Dixon Technologies (India) Ltd.
|BSE: 540699||Sector: Consumer|
|NSE: DIXON||ISIN Code: INE935N01020|
|BSE 00:00 | 24 May||3449.45||
|NSE 00:00 | 24 May||3448.00||
|Mkt Cap.(Rs cr)||20,472|
|Mkt Cap.(Rs cr)||20472.49|
Dixon Technologies (India) Ltd. (DIXON) - Auditors Report
Company auditors report
To the Members of
DIXON TECHNOLOGIES (INDIA) LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of DIXONTECHNOLOGIES (INDIA) LIMITED ("the Company") which comprise the balance sheetas at 31 March 2020 and the statement of Profit and Loss including other comprehensiveincome statement of changes in equity and statement of cash flows for the year thenended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view -in conformity with the Indian Accounting Standardsprescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia of the state of affairs of the Company as at 31 Marchs 2020 and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia ("the ICAI") together with the ethical requirements that are relevant toour audit of the standalone financial statements under the provisions of the Act and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matter described below to be thekey audit matter to be communicated in our report.
Description of the Key audit matter
Information Other than the Ind AS Standalone Financial
Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in Director'sReport Management Discussions and Analysis (MD&A) and Corporate Governance Reportbut does not include the financial statements and our auditor's report thereon which weobtained on the date of this auditor's report.
Our opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.
In connection with our audit of the standalone financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.
If based on the work we have performed we conclude that thereis a material misstatement of this other information we are required to report that fact.We have nothing to report in this regard.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theIndian Accounting Standards specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Director is also responsible for overseeing the company'sfinancial reporting process.
Auditor's Responsibilities for the Audit of the Standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)
(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 of the Act we give in the "Annexure A" a statement on thematters specified in 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statementscomply with the Indian Accounting Standards ('Ind AS') specified under Section 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2014.
(e) On the basis of the written representations received from thedirectors as on 31 March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2020 from being appointed as a director in termsof Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controlswith reference to standalone financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B".
(g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements
of Section 197(16) of the Act as amended; in our opinion and to thebest of our information and according to the explanations given to us the remunerationpaid by the Company to its directors during the year is in accordance with the provisionsof Section 197 of the Act.
(h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements - Refer Note 36
(a) to the standalone financial statements;
ii. the Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses - Refer Note 36(f) to the standalone financial statements;
iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company - Refer Note 36 (e) to thestandalone financial statements.
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragrapRs 1 under 'Report on Other Legal andRegulatory Requirements' section of the Independent Auditor's Report of even date to themembers of DIXON TECHNOLOGIES (INDIA) LIMITED on the standalone financial statements as ofand for the year ended 31 Marchs 2020)
(i) In respect of the Company's fixed assets (comprising of propertyplant and equipment and other intangible assets)
b. The Company has a regular program of physical verification of itsfixed assets under which fixed assets are verified in a phased manner over a period ofthree years which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. In accordance with this program certain fixed assets wereverified during the year and according to the information and explanation given to us nomaterial discrepancies were noticed on such verification.
c. According to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deed / transferdeed / conveyance deed provided to us we report that the title deeds of freeholdimmovable properties (which are included under the head 'Property plant and equipment')are held in the name of the Company. In respect of leasehold immovable properties thelease agreements are in the name of the Company.
(ii) The management has conducted physical verification of inventory atreasonable intervals during the year and according to the information and explanationsgiven to us no material discrepancies between physical inventory and book records werenoticed on physical verification.
(iii) According to the information and explanations given to us theCompany has granted unsecured loans to a company directors and key managerial personnelcovered in the register maintained under section 189 of the Companies Act 2013;
(a) in our opinion the terms and conditions of grant of such loans arenot prima facie prejudicial to the company's interest.
(b) The loans are repayable on demand
(c) there are no overdue amount in respect of loans granted to suchcompany directors and key managerial personnel.
