The Members of Dhanlaxmi Fabrics Ltd
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Dhanlaxmi FabricsLimited ("the Company") which comprise the Balance Sheet as at 31s1March 2017 the Statement of Profit and Loss and Cash Flow Statement for year then endedand a summary of significant accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FORTHE 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 andpresentation of these standalone financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions 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 thereunder.
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 eth icalrequirements 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 procedures selected depend 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 assessments 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 but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.
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.
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 31s1 March 2017 and its profit and its cash flows for the year ended onthat date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order 2017 (the Order')issued by the Central Government of India in terms of sub-section(11) of section 143 ofthe Act we give in the "Annexure B" a statement on the matters specified in theparagraph 3 and 4 of the Order to the extent applicable.
2. As required by section 143 (3) of the Act we report that:
a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
b. In our opinion proper books of 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 u/s. 133 of the Act read with the Rule 7 of the Companies(Accounts) Rules 2014;
e. On the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 from being appointed as a director in terms of Section164 (2) of the Act; and
f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and 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:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statement - Refer Note 29 "Contingent Liability" tothe financial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv. The company has provided requisit disclosure in the financial statements as regardsits holding and dealing in Specified Bank Notes as defined in the Notification S.O.3407(E) dated the 8lh November 2016 of the Minister of Finance during theperiod from 8lh November 2016 to 30lhDecember 2016. Based on Auditprocedure performed and the representations provided to us by the management we reportthat the disclosure are in accordance with the books of accounts maintained by the companyand produced to us by the management.
For S. G. Kabra&Co.
Chartered Accountants FRN 104507W
(S. G. Kabra)
Partner M No 038867
Place: Mumbai Dated: 30th May 2017
"ANNEXURE A"TOTHE INDEPENDENT AUDITOR'S
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 DHANLAXMIFABRICS LIMITED ("the Company") as of March 312017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
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.These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its 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 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 in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312017 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 Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
ForS. G. Kabra & Co
Chartered Accountants FRN : 104507W
(S. G. Kabra)
Partner M No:038867
Place: Mumbai Date: 30lh May 2017
ANNEXURE "B"TOTHE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under the heading "Report on other Legal andRegulatory Requirements of our
report of even date to the members of Dhalaxmi Fabrics Ltd for the year ended 31s*March 2017)
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed Assets.
(b) All the fixed assets were physically verified by the management during the year. Weare informed that no material discrepancies were noticed on such verification.
(c) The title deeds of the land in the immovable property are not held in the name ofthe company.
(ii) (a) The management has conducted the physical verification of inventory atreasonable intervals. We are informed that no material discrepancies were noticed onphysical verification of the inventory.
(iii) The Company has not granted any loans secured and unsecured to Companies firmsor other parties covered in the register maintained under section 189 of the Companies Act2013. Consequently requirement of clauses 3 (iii) (a) to (iii) (c) of paragraph 3 of theorder are not applicable to the company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the companies act 2013in respect of loans investments guarantees and security.
(v) The company has not accepted any deposits from public.
(vi) We have broadly reviewed the cost records maintained by the company pursuant tothe rules prescribed by the Central Government under sub section 1 of section 148 of theCompanies Act 2013 and are of the opinion that prime facie the prescribed accounts andcost records have been maintained.
(vii) In our opinion and according to the information and explanations given to usthere is an adequate internal control system commensurate with the size of the Company andthe nature of its business with regard to purchase of inventory fixed assets and for thesale of goods and services. We have not observed any major weakness in the internalcontrol system during the course of the audit.
(viii) (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including Provident Fund Employees' State Insurance Income TaxSales-tax Wealth Tax Service Tax Duty of Customs Duty of Excise Value Added Tax cessand other statutory dues applicable to it. According to the information and explanationsgiven to us no undisputed amounts payable in respect of outstanding statutory dues werein arrears as at 31s1 March 2017 for a period of more than six months from thedate they became payable.
(b) According to the information and explanations given to us there are no materialdues of Sales Tax Wealth Tax Service Tax Duty of Customs Duty of Excise Value AddedTax cess which have not been deposited with the appropriate authorities on account of anydispute. However according to information and explanation given to us the following duesof Income Tax have not been deposited by the Company on account of disputes:-
|Name of the Statute ||Nature of Dues ||Amount(Rs.) ||Period to which the amount relates AY ||Forum where disputes is pendinq |
| ||Income Tax Assessment ||8612400/- ||2009-2010 ||Commissioner of Income Tax (Appeal) |
|Income Tax ||Income Tax Assessment ||8060954/- ||2010-11 ||ITAT (Appeal) |
|1961 ||Income Tax Assessment ||1978721/- ||2011-12 ||ITAT (Appeal) |
| ||Income Tax Assessment ||636910 ||2012-13 ||ITAT (Appeal) |
(c) According to the information and explanations given to us the amount required tobe transferred to investor education and protection fund in accordance with the relevantprovisions of the Companies Act 1956 (1 to 1956) and rules made there under has beentransferred to such fund within time.
(ix) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks. The Company has not taken anyloan either from financial institutions or from the government and has not issued anydebentures.
(x) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public oferor further public offer including debt instruments and term loans. Accordingly theprovisions of paragraph 3 (ix) of the Order is not applicable to the Company.
(xi) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no material fraud by the company or on the companyby its officers or employees has been noticed or reported during the year.
(xii) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act.
(xiii) In our opinion the company is not Nidhi Company. Therefore the provisions ofparagraph 3(xii) of the order are not applicable to the company.
(xiiii) In our opinion all transactions with the related parties are in compliancewith section 177 and 188 of Companies Act 2013 and details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
(xv) According to the information and explanation given to us and based on ourexamination of the record of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xvi) According to the information and explanation given to us and based on ourexamination of the record of the company the company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3 (vx)of order is not applicable.
(xvii) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
|For S. G. Kabra & Co Chartered Accountants FRN: 104507W |
|(S.G. Kabra) |
partner Place: Mumbai M No: 038867 Date: 30lh May 2017