To the Members of Mandhana Industries Limited
Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Mandhana IndustriesLimited ('the Company') which comprise the balance sheet as at 31 March 2019 thestatement of profit and loss (including other comprehensive income) the statement of cashflows and the statement of changes in equity for the year then ended and a summary of thesignificant accounting policies and other explanatory information (herein after referredto as "Ind AS financial statements").
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed underSection 133 of the Act read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
On September 29 2017 the Hon'ble National Company Law Tribunal (NCLT) had admitted thepetition for initiating the Corporate Insolvency Resolution (CIR) Process under theprovisions of the Insolvency
Bankruptcy Code 2016 (IBC). Further vide NCLT order copy dated October 11 2017pursuant to Section 17 of the IBC the powers of the Board of Directors stand suspendedand such powers vest with the Interim Resolution Professional Ms. Charu Desai. Herappointment was subsequently confirmed by the Committee of creditors (CoC) as theResolution Professional (the "RP"). Subsequently the Committee of Creditors(CoC) approved a Resolution Plan of Formation Textiles LLC on July 7 2018 followed byapproval from Hon'ble NCLT Mumbai on November 30 2018. On 31 January 2019 the SuccessfulResolution Applicant takes over control of the Company from RP. As Company whereby thesuccessful resolution applicant Formation Textiles LLC had taken over the ownership andcontrol of the company and run the same as a going concern the financial statements havebeen presented on a "going Concern" basis.
Our responsibility is to express an opinion on these Ind AS financial statements basedon 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 Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind ASfinancial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven 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 including the Ind AS of the financialposition of the Company as at 31 March 2019 and its financial performance includingother comprehensive income its cash flows and the changes in equity for the year ended onthat 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 section 143(11) of the Act we givein the Annexure A a statement on the matters specified in the paragraph 3 and 4 of theorder.
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 the statement of cash flowsand the statement of changes in equity dealt with by this Report are in agreement with thebooks of account;
(d) in our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant rule issuedthereunder;
(e) on the basis of the written representations received from the directors as on 31March 2019 none of the directors is disqualified as on 31 March 2019 from being appointedas a director in terms of Section 164 (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"; and
(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 litigation which would major impact on itsfinancial position.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
|For KPND & Co. |
|CHARTERED ACCOUNTANTS |
|FRN : 133861W |
|NILESH J. DHAMECHA |
|Membership No: 143172 |
|Date : 23rd May 2019 |
|Place : Mumbai |