(iv) In our opinion and according to the information and explanationsgiven to us company has complied with the provisions of Sections 185 and 186 of the Actin respect of loans investments guarantees and security.
(v) In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits during the year and had nounclaimed deposits at the beginning of the year within the meaning of Sections 73 to 76 ofthe Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordinglythe provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under sub-section (1) of Section 148 of the Act in respect of Company's productsand are of the opinion that prima facie the prescribed accounts and records have beenmade and maintained. However we have not made a detailed examination of the cost recordswith a view to determine whether they are accurate or complete.
(vii) a. According to the information and explanations given to us theCompany is generally been regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income- tax duty of customs duty of excisegoods and services tax ('GST') cess and other material statutory dues as applicable tothe appropriate authorities. Further no undisputed amounts payable in respect thereofwere outstanding at the year-end for a period of more than six months from the date theybecome payable.
b. According to the information and explanations given to us the duesoutstanding in respect of income-tax goods and service tax custom duty duty of excisesales tax and value added tax and other statutory dues on account of any dispute are asfollows:
(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings to anyfinancial institutions and banks. The company has no outstanding dues in respect ofgovernment loans and there are no dues payable to any debenture holder during the year.
(ix) In our opinion and according to the information and explanationsgiven to us money raised by public offer of equity shares during the earlier years andterm loans availed by the Company during the year were prima facie applied by theCompany for the purposes for which the moneys were raised other than temporary deploymentpending allocation.
(x) To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company or on the company by its officers oremployees has been noticed or reported during the period covered by our audit.
(xi) In our opinion and according to the information and explanationsgiven to us managerial remuneration has been paid / provided by the company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.
(xii) The Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.
(xiii) In our opinion and according to the information and explanationsgiven to us all transactions with the related parties are in compliance with Sections 177and 188 of Act where applicable and the requisite details have been disclosed in thefinancial statements etc. as required by the applicable accounting standards.
(xiv) During the year the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures.Accordingly provisions of clause3 (xiv) of the order are not applicable.
(xv) In our opinion and according to the information and explanationsgiven to us the Company has not entered into any non-cash transactions with the directorsor persons connected with them covered under Section 192 of the Act. Accordinglyprovisions of clause3 (xv) of the order are not applicable.
(xvi) The company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934. Accordingly provisions of clause3 (xvi) of theorder are not applicable.
ANNEXURE B TO THE INDEPENDENT AUDITOR'S
Report of even date on the standalone financial statements of DIXONTECHNOLOGIES (INDIA) LIMITED
Independent Auditor's report on the Internal Financial Controls withreference to standalone financial statements under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")
1. We have audited the internal financial controls with reference tothe financial statements of DIXON TECHNOLOGIES (INDIA) LIMITED ("the Company")as of 31 Marchs 2020 in conjunction with our audit of the standalone financial statementsof 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 andmaintaining internal financial controls based on the internal control with reference tothe financial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the company's business including adherence to company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to the financial statements based on our audit.We conducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing issued by the Institute of Chartered Accountants of India (ICAI) and deemed tobe prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to the financialstatements were established and maintained and if such controls operated effectively inall material respects.
4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls with reference to the financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to the financial statements included obtaining an understanding of internalfinancial controls with reference to the financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to the financial statements.
Meaning of Internal Financial Controls with reference to the financialstatements
6. A company's internal financial controls with reference to thefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial controls with reference to the financial statements includes thosepolicies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary 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 authorisations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference tothe financial statements
7. Because of the inherent [imitations of internal financial controlswith reference to the financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to the financial statements to future periods are subject to therisk that the internal financial controls with reference to the financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.
8. In our opinion the Company has in all material respects adequateinternal financial controls system with reference
to the financial statements and such internal financial controls withreference to the financial statements operating effectively as at 31 Marchs 2020 based onthe internal control with reference to the financial statements criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls over financial reporting issued bythe Institute of Chartered Accountants of India.