(xii) of Order is not applicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Standalone financial statements as required by theapplicable accounting standards.
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.
(xv) According to the information and explanations given to us and based on ourexamination of the record of the Company the company has not entered into any non-cashtransactions with directors or persons connected with him.
(xvi) According to the information and explanations given to us the provisions of thesection 45-IA of the Reserve Bank of India Act 1934 are applicable to the company.However the company has not complied with the same.
ANNEXURE B TO THE AUDITORS REPORT
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 reportingofDhanlaxmiCotex Limited ( the Company ) as of 31st March 2019 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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 Reporting (theGuidance Note ) issued by the Institute of Chartered Accountants of India (the ICAI ).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to the Company s policiessafeguarding of its assets prevention and detection of frauds and errors accuracy andcompleteness of the accounting records and timely preparation of reliable financialinformation as required under the Act.
Our responsibility is to express an opinion on the Company s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the Guidance Note ) and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India.
Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch controls operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on the auditors judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe Company s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company s internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company s internal financial control over financialreporting includes those policies and procedures that (1) Pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2)Provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3)Provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
OpinionIn our opinion the company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at march 312019 based on theinternal control over financial reporting criteria established by the company consideringthe essential components of internal control stated in the guidance note on audit ofinternal financial control over financial reporting issued by the Institute of CharteredAccountant of India.