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E-Land Apparel Ltd.

BSE: 532820 Sector: Industrials
NSE: ELAND ISIN Code: INE311H01018
BSE 00:00 | 18 Jan 6.24 0.15
(2.46%)
OPEN

6.38

HIGH

6.38

LOW

5.86

NSE 00:00 | 18 Jan 6.05 0.10
(1.68%)
OPEN

5.85

HIGH

6.05

LOW

5.80

OPEN 6.38
PREVIOUS CLOSE 6.09
VOLUME 50
52-Week high 20.45
52-Week low 4.76
P/E
Mkt Cap.(Rs cr) 30
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 6.38
CLOSE 6.09
VOLUME 50
52-Week high 20.45
52-Week low 4.76
P/E
Mkt Cap.(Rs cr) 30
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

E-Land Apparel Ltd. (ELAND) - Auditors Report

Company auditors report

TO THE MEMBERS OF E-LAND APPAREL LIMITED

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of E-LandApparel Limited ("the Company") which comprise the Balance Sheet as at March31 2018 and the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the Indian Accounting Standards(Ind AS) prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended and other accounting principles generallyaccepted in India.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financialstatements based on our audit.

In conducting our audit we have taken into account the provisions ofthe Act the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules made thereunderand the Order issued under section 143(11) of the Act.

We conducted our audit of the Ind AS financial statements in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the Ind AS financial statements. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the Ind AS financial statements that give a trueand fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the Ind AS financialstatements.

We believe that the audit evidence obtained by us is sufficient andappropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 Ind AS and other accounting principles generally accepted in India of the stateof affairs of the Company as at March 31 2018 and its loss total comprehensive lossits cash flows and the changes in equity for the year ended on that date.

Material uncertainty related to Going Concern

We draw attention to Note 36 to the Ind AS financial statements whichindicates that the Company has incurred a net loss of Rs.7842.49 lakhs during the yearended March 31 2018 and the accumulated losses amounting to Rs.58171.19 lakhs as on thatdate have eroded the net-worth of the Company. These conditions indicate the existence ofa material uncertainty that may cast significant doubt on the Company's ability tocontinue as a going concern. However the Ind AS financial statements of the Company havebeen prepared on a going concern basis for the reasons stated in the said Note.

Our opinion is not modified in respect of this matter.

Other Matter

The transition date opening balance sheet as at April 1 2016 includedin these Ind AS financial statements is based on the statutory financial statementsprepared in accordance with the Companies (Accounting Standards) Rules 2006 audited bythe predecessor auditor whose report for the year ended March 31 2016 dated May 30 2016expressed an unmodified opinion on those financial statements and have been restated tocomply with Ind AS. Adjustments made to the previously issued said financial informationprepared in accordance with the Companies (Accounting Standards) Rules 2006 to complywith Ind AS have been audited by us.

Our opinion on the Ind AS financial statements is not modified inrespect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit wereport to the extent applicable 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 have beenkept 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 the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account.

d) In our opinion the aforesaid Ind AS financial statements complywith the Indian Accounting Standards prescribed under section 133 of the Act.

e) The matter described in the ‘Material uncertainty related toGoing Concern' paragraph above in our opinion may have an adverse effect on thefunctioning of the Company.

f) On the basis of the written representations received from thedirectors of the Company as on March 31 2018 taken on record by the Board of Directorsnone of the directors is disqualified as on March 31 2018 from being appointed as adirector in terms of Section 164(2) of the Act.

g) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A". Our report expresses a qualified opinionon the adequacy and operating effectiveness of the Company's internal financial controlsover financial reporting.

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 asamended in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Ind AS financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants (Firm's Registration No. 117366W/W-100018)

Monisha Parikh Partner (Membership No. 47840)

Bengaluru May 30 2018

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(g) under ‘Report on Other Legal andRegulatory Requirements' of our report of even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of E-Land Apparel Limited ("the Company") as of March 31 2018 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

LIGN=JUSTIFY>Basis for Qualified Opinion

According to the information and explanations given to us and based onour audit material weakness has been identified in the Company's internal financialcontrols over financial reporting as at March 31 2018 in respect of analysing quotationsfor purchases of raw materials and fixed assets which could potentially result inpurchases at higher than market price.

A ‘material weakness' is a deficiency or a combination ofdeficiencies in internal financial control over financial reporting such that there is areasonable possibility that a material misstatement of the company's annual or interimfinancial statements will not be prevented or detected on a timely basis.

