To the Members of
Mayur Uniquoters Limited
Report on the audit of the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Mayur UniquotersLimited ("the Company") which comprise the Balance Sheet as at March 31 2020and the 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 thestandalone financial statements including a summary of significant accounting policiesand other explanatory information.
2. 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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2020 and total comprehensive income(comprising profit and other comprehensive income) changes in equity and its cash flowsfor the year then ended.
Basis for opinion
3. 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 Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Emphasis of matter
4. We draw your attention to Note 38 to the standalone financial statements whichdescribes the management's assessment of the impact of the outbreak of Coronavirus(Covid-19) pandemic on the business operations of the Company. The management believesthat no adjustments other than those already considered are required in the financialstatements as it does not impact the current financial year however in view of thevarious preventive measures taken (such as complete lock-down restrictions by theGovernment of India travel restrictions etc.) and highly uncertain economic environmenta definitive assessment of the impact on the subsequent periods is highly dependent uponcircumstances as they evolve.
Our opinion is not modified in respect of this matter.
Key audit matters
5. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters 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 matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Recoverability of trade receivables ||Our audit procedures included the following: |
|(Refer Notes 1(j) 1(l)(iii) 2 10 and 48(A) of the standalone financial statements) || Obtained an understanding of the processes for evaluating the recoverability of trade receivables including collection process and the allowances for impaired trade receivables. |
|The standalone financial statements of the Company included trade receivable of Rs. 13863.80 lakhs as at March 31 2020 net of allowances for impairment amounting to Rs. 445.79 lakhs. Management estimated the level of expected losses by assessing future cash flows for each group of trade receivables including a probability weighted amount determined by evaluating a range of possible outcomes based on twelve month rolling historical credit loss experience by customer segment geographical region tenure and type of customer and applying to the receivables held at year end. The impact of economic factors both current and future is considered in assessing the likelihood of recovery from customers. || Tested the design implementation and operating effectiveness of relevant internal controls relating to collection of trade receivables |
|This matter was identified as a key audit matter due to the significant judgement involved. || Evaluated reasonableness of the method and assumptions and judgements used by the management with respect to recoverability of trade receivables. |
| || Assessed the profile of trade receivables and the economic environment applicable to these debtors. |
| || Evaluated the appropriateness of the simplified approach applied by the Group to identify lifetime expected credit losses. In doing so obtained the schedule of receivables ageing enquired into aged balances and assessed management's explanation for collectability. Also tested the management's working for provision for expected credit losses. |
| || Verified receipts from debtors subsequent to the financial year-end relating to trade receivable balances as at March 31 2020 with bank statements and relevant underlying documentation for selected samples. |
| || Evaluated the appropriateness of the presentation and disclosures made in the financial statements. |
| ||Based on the procedures as mentioned above management's assessment regarding trade receivables are supported by the available evidence. |
6. 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 standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone 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 this regard.
Responsibilities of management and those charged with governance for the standalonefinancial statements
7. 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 standalone financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows 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 standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
8. In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.
Auditor's responsibilities for the audit of the standalone financial statements
9. Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
10. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
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 Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting 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 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 standalone 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 conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
11. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
12. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
13. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on other legal and regulatory requirements
14. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the "Annexure B" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
15. 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 (including Other ComprehensiveIncome) the Statement of Changes in Equity and Cash Flow Statement dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.
f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure A".
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 standalone financial statements Refer Note 40 to the standalonefinancial statements;
ii. The Company did not have any derivative contracts and in respect of long-termcontracts there are no material foreseeable losses as at March 31 2020.
iii. Except as referred to in Note 54 to the Standalone financial statements there hasbeen no delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2020.
16. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.
Annexure A to Independent Auditors' Report
Referred to in paragraph 15 (f) of the Independent Auditors' Report of even date to themembers of Mayur Uniquoters Limited on the standalone financial statements for the yearended March 31 2020
Report on the Internal Financial Controls with reference to financial statements underClause (i) of Sub-section 3 of Section 143 of the Act
1. In conjunction with our audit of the standalone financial statements of the Companyas of and for the year ended March 31 2020 we have audited the internal financialcontrols with reference to financial statements of Mayur Uniquoters Limited (hereinafterreferred to as "the Company").
Management's Responsibility for Internal Financial Controls
2. 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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the ICAI and the Standardson Auditing deemed to be prescribed under Section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of internal financial controls and both issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to financial statements was established and maintained and if such controlsoperated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.
5. 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 systemwith reference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
6. A Company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial controlswith reference to financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.
