To the Members of HINDOOSTAN MILLS LIMITED Opinion
We have audited the accompanying Ind AS financial statements of Hindoostan MillsLimited ("the Company") which comprises the Balance Sheet as at March 31 2019the Statement of Profit and Loss (including Other Comprehensive Income) Statement ofChanges in Equity and Statement of Cash Flows 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 Ind AS financial statements give the information required bythe Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Companies (Indian Accounting Standards) Rules 2015as amended (Ind AS) and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and loss total comprehensiveincome the changes in equity 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 Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute 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 made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficientand appropriateto provide a basis for our opinion on the financial statements.
Key Audit Matters
Key Audit Matters are those matters that in our professional judgement were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and informing our opinion thereon and we do not provide a separate opinion onthese matters.
|Key Audit Matters ||Auditor's Response |
|Assets Held for Sale: ||Principal Audit Procedure: |
|During the year Company has discontinued its operations of Composite Division effective from 30th June 2018. Barring unforeseen circumstances the management expects to sales of the Assets of the said division either in whole or substantially the whole or in parts. Assets of the said division have been reclassified as "Assets Held for Sale" at their respective written down value or net realizable value whichever are lower and accordingly Rs.356.51 lacs has been recognised as Impairment Loss. ||We have relied upon the valuation reports provided by the management for net realisable value considered in calculation of Impairment of Assets Held for Sale. |
|The Company has received a demand for Rs. 360.72 lakhs (demand) vide notice dated 29th December 2018 from the Stamp Office Mumbai relating to Amalgamation of the Hindoostan Spinning and Weaving Mills Limited with Sirdar Carbonic Gas Company Limited. The said demand is determined at 10% of the market value of the equity shares of Hindoostan Spinning and Weaving Mills Limited as on 1st April 2010 being the date of amalgamation as stated above. However the Company is of the view that the stamp duty (duty) ought to be the higher of 0.7% of the market value of equity shares or 5% of the value of immovable property transferred. ||The Company has provided Rs. 25.25 lakhs on an estimated basis being the higher of 0.7 % of Market value of equity shares or 5% of the value of immovable property transferred. The shortfall in such estimation of Stamp Duty if any will be adjusted in the year in which the liability crystallises. The balance Demand of Rs. 335.47 lakhs (Rs. 360.72 lakhs - Rs. 25.25 Lakhs) has been treated as a Contingent Liability being claim against the company not acknowledge as debt. |
|Other Financial Liabilities include Fraction Coupons payable aggregating to Rs. 0.92 lakhs being dues to shareholders of erstwhile Hindoostan Spinning and Weaving Mills Ltd. which amalgamated with Sirdar Carbonic Gas Co. Ltd. on 1st April 2010. Though the Company had discharged its liability on 25th January 2012 cheques aggregating to Rs. 0.92 lakhs were not presented by recipient for payment and hence became stale on 23rd July 2012. ||The Company has transferred Rs. 0.92 lakhs to the Investor Education and Protection Fund on 17th May 2019. |
Responsibilities of Management and those charged with governance for the Ind ASfinancial statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Ind AS financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 Ind AS financial statementthat give a true and fair view and are free from material misstatement whether due tofraud or error.
In preparing the Ind AS financial statements management is responsible for assessingthe Company'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 thecompany's financial reporting process.
Auditor's Responsibilities for the Audit of Ind AS Financial Statement
Our objectives 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 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 Ind AS 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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial 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 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 the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter 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 by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure "A" a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by section 143(3) of the Act based on our audit 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 Profit and Loss (Including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowdealt with by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Account) Rules 2014.
(e) On the basis of the written representations received from the directors as on 31stMarch 2019 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 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 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 the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provision 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 knowledge and belief and according to the information andexplanations given to us:
(i) The company has disclosed the impact of pending litigations on its financialposition in its financial statements
Refer to NoteNo. 33 Point No. II(A) II(B) and II(C) of other notes to the financialstatements.
(ii) The Company does not have any long-term contracts including derivative contractsfor which there could be any material foreseeable losses and hence the question of makingprovision for such losses does not arise.
(iii) Attention is drawn to Note No. 33(XIII) of other notes to the financialstatements relating to transfer of the amount of fraction coupons payable to InvestorEducation and Protection Fund account.
|For M. A. Parikh & Co. |
|Chartered Accountants |
|(Firm's Registration No. 107556W) |
|MUKUL M. PATEL |
|Membership No. 032489 |
|Place: Mumbai |
|Date : 17th May 2019 |