TO THE MEMBERS OF FILATEX FASHIONS LIMITED
Report on the Ind AS financial statements Opinion
We have audited the accompanying Ind AS financial statements of M/S. FILATEXFASHIONS LIMITED ("the Company")which comprise the Balance Sheet as at 31stMarch 2021 the Statement of Profit and Loss including the statement of OtherComprehensive income the Cash Flow Statement the statement of changes in equity and asummary of the significant accounting policies and other explanatory information for theyear then ended ("Ind AS financial statements").
In our opinion and to the best of our information and according to the explanationgiven to us the aforesaid Ind AS financial statements give the information required bythe 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 31st March 2021 of its profit including other comprehensive income its cash flowsand changes in equity for the year ended on that date subject to our comments in the auditreport.
Key Audit Matters
Key audit maters are those maaers that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These maaers 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 maters. We have determined that there are no key audit maters tocommunicate in our report.
Basis for opinion
We conducted our audit in accordance with the Standards on Auditing specified under rSecfi 143(10) of the companies Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilifiesfor the Audit of the Financial Statementssectio of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Insfitue of Chartered Accountants of India ('ICAI') together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the rules there under and we have fulfilled our other ethicalresponsibilities^ accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
Information other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon. Our opinion on the financialstatements does not cover the other information and we do not express any form ofassurance conclusion thereon. In connection with our audit of the financial statementsour responsibility is to read the other information and in doing so consider whether theother information materially inconsistent with the financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation; we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the Ind AS financial statements
The Company's Board of Directors is responsible for the maters stated in Sectio 134(5)of the Companies Act 2013 ("the act") with respect to the preparation of theseInd AS financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and changes inequity of the Company in accordance with the account finger principles generally acceptedin India including the Accounting Standards specified under r Secfi 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and deteccng frauds andother irregularires; seleclon and applipplon of appropriate accountng policies; makingjudgments and essmates that are reasonable and prudent; design implementati'onandmaintenance of adequate internal financial controls that were operarati eff eff ely forensuring the accuracy and completeness of the accountingrecords relevant to thepreparaatioand presentati'onof the Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.
In preparing the financial statements Management is responsible for assessing theCompany's ability to conti'nueas a going concern disclosing as applicable maaersrelated to going concern and using the going concern basis of accountingunless Managementeither Intends to liquidate the Company or to cease operationsor has norealissti'alternanae but to do so.The Board of Directors are also responsible foroverseeing the Company's financial rreporti'nprocess.
Our objecti es are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditi'ngwill always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these Ind AS financial statements.
As part of an audit in accordance with Standards on Auditing we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Ind AS financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detetectia material misstatement resulting fromfraud is higher than for one resultinfrom error as fraud may involve collusion forgeryintentional omissions misrepresent aationsor the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Secti'on143(3)(i) of the Act we are also responsible for explaining our opinion on whether the Companyhas adequate internal financial controls system in place and the operating efficiency ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounnting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to connoting as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention our auditor's report to the related disclosuresin the Ind AS financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or condifionsmay cause the Company to cease toconfinue as a going concern.
Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactionsand events in a manner that achieves fairpresentaation.
We communicate with those charged with governance regarding among other maters theplanned scope and timingof the audit and significant audit findings including anysignificant deficiencies in internal control that we identiy during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationshipsand other maters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the maters communicated with those charged with governance we determine thosemaaers that were of most significance in the audit of the Ind AS financial statements ofthe current period and are therefore the key audit maters. We describe these maaers in ourauditor's report unless law or regulalation precludes public disclosure about the mater orwhen in extremely rare circumstances we determine that a mater should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ('the Order') issued bythe Central Government of India in terms of sub-section(11) of Section 143 of the Act wegive in the 'Annexure A' a statement on the maters specified in the paragraph 3and 4 of the order.
2. As required by Section143 (3) of the Act we report that:(a) We have sought andobtained all the information and explanation except the external confirmation from the theparty the Company which to the best of our knowledge and belief were necessary for thepurposes of our audit. The Management assures of the matching balances in counterpart'sbooks.
(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 accounts.
(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of the written representative' on received from the directors as on31st March 2021taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021from being appointed as a director in terms ofSecti'on164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial rreporting of the Company and the operating effffeceness of such controls refer to ourseparate Report in 'Annexure B'.
(g) With respect to the other maters 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 explanting ons given to us:
a. The Company has disclosed the impact of pending liti aationon its financial al positin its Ind AS financial statements.
b. TheCompany did not have any long-term contracts including derivatie contracts forwhich there were any material foreseeable losses.
c. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Prottectio Fund by the Company.
| ||For M M Reddy & Co |
| ||Chartered Accountants Firm Reg. No:010371S |
|Place: Hyderabad ||M Madhusudhana Reddy |
|Date:30-06-2021 ||Partner |
| ||Membership No:213077 |
| ||UDIN: 21213077AAAAIU2035 |
ANNEXURE 'A' TO THE INDEPENDENT AUDITORS' REPORT
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the Ind AS financial statements for the year ended 31March 2021.
According to information and xplanaations gen to us we report that:
1.a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The fixed assets have been physically verified by the Management during the yearwhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed on such verification
c) The of all the immovable properties of the Company shown under the Fixed Assetsschedule are held in the name of Company.
