To The Members
MINAXI TEXTILES LIMITED
Report on Audit of the Financial Statements
We have audited the accompanying financial statements of MINAXI TEXTILES LIMITED ('thecompany') which comprise the Balance Sheet as at March 31 2021 the Statement of Profitand Loss (including Other Comprehensive Income) the Statement of Changes in Equity andthe Statement of Cash Flows for the year then ended and a summary of significantaccounting policies and other explanatory information (hereinafter referred to as the"financial statements").
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 theCompanies Act 2013 (the "Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and its profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing ("SA"s) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India ("ICAI") together with the ethicalrequirements 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 obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
Emphasis of Matter:
We draw your attention to Note 33 to the Financial Statements which describes theuncertainties and the impact of COVID -19 pandemic on the Company's Operations and resultsas assessed by the Management. Our report is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.There are no separate key audit matters to be communicated in our report.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included Board's Reportincluding Annexure to Board's Report but does not include the financial statements andour auditor's report thereon. The other information is expected to be made available to usafter the date of this auditor's report.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit ofthe financialstatements our responsibilityisto read theotherinformation and in doing so consider whether the other information is materiallyinconsistentwiththe financial statements or our knowledge obtained during the course ofour audit or otherwise appears to be materially misstated.
Management's Responsibility for the Financial 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 financial statements that givea true and fair view of the financial position financial performance including othercomprehensive 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible for assessing theCompany's abilityto continue as a going concern disclosing as applicablematters relatedto goingconcern and usingthegoingconcernbasis of accounting unless management eitherintends to liquidate the Company or to cease operations or has no realistic alternativebut to do so.
The Board of Directors is responsible for overseeing the Company's financial reportingprocess.
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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness 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 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 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 standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.
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 compliedwithrelevantethical 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 Section 143(3) of the Act we report that:
a. We have sought and obtained all the information and explanation which to the best ofour knowledge and belief were necessary for the purpose 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 form our examination of those books.
c. The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Cash Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d. In our opinion the aforesaid financial statements comply with Ind AS prescribedunder section 133 of the Act.
e. On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) ofthe 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-A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
g. With respect to the other matters to be includedinthe Auditor'sReportin accordancewith the requirements of section 197(16) of the Act as amended:
The company has not paid Managerial Remuneration to its Directors during the year andhence reporting under section 197 of the Act is not applicable to the Company.
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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations as at March 31 2021 inits Ind AS financial statement. (note 27)
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses. (note 28)
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of section (11) of section 143 of theCompanies Act 2013 we give in the Annexure B a statement on the matters specifiedin paragraphs 3 and 4 of the order.
Annexure- A to Independent Auditors' Report
(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements' section of our report to the Members Minaxi Textiles Limited of even date)
Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the Internal Financial Controls over financial reporting of MinaxiTextiles Limited (the "Company") as on March 31 2021 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit or Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (the"ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") issued by the ICAI and the Standard on Auditingprescribed under section 143(10) of the Companies Act 2013 to the extent applicable to anaudit of internal financial controls. Those Standards and Guidance Note require that wecomply with the ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our 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 the internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of risks ofmaterial misstatement of 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 controls over financial reporting is a process designedto provide reasonable assurance regarding the reliability offinancial reporting and thepreparation of financial statements for external purpose 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) Provide reasonable assurance that transaction are recorded as necessary to permitpreparation of financial statement in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitation 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 projection of any evaluation of the internal financial controls over financial reportingto future periods are subjects to the risk that the internal financial controls overfinancial reporting may become inadequate because of changes in conditions or the degreeof compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the criteria forinternal financial control over financial reporting established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.
Annexure-B to Independent Auditors' Report
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Minaxi Textiles Limited of evendate)
1. In respect of Fixed Assets:
a. The Company is in process of updating proper records showing full particularsincluding quantitative details and situation of its fixed assets.
b. According to information and explanations given to us the Fixed Assets of theCompany have been physically verified by the management periodically and no materialdiscrepancies have been noticed on such physical verification.
c. According to information and explanations given to us and on the basis of ourexamination of records of the company the title deeds of immovable properties other thanthe self constructed immovable property (buildings) as disclosed in the fixed assets tothe financial statements are held in the name of company.
d. In respect of immovable properties of land that have been taken on lease anddisclosed as fixed asset in the financial statements the lease agreements are in the nameof the Company where the Company is the lessee in the agreement.
2. As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on physicalverification.
3. Company has not granted any loans secured or unsecured to companies firmslimited liability partnership or other parties covered in the Register maintained underSection 189 of the Companies Act 2013 and therefore the provisions of clause (iii) ofthe Order are not applicable to the company.
4. In our opinion and according to the information and explanations given to us theCompany has not granted any loans or provided any guarantees or security in respect of anyloans to any party covered under the Section 185 of the Act. The company has not givenguarantees or provided security requiring compliance under section 185 or 186 of the Act;hence clause (iv) of the order is not applicable to the Company.
5. During the year the company has not accepted any deposits from public within themeaning of provisions of section 73 to 76 of the Companies Act 2013 and the rules framedthereunder and therefore the provisions of clause (v) of the Order are not applicable tothe company.
6. As per Information and explanation given by the company the central government hasnot prescribed the maintenance of cost records under Section 148(1) of the Act hencereporting of clause (vi) of the Order are not applicable to the company.
7. In respect of Statutory Dues:
a. According to the information and explanations given to us and the records examinedby us the Company is generally regular in depositing undisputed statutory dues includingIncome Tax Goods and Service Tax Custom duty and any other statutory dues with theappropriate authorities applicable to it. According to the information and explanationsgiven to us there are no undisputed dues payable in respect of above as at 31stMarch 2021 for a period of more than six months from the date on which they becamepayable except Gratuity Liabilities of Rs 3071665/-
b. According to the records of the company and on the basis of the information andexplanations given to us the details of disputed statutory dues of income tax which havenot been deposited asat March 31 2021 on account of dispute is as under:
|Nature of Statute ||Nature of Dues ||Forum where the dispute is pending ||Period to which amount relates ||Amount (Rs.) |
|The Income Tax Act 1961 ||Income Tax ||Commissioner (Appeals) - Gandhinagar ||F.Y. 2017-18 ||244370 |
* The company has filed application under Income Tax Vivaad Se Vishwas Scheme and thesame is pending.
8. According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to any financial institutions or bank but however delay in repayment of dues ofbank and financial institutions were observed during the year. The company has not issuedany debentures during the year or in the preceding year.
9. In our opinion and on the basis of information and explanations given to us thecompany has not raised money by way of initial public offer or further public offer(including debt instruments) and the term loans were utilized for the purpose they wereraised.
10. To the best of our knowledge and according to the information and explanationsgiven to us we have neither come across any instance of material fraud by the Company oron the Company byits officers or employees noticed or reported during the year nor havewe been informed of any such case by the Management.
11. The Company has not paid/provided for managerial remuneration during the year andtherefore reporting under clause (xi) of the Order is not applicable.
12. The company is not a Nidhi company and hence reporting under clause (xii) of theOrder is not applicable.