Inherent Limitations of Internal Financial Controls with reference to financialstatements
7. Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 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. Also refer paragraph 4 of themain audit report.
Annexure B to Independent Auditors' Report
Referred to in paragraph 14 of the Independent Auditors' Report of even date to themembers of Mayur Uniquoters Limited on the standalone financial statements as of and forthe year ended March 31 2020
i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of property plant and equipment (fixed assets).
(b) The property plant and equipment (fixed assets) are physically verified by theManagement according to a phased programme designed to cover all the items over a periodof three years which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the programme a portion of theproperty plant and equipment (fixed assets) has been physically verified by theManagement during the year and no material discrepancies have been noticed on suchverification.
(c) The title deeds of immovable properties as disclosed in Note 3 a) on propertyplant and equipment (fixed assets) to the financial statements are held in the name ofthe Company including those relating to Gwalior land and Dhodsar land which are pledgedwith the bank.
ii. The physical verification of inventory (excluding stocks lying with third parties)have been conducted at reasonable intervals by the Management during the year. Alsophysical verification of inventory has been carried out by the management subsequent tothe year-end due to the lockdown restrictions imposed by the Government of India for whichroll-back procedures have been performed to determine the existence and condition ofinventory as at the year-end. In respect of inventory lying with third parties these havesubstantially been confirmed by them. The discrepancies noticed on physical verificationof inventory as compared to book records were not material.
iii. The Company has not granted any loans secured or unsecured to Companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.
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 Companies Act 2013 inrespect of the investments made. The Company has not granted any loans or provided anyguarantees or security to the parties covered under Section 185 and 186 of the CompaniesAct 2013. Therefore the provisions of Clause 3(iv) of the said Order to that extent arenot applicable to the Company.
v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.
vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We havenot however made a detailed examination of the records with a view to determine whetherthey are accurate or complete.
vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of provident fund employees' state insurance incometax duty of customs goods and service tax and professional tax with the appropriateauthorities though there has been a slight delay in a few cases. Also Refer Note 40 (ii)to the standalone financial statements regarding management's assessment on certainmatters relating to provident fund.
(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of duty of customs and goods and service taxwhich have not been deposited on account of any dispute. The particulars of dues of incometax and textile committee cess as at March 31 2020 which have not been deposited onaccount of a dispute are as follows:
|Name of the statute ||Nature of dues ||Amount involved (Rs. in lakhs) ||Amount paid under protest (Rs. in lakhs) ||Amount unpaid (Rs. in lakhs) ||Period to which the amount relates ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income Tax ||1.98 ||1.98 ||- ||Assessment Year 2012-13 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act 1961 ||Income Tax ||149.56 ||25.00 ||124.56 ||Assessment Year 2013-14 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act 1961 ||Income Tax ||21.66 ||6.55 ||15.11 ||Assessment Year 2016-17 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act 1961 ||Income Tax ||0.99 ||0.20 ||0.79 ||Assessment Year 2017-18 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act 1961 ||Income Tax ||3.76 ||0.75 ||3.01 ||Assessment Year 2018-19 ||Commissioner of Income Tax (Appeals) |
|Textile Committee (Cess) Rules 1975 ||Textile Committee Cess ||7.69 ||- ||7.69 ||Financial Year 1994-95 to 2002-03 ||Textile Cess Appellate Tribunal |
|Total || ||185.64 ||34.48 ||151.16 || || |
viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto banks as at the balance sheet date. The Company does not have any loans or borrowingsfrom any financial institution or Government nor has it issued any debentures as at thebalance sheet date.
ix. In our opinion and according to the information and explanations given to usexcept for Rs. 122.87 lakhs remaining un-utilised as at the year end the moneys raised byway of term loans have been applied for the purposes for which they were obtained. TheCompany has not raised any moneys by way of initial public offer and further public offer(including debt instruments). Accordingly the provisions of Clause 3(ix) of the Order tothat extent are not applicable to the Company.
x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.
xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct. Also refer paragraph 16 of our main audit report.
xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting Standard (Ind AS) 24 Related Party Disclosures specified under Section 133 oftheAct.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with him.
Accordingly the provisions of Clause 3(xv) of the Order are not applicable to theCompany.
xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.
|Place: Gurugram ||For Price Waterhouse Chartered Accountants LLP |
|Date: June 29 2020 ||Firm Registration Number: 012754N/ N500016 |
| ||Chartered Accountants |
| ||Anurag Khandelwal |
| ||Partner |
| ||Membership Number: 078571 |
| ||UDIN : 20078571AAAABD1709 |