2. The inventories have been physically verified by the Management at reasonableintervals during the year. In our opinion the frequency of such verifications reasonableand no discrepancies were noticed at the time of verification
3. The Company has granted no loans secured or unsecured to companies firms LLP orother parties covered in the registered maintained under Secti'o189 of the Companies Act2013
4. The Company has not granted any loans and not made any investments as per sections185 and 186 of the Act.
5. The Company has not accepted any deposits to which the provisions of Sec. 73 to 76or any other relevant provisions of the Act and the rules framed there under and thedirections issued by the RBI are applicable. Hence this clause is not applicable and notcommented upon.
6. As informed to us the maintenance of cost records has not been specified by thecentral government under sub-section(1) of section 148 of the act in respect of the eactivity carried on by the company.
7. a) According to the information and explanation given to us and on the basis of ourexaminant of the records of the Company amounts deducted / accrued in the books of accountin respect of undisputed statutory dues including Service tax Duty of Customs Duty ofExcise Valued added tax Goods and Service Tax and other material statutory dues havebeen deposited with occasional delays during the period by the Company with theappropriate authorities. But undisputed statutory dues in respect of Employees StateInsurance Tax deducted at source remained outstanding for more than six months from thedate it became payable as follows:
|Particulars ||More than six months in Rs. ||Total liability in Rs. |
|Tax deducted at source ||1481709 ||1481709 |
|Employees State Insurance ||60959 ||60959 |
a) According to the information and explanation given to us there are arrears ofundisputed amounts payables in respect of income tax as at 31.03.2021 for a period morethan six months from the date they became payable as follows:
Assessment Year - 2014-15 - 506750 Assessment Year - 2013-14 - 122730 AssessmentYear - 2012 - 13 918150 Assessment Year - 2011-12 - 831750
8. In our opinion and according to the information and to us the Company has notdefaulted in the repayment of due to banks. The company has not taken any loan either fromfinancial institutions or the government and has not issued any debentures.
9. During the year the company received money of Rs. 36099998 against issuing sharewarrants.
10. Based upon the audit procedures performed we report that no fraud by the Companyand no fraud on the Company by its officers / employees has been n notic or reportedduring the course of our audit.
11. Based upon audit procedures performed the information and explanation given to usthe Managerial Remuneration has been paid / provided in accordance with the requisiteapprovals mandated by Sec. 197 read with Schedule V to the Act.
12. The Company is not a Nidhi Co. and therefore clause 3(12) of the Order is notapplicable to the Company and we do not comment upon this provision.
13. In our opinion all the Related Party Transactions entered into by the Companyduring the year are in compliance with the provisions Sec. 188 & 177 of the Act andthe details thereof have been disclosed in the Financial Statements as required by theAccounting standards and the Act.
14. Based upon audit procedures performed the information and explanation' on given tous the Company has not made preferential allotment or private placement of shares orfully or partly convertible debentures during the year.
15. The Company has not entered into any non-cash transactions with directors / personsconnected with him as stipulated u/s. 192 of the Act. Clause 3(15) of the Order istherefore not applicable to the Company.
16. In our opinion the Company is not required to be registered u/s 45-IA of theReserve Bank of India Act 1934.
| ||For M M Reddy & Co |
|Place: Hyderabad ||Chartered Accountants |
|Date: 30-06-2021 ||Firm Reg. No:010371S |
| ||M Madhusudhana Reddy |
| ||Partner |
| ||Membership No:213077 |
| ||UDIN: 21213077AAAAIU2035 |
ANNEXURE 'B' TO THE INDEPENDENT AUDITORS' REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section3 of Sectid43of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of M/s.FILATEX FASHIONS LIMITED as of March 31 2021 in conjunction with our audit of the IndAS 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 In of Chartered Accountants of India. These r responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effficiency for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand directors of frauds and errors the accuracy and completeness of the accountingrecords and the times prevarication of reliable financial information's 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 FinancialReporting(the Guidance Note") and the Standards on Audit issued by ICAI and deemedto be prescribed under secti'on143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls. 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 financialreport was established and maintained and if such controls operated effetely 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 operating Ouraudit of internal financial controls over financial report included obtaining anunderstanding of internal financial controls over financial report assessing the riskthat a material weakness exists and evalualute at the design and operating effffecenessof internal control based on the assessed risk. 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.
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 r reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial report is a process designed toprovide reasonable assurance regarding the reliability of financial reporting and theprevarication of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financial rreport includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transaction and dispositionsof the assets of the Company;
(2) provide reasonable assurance that transaction 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 authorisati'onsof Management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or time detestation ofunauthorised ed acquisitions or dispassion of the Company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial RReporting
Because of the inherent limitations of internal financial controls over financialreport 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 c condition or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of the information and explanation given to us the Companyhas in all material respects an adequate internal financial controls system overfinancial report and such internal financial controls over financial reporting wereoperating effectively as at March 31 2021based on the internal control over financialrepotting criteria established by the Company considering the essenenti' components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the intitue of Chartered Accountants of India.
| ||For M M Reddy & Co |
| ||Chartered Accountants Firm Reg. No:010371S |
| ||M Madhusudhana Reddy |
| ||Partner |
|Place: Hyderabad ||Membership No:213077 |
|Date: 30-06-2021 ||UDIN: 21213077AAAAIU2035 |
| ||FILATEX FASHIONS LTD |
| ||CIN: L51491TG1994PLC017158 |