The Members of
THE DHAR TEXTILE MILLS LTD
Report on the Financial Statements
We have audited the accompanying financial statements of THE DHAR TEXTILE MILLS LTD("the Company") which comprise the Balance Sheet as at March 31 2017theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.
Management's Responsibility for the 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 ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions 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 material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
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 there under.
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 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. 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 toprovide a basis for our audit opinion on the financial statements.
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 of the state of affairs of the Company as at 31stMarch 2017 and its profit/loss and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the 'Annexure A' a statement on the matters specifiedin paragraphs 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 financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 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 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 any 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.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. The company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 and these are in accordance with the books of accountsmaintained by the company.
For B. Bansal & Co.
Membership No. 422547
The Annexure referred to in paragraph 1 of Our Report on "Other Legal andRegulatory Requirements".
We report that:
1. In respect of Fixed Assets:
a. The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
b. As explained to us fixed assets have been physically verified by the management atreasonable intervals; no material discrepancies were noticed on such verification.
c. The title deeds of immovable properties are held in the name of the company.
2. In respect of inventories:
As explained to us inventories have been physically verified during the year by themanagement at reasonable intervals. No material discrepancy was noticed on physicalverification of stocks by the management as compared to book records.
3. In respect of granting of loans to certain parties:
As per the information produced before us no loan has been granted to parties coveredunder section 189 of the Companies Act 2013.
4. In respect of loans investments guarantees and security:
In respect of loans investments guarantees and security provisions of section 185and 186 of the Companies Act 2013 have been complied with.
5. In respect of Acceptance of Deposits:
According to information and explanations given to us the Company has not accepted anydeposits from the public in accordance with the provisions of Sections 73 to 76 or anyother relevant provisions of the Act and the rules framed there under.
6. In respect of Maintenance of Cost records:
As per information & explanation given by the management maintenance of costrecords has not been specified by the Central Government under sub-section (1) of section148of the Companies Act 2013.
7. In respect of Deposit of Statutory Dues:
According to the information and explanations given to us and the records of thecompany examined by us in our opinion the company is not regular in depositingundisputed statutory dues including Provident Fund Employees State Insurance Income-TaxSales-Tax and Excise Duty Custom Duty cess and any other statutory dues with theappropriate authorities. According to the records of the company examined by us noundisputed amount payable in respect of Income Tax Wealth Tax Custom Duty and ExciseDuty were in arrears as at 31st March 2017 for a period of more than 6 monthsfrom the date they become payable.
The disputed statutory dues aggregating to Rs.3846025/- have not been deposited onaccount of matters pending before appropriate authorities as under annexure for the sameis enclosed herewith:
|Name of the Statue ||Nature of Dues ||Forum where dispute is pending ||Amount |
|Labour Due (For the Year 2011) ||M.P. Government Labour Department ||861300/- |
|Labour Due (Feb - July 2010) ||M.P. Government Labour Department ||797162/- |
|Labour Due (Aug10 - Jan 2011) ||M.P. Government Labour Department ||2187563/- |
8. In respect of Default in repayment of dues :
The company is a sick company within the meaning of Sick Industrial Companies (specialProvision) Act 1985 as its accumulated losses exceeded fifty percent of its Net Worth atthe end of the financial year. The Company has incurred cash losses during the currentyear as also during the immediately preceding financial year. Reference file under section15(1) of sick Industrial Companies (special Provision) Act 1985 is registered as case no.353/2004 vide letter No. 3 (T-22)/BC/2004 dated 30/11/2004 issued by Registrar Board ofIndustrial and Financial Reconstruction New
Delhi. The bench has declared that the Company is a sick Industrial Company in terms of3 (1) (O) of the Act w.e.f. 2.05.2006.
Based on our audit procedures and on the basis of information and explanations given bythe management the Company has defaulted in the repayment of following dues to banks orfinancial institutions as at balance sheet date:
|Name of the Bank/Financial Institute ||Amount of Default (Rs. in Crores) ||Default Continued since |
|State Bank of India* ||113.26 ||30th April 04 |
|Industrial Development Bank of India ||62.51 ||30th June 04 |
|State Bank of India* ||53.88 ||30th April 04 |
|Canara Bank ||23.75 ||30th April 04 |
|State Bank of Saurashtra* ||18.83 ||30th April 04 |
|Total ||272.23 || |
*Standard Chartered Bank has takeover account of State Bank of India and State Bank ofSaurashtra whereas Kotak Mahindra Bank Ltd. has taken over account of IndustrialDevelopment Bank of India in financial year 2006-07 & 2007-08.
Asset Reconstruction Company India Ltd. (ARCIL) took over loan account of StandardChartered Bank whereas ASREC India Ltd. took over loan accounts of Kotak Mahindra BankLtd. and Canara Bank.
9. In respect of Application of Initial Public Offer/ Further public offer/ Term Loans:
Based on our audit procedures and according to the information given by the managementthe company has not raised any money by way of initial public offer or further publicoffer (including debt instruments) or taken any term loan during the year.
10. In respect of fraud reporting:
To the best of our knowledge and belief and according to the information andexplanations given to us no fraud on or by the company was noticed or reported during theyear.
11. In respect of Managerial Remuneration:
The company has not paid or provided any Managerial remuneration. Hence requisiteapprovals as mandated by provisions of Section 197 read with Schedule V of the Act are notapplicable.
12. In respect of Nidhi Company:
The company is not a Nidhi company.
13. In respect of Related parties transaction:
All transactions with the related parties are in compliance with sections 177 and 188of the Act where applicable and the details have been disclosed in the FinancialStatements etc. as required by the applicable accounting standards.
14. In respect of preferential allotment or private placement of shares or debentures:
The Company has not made preferential allotment or private placement of shares or fullyor partly convertible debentures during the year.
15. In respect of non cash transactions with directors or persons connected:
The company has not entered into any non-cash transactions with directors or personsconnected with him. Hence the provisions of Section 192 of the Act are not applicable.
16. In respect of registration under section 45-IA of Reserve Bank of India:
The company is not required to be registered under section 45-IA of the Reserve Bank ofIndia Act 1934.
For B. Bansal & Co.
Membership No. 422547
Report on Internal Financial Controls Over Financial Reporting
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 THE DHARTEXTILE MILLS LTD ("the Company") as of March 31 2017 in conjunction with ouraudit of the financial statements of the Company for the year 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. 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 judgement 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 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 authorisations 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
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 31 2017 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.
For B. Bansal & Co. Chartered Accountants FRN: 000450C
|Place:-Indore ||Atik Bansal |
|Date: 30/05/2017 ||(Partner) |
| ||Membership No. 422547 |