Qualified Opinion

In our opinion to the best of our information and according to theexplanations given to us except for the possible effects of the material weaknessdescribed in Basis for Qualified Opinion paragraph above on the achievement of theobjectives of the control criteria the Company has maintained in all material respectsadequate internal financial controls over financial reporting and such internal financialcontrols over financial reporting were operating effectively as of March 31 2018 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

We have considered the material weakness identified and reported abovein determining the nature timing and extent of audit tests applied in our audit of theInd AS financial statements of the Company for the year ended March 31 2018 and thematerial weakness does not affect our opinion on the said Ind AS financial statements ofthe Company.

for DELOITTE HASKINS & SELLS LLP

Chartered Accountants (Firm's Registration No. 117366W/W-100018)

Monisha Parikh

Partner (Membership No. 47840)

Bengaluru May 30 2018

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

i. (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The Company has a program of verification of fixed assets to coverall the items in a phased manner over a period of three years which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Pursuantto the program certain fixed assets were physically verified by the Management during theprevious year. According to the information and explanations given to us no materialdiscrepancies 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 comprising all theimmovable properties of land and buildings are held in the name of the Company as at thebalance sheet date.

In respect of immovable properties of land that have been taken onlease and disclosed as fixed asset in the financial statements the lease agreements arein the name of the Company where the Company is the lessee in the agreement.

ii. As explained to us the inventories were physically verified duringthe year by the Management at reasonable intervals and no material discrepancies werenoticed on physical verification.

iii. The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Companies Act 2013.

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 185 and 186 of theCompanies Act 2013 in respect of grant of loans making investments and providingguarantees and securities as applicable.

v. According to the information and explanations given to us theCompany has not accepted any deposit during the year and does not have any unclaimeddeposits.

vi. The maintenance of cost records has not been specified by theCentral Government under Section 148(1) of the Companies Act 2013.

vii. According to the information and explanations given to us inrespect of statutory dues:

(a) Undisputed statutory dues including provident fund employees'state insurance income-tax sales-tax service tax goods and services tax duty ofcustoms duty of excise value added tax cess have not been regularly deposited with theappropriate authorities and there have been serious delays in a large number of cases.

(b) The undisputed amounts payable in respect of provident fundemployees' state insurance income-tax sales-tax service tax goods and services taxduty of customs duty of excise value added tax cess and other material statutory duesin arrears as at March 31 2018 for a period of more than six months from the date theybecame payable are as follows:

Name of Statute

Nature of Dues

Amount

Period to which the Amount Relates Due Date Date of subsequent payment

(Rs. Lakhs)

The Karnataka Tax on Professions Trades Callings and Employment Act 1976

Professional Tax

11.34

2016-17 and 2017-18 Various dates from May 31 2016 to September 30 2017 Not paid
The Finance Act 2015

Service tax

0.55

2016-17 and 2017-18 Various dates from Nov 06 2016 to July 06 2017 Not paid
The Central Excise Act 1944

Excise Duty

64.84

2016-17 and 2017-18 Various dates from Feb 06 2017 to July 06 2017 Not paid
The Karnataka Labour Welfare Fund Act 1965

Labour Welfare Fund

0.24

2015-16 Jan 15 2016 Not paid
Sales Tax

Central Sales Tax

1.07

2014-15 and 2015-16 April 21 2015 & August 21 2015 Not paid

(c) Details of dues of Income-tax Sales Tax Service Tax Duty ofCustoms Duty of Excise and Value Added Tax which have not been deposited as on March 312018 on account of disputes are given below:

Name of Statute Nature of Dues Forum where Dispute is Pending

Period to which

Amount the Amount Relates

(Rs. Lakhs)

Income-tax Act 1961 Income tax Commissioner of Income Tax (Appeals)

2008-09 & 2009-10

140.36

Sales Tax Sales Tax including interest and penalty Commissioner of Sales Tax Maharashtra

2001-02 to 2004-05

250.22

viii. In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in the repayment of loans or borrowings tofinancial institutions banks and government. The Company has not issued any debentures.

ix. The Company has not raised moneys by way of initial public offer orfurther public offer (including debt instruments) or term loans and hence reporting underclause (ix) of the Order is not applicable.

x. To the best of our knowledge and according to the information andexplanation given to us no fraud by the Company and no material fraud on the Company byits officers or employees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanationsgiven to us the Company has paid / provided managerial remuneration in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Companies Act 2013.

xii. The Company is not a Nidhi Company and hence reporting underclause (xii) of the Order is not applicable.

xiii. In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Section 177 and 188 of the Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the financial statements etc. asrequired 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 andhence reporting under clause (xiv) of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanationsgiven to us during the year the Company has not entered into any non-cash transactionswith its directors or persons connected with them and hence provisions of Section 192 ofthe Companies Act 2013 are not applicable.

xvi. The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants (Firm's Registration No. 117366W/W-100018)

SD/-

Monisha Parikh

Partner (Membership No.47840)

Bengaluru May 30 2018