The Members of
Dixon Technologies (India) Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of DixonTechnologies (India) Limited ("the company") which comprise the Balance Sheetas at 31st March 2018 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the statement of changes in equity for the year thenended and a Summary of Significant Accounting Policies and Other Explanatory Information.
Management's Responsibility for the Standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance (Including other comprehensive income) cashflows and change in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards (Ind AS) specified underSection 133 of the Act read with relevant rules issued thereunder. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding 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 wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.
Our responsibility is to express an opinion on these standalone Ind AS financialstatements based 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 ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe Ind AS 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 thestandalone Ind AS financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany's preparation of the standalone Ind AS financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS 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 Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thefinancial position of the Company as at 31st March 2018 and its financial performanceincluding other comprehensive income its cash flows and the changes in equity for theyear 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 Statement of Profit and Loss (Including Other ComprehensiveIncome) Cash Flow Statement and Statement of Changes in Equity dealt with by this Reportare in agreement with the books of account.
d. In our opinion the aforesaid standalone Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant rulesissued thereunder.
e. On the basis of the written representations received from the directors as on 31stMarch 2018 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 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 has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements - Refer Note No. 38 (1A) (v) (vi) (vii)(viii) & (ix) to the Ind AS financial statements
ii. The Company does not have any material foreseeable losses on long term contractsincluding derivative contracts;
iii. There was no amount which were required to be transferred to the investoreducation & protection fund.
For Singhi & Co.
Firm Reg. No. 302049E
| ||B.L. Choraria |
|Place: Noida (Delhi-NCR) ||Partner |
|Date: 26th May 2018 ||Membership No.: 022973 |
Annexure - A referred to in paragraph 1 of our report of even date on the other legaland regulatory requirements
Re: Dixon Technologies (India) Limited
On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:
(i) a. The Company is maintaining proper records showing full particulars includingquantitative details and situation of property plant and equipment.
b. As informed to us the company has a phased programme of physical verification ofits property plant and equipment which in our opinion is reasonable having regard tothe size of the company and the nature of its property plant and equipment. Managementhas physically verified certain property plant and equipment during the year and asinformed to us no material discrepancies were noticed as compared to books of account.
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 explained to us inventories (except stock intransit) were physically verifiedduring the year by the management. In our opinion the frequency of verification isreasonable and the discrepancy between physical stock and book stock were not significantand the same has been properly adjusted in the books of account.
(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act' 2013 therefore provisions of this clause are notapplicable to the company.
(iv) In our opinion and According to the information and explanation given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the guarantees given & Investment made in its subsidiary and Joint controlledentities during the year. The company has not given any loan to its subsidiary and jointlycontrolled entities during the year.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of directivesissued by the Reserve Bank of India and hence provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and rules framed thereunder with regard to the depositsaccepted from the public are not applicable to the company.
(vi) The company is required to maintain cost records pursuant to the rules made by thecentral government for the maintenance of cost records under sub-section (1) of section148 of the Act we are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have not however made a detailed examination of therecords with a view to determining whether they are accurate or complete.
(vii) a. According to the records of the Company the
Company is generally regular in depositing material undisputed statutory dues includingprovident fund investor education and protection fund employees' state insurancesales-tax service tax custom duty excise duty income tax cess and other statutorydues applicable to it with the appropriate authorities.
b. According to the information and explanation given to us and records of the Companythere are dues outstanding of income tax or sales tax or service tax or duty of customs orduty of excise or value added tax on account of disputes as stated below:
|Nature of Dues ||Amount Involved (Rs.in Lakhs) ||Amount Paid under Protest (Rs.in Lakhs) ||Forum Where the dispute is pending ||Year |
|Sales Tax excl. penalty & Interest ||49.48 ||18.79 ||Joint Commissioner ||2015-16 2017-18 |
| ||8.02 ||1.22 ||High Court ||2009-12 |
| ||12.91 ||9.36 ||Deputy Commissioner ||2009-10 2011-12 |
| || || || ||2014-15 2016-17 |
| ||0.76 ||0.76 ||Asst. Commissioner ||2014-15 |
| ||141.79 ||20.51 ||Joint Commissioner (Appeal) ||2008-09 2011-14 |
| ||212.96 ||50.63 || || |
|Custom Duty ||42.68 ||120.00 ||Add. Commissioner of Custom ||2011-12 |
| ||421.46 ||1.76 ||Commissioner of Custom ||2009-12 |
| ||149.50 ||9.89 ||CESTAT ||2009-12 2013-15 |
| ||613.64 ||131.65 || || |
|Central Excise excl. penalty & interest ||28.52 ||- ||Add. Commissioner of Central Excise ||2009-10 |
| ||8.13 ||2.25 ||Ass. commissioner of Central Excise ||2007-08 |
| ||376.53 ||28.16 ||CESTAT ||2012-2016 |
| ||36.24 ||- ||Commissioner of Central Excise ||2008-09 |
| ||453.82 ||- ||Supreme Court ||2007-08 |
| ||903.25 ||30.41 || || |
|Income Tax ||169.62 ||- ||ITAT ||AY-2013-14 |
| ||60.39 ||- ||CIT ||AY-2014-15 |
| ||230.02 ||- || || |
(viii) Based on our audit procedures and on the information and explanations given bythe management we are of the opinion that the Company has not defaulted in repayment ofdues to banks. There are no outstanding dues to the financial institutions and debentureholders.
(ix) To the best of our knowledge and belief and according to the information andexplanations given to us term loans availed by the Company were prima facie applied bythe Company for the purpose for which loans were obtained. The company has raised money byway of Initial Public offer which has been utilized by the Company for the purpose asgiven in the prospectus so far spent.
(x) Based on our examination of the books and records of the Company carried out inaccordance with the generally accepted auditing practice in India and according to theinformation and explanations given to us no fraud by the Company or on the Company by itsofficers/employees has been noticed or reported during the year.
(xi) According to the information and explanations given to us and based on ourexamination of the record of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provision ofsection 197 read with schedule V to the Act.
(xii) The Company is not a Nidhi Company therefore provisions of this clause are notapplicable to the company.
(xiii) Based on our examination of the books and records of the Company alltransactions with related parties are in compliance with sections 177 and 188 of the Actwhere applicable and details of such transactions have been disclosed in the Ind ASfinancial statements as required by the applicable 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 audit thereforeprovisions of this clause are not applicable to the company.
(xv) To the best of our knowledge and belief and according to the information andexplanations given to us the company hasn't entered into any non-cash transactions withdirectors or persons connected with him therefore provisions of this clause are notapplicable to the company.
(xvi) Company is not required to be registered under section 45-IA of the Reserve Bankof India Act 1934 therefore provisions of this clause are not applicable to the company.
For SINGHI & CO.
Firm Reg. No. 302049E
| ||B.L. Choraria |
|Place: Noida (Delhi- NCR) ||Partner |
|Dated: 26th May 2018 ||Membership No.: 022973 |
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 reporting of DixonTechnologies (India) Limited ("the Company") as of 31st March 2018 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor 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 the Institute ofChartered Accountants of India and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 Ind AS 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 Ind AS financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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.
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 31st March 2018 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 SINGHI & CO.
Firm Registration No. 302049E
Membership No. 022973
Place: Noida (Delhi- NCR)
Date: 26th May 2018