TO THE MEMBERS OF HYTONE TEXSTYLES LIMITED
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Hytone TexstylesLimited (the Company') which comprise the balance sheet as at 31st March2018 the statement of profit and loss including the statement of Other ComprehensiveIncome the Statement of Changes in Equity and the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.(herein after referred to as Ind AS Financial Statements)
MANAGEMENT'S RESPONSIBILITY FOR THE Ind AS 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 preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance including other comprehensive incomecash flows and changes in equity of the Company in accordance with Indian AccountingStandards (Ind AS) prescribed under Section 133 of the Act read with 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 financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.
In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.
We have conducted the audit in accordance with the Standards on Auditing specifiedunder Section 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 financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. 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. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of theInd AS financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of the accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation of the Ind AS standalone financial 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 standalone financial statements give the information requiredby the 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 2018 and its loss total comprehensive income the changes inequity and its cash flows for the year ended on that 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 sub-section (11) of section 143 ofthe Act I give in the "Annexure A" a statement on the matters specified in theparagraph 3 and 4 of the order.
2. As required by Section 143 (3) of the Act I 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 including Statement of 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 Ind AS standalone financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act read withCompanies (Indian Accounting Standard) Rules 2015 as amended.
(e) on the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors aredisqualified as on 31st March 2018 from being appointed as a director in termsof 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 has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note 29 to the financial statements;
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 were no amounts which were required to be transferred to the InvestorEducation and Protection Fund;
Annexure - A to the 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 31st March 2018 wereport that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) We were informed that these fixed assets are physically verified by the managementat regular intervals which in our opinion is reasonable having regards to size of theCompany and the nature of its assets. No material discrepancies between book records andphysical assets were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) The inventory has been physically verified by management during the current year.In our opinion the frequency of such verification is reasonable. The discrepanciesnoticed on physical verification of inventory as compared to book records were notmaterial.
(iii) According to the verification of books and records and the information andexplanation given to me the Company has not given any loan secured or unsecured toCompanies firms or other parties listed in the register maintained under section 189 ofthe Act. Hence clause (iii) of paragraph 3 of the said order is not applicable.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 186 of the Act with respect to theinvestments made. During the year under consideration the company has not directly orindirectly
a) given any loan to any person or other body corporate other than usual advancesenvisaged in a contract of supply of materials if any
b) given any guarantee or provided security in connection with a loan to any other bodycorporate or person and
c) acquired by way of subscription purchase or otherwise the securities of any otherbody corporate exceeding sixty percent of its paid-up share capital free reserve andsecurities premium account or one hundred percent of its free reserves and securitiespremium account whichever is more.
(v) The Company has not accepted any deposits from the public. Hence clause (v) ofparagraph 3 of the said order is not applicable.
(vi) During the period under review there is no manufacturing activity carried on bythe Company so no cost records as prescribed by the Central Government under sub-section(1) of section 148 of the Act are required to be maintained.
(vii) (a) According to the information and explanations given to us and based on therecords examined by us the Company has been generally regular in depositing undisputedstatutory dues including provident fund Employee's State Insurance Income Tax SalesTax Wealth Tax Service Tax Value Added Tax Custom Duty Excise Duty Cess and othermaterial statutory dues as and wherever applicable to the Company with appropriateauthorities and no dues remain outstanding for a period of more than six months from thedate they became payable except the following:-
|Name of the Statute ||Nature of the Dues ||Amount (Rs.) ||Period to which the amount relates |
|Navi Mumbai Municipal Corporation ||Property Tax ||15919702/- ||From 2005 to 2012 |
|M.I.D.C. ||Water Tax ||146484/- ||From 2005 to 2011 |
(b) According to the information and explanations given to us and based on the recordsof the Company examined by us there are no dues of Income Tax Sales Tax Wealth TaxService Tax Value Added Tax Custom Duty Excise Duty and cess which have not beendeposited on account of any dispute.
|Name of the statute ||Nature of dues ||Amount (in Rs) ||Period to which the amount relates ||Forum where dispute is pending |
|Maharashtra Municipal Corporation Act 1949 ||Property Tax ||20906332 ||From 2005 to 2012 ||Assessor and Collector Navi Mumbai Municipal Corporation |
(viii) The Company has not defaulted in repayment of loans or borrowings from anyfinancial institution banks government or debenture holders during the year.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.
(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.
(xi) According to the information and explanations given to us and based on theexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on theexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations given to us and based on theexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on theexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Annexure - B to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of HytoneTexstyles Limited ("the Company") as of 31st March 2017 inconjunction with the 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 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 Institute of Chartered Accountants of India (ICAI'). 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.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We have conducted the audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
The audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. The audit of internal financial controls over financial reporting includedobtaining 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 judgment including the assessment of the risks ofmaterial misstatement of the financial 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 reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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 Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting 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 conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2018based on 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.
| ||For UKG & Associates |
| ||Chartered Accountants |
| ||Champak K Dedhia |
|Place : Mumbai ||Partner |
|Date : 30th May 2018 ||Membership No: 101769 |