The Members of High Street Filatex Ltd.
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of High Street FilatexLtd.("the Company") which comprise the Balance Sheet as at 31st March 2020 andthe Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and Cash Flow Statement for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2020 and its loss and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter paragraph
Attention has to be drawn to Note No. 38 to the financial statements regarding theuncertainties arising out of the outbreak of COVID-19 pandemic and the assessment made bythe management on its business and financials including valuation of assets policyliabilities and solvency for the year ended 31st March 2020 this assessmentand the outcome of the pandemic is as made by the management and is highly dependent onthe circumstances as they evolve in subsequent periods.
Our opinion is not modified on the above matter.
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. The Annual Report is expectedto be made available to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.
On the auditor's report date we have nothing to report in this regard due to theAnnual Report expected to be made available to us after the date of this auditor's report.
Responsibilities of Management for 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 financial statements that give a true and fair view of the financial positionfinancial performance of the Company in accordance with the accounting principlesgenerally accepted in India including the accounting Standards specified under section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of 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 financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the 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 detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or 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 section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness 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 going concernbasis 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 financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the financialstatements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify 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 relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
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 specified inparagraphs 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 thebest of 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 bythe 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 Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
e) On the basis of the written representations received from the directors as on31st March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 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 overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B".
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
h) 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 financial statement. Refer note 28 to the Financial Statements
ii. The Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
Annexure -A to the Independent Auditor's Report of even date to the members of HighStreet Filatex Ltd. on the financial statements for the year ended 31 March 2020
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
(b) The fixed assets have been physically verified by the management during the yearand no material discrepancies were noticed on such verification. In our opinion thefrequency of verification of the property plant and equipment is reasonable having regardto the size of the Company and the nature of its assets. However we have not beenprovided any documents for the same.
(c) The title deeds comprising all the immovable properties of land and buildingswhich are freehold (which are included under the head fixed assets') are held inthe name of the Company as at the balance sheet date.
(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies between physical inventory andbook records were noticed on physical verification. However we have not been provided anydocuments for the same.
(iii) The Company hasn't 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. Accordingly Paragraph 3(iii) of the order is notapplicable.
(iv)The Company has not granted loans investments and guarantees under the provisionsof Section 185 and 186 of the Companies Act. Accordingly Paragraph 3(iv) of the order isnot applicable.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly Paragraph 3(v) of the order is not applicable.
(vi) The Company is not required to maintain cost records under Section 148 (1) of theAct. Accordingly Paragraph 3(vi) of the order is not applicable.
(vii)(a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax goods and services tax duty of customsduty of excise value added tax cess and other statutory dues as applicable have beenregularly deposited to the appropriate authorities. There are no undisputed amountspayable in respect thereof were outstanding at the year-end for a period of more than sixmonths from the date they became payable.
(b) There are no dues of income tax sales-tax service tax goods & service taxduty of custom duty of excise and value added tax that have not been deposited with theappropriate authorities on account of any dispute except
-A Demand of Rs.142048 raised by Land & Building Tax Deptt has not beendeposited by the Company as the same is disputed and matter is being contested inappropriate court as informed by management.
-A demand of Rs. 184070 raised by ESI Deptt. On account of factory was closed fromOctober 2007 to December 2008. This demand has been challenged by Company in appropriatecourt as informed by management.
Company has deposited a sum of Rs. 92035 from above demand under protest to ESI Deptt.
(viii) The Company does not have any loans or borrowing from any Financial InstitutionBanks Government or Debenture holders during the year. Accordingly Paragraph 3(viii) ofthe order is not applicable.
ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instrument) and term loan.
(x) We have neither come across any instance of material fraud by the Company or on theCompany by its officers or employees noticed or reported during the year nor have we beeninformed of any such case by the Management.
(xi) Management remuneration has been paid by the Company in accordance with therequisite approvals mandates by the provision of section 197 of the Act read with scheduleV to the Act.
(xii) The Company is not a Nidhi Company. Accordingly Paragraph 3(xii) of the order isnot applicable.
(xiii) All transactions with the related parties are in compliance with Section 188 and177 of Companies Act 2013 where applicable and the details have been disclosed in theFinancial Statements etc. as required by the accounting standards and Companies Act 2013.
(xiv) The Company has not made any preferential allotment / private placement of sharesor fully or partly convertible debentures during the year.
(xv) The Company has not entered into any non-cash transactions with directors orpersons connected with him.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Annexure- B to the Independent Auditor's Report of even date to the members of HighStreet Filatex Ltd. on the financial statements for the year ended 31 March 2020
Independent Auditor Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
1. In conjunction with our audit of the financial statements of High StreetFilatexLtd.(the Company') as at and for the year ended 31 March 2020 we haveaudited the internal financial controls over financial reporting of the Company as at thatdate.
Management's Responsibility for Internal
2. The Company's Board of Directors 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 (the "Guidance Note") issued by the Institute of CharteredAccountants of India ("ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of the Company's businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
3. Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Standards on Auditing issued by the ICAI and deemed to be prescribedunder Section 143(10) of the Act to the extent applicable to an audit of Internalfinancial controls over financial reporting and the Guidance Note issued by the ICAI.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 were established and maintained and if suchcontrols operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includesobtaining 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 financial statements whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols over financial reporting
Meaning of Internal Financial Controls Over
6. A Company's internal financial controls over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial controls overfinancial reporting include those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions 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 authorisations of management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial
Controls Over Financial Reporting
7. 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 financialcontrols over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such controls were operating effectivelyas at 31 March 2020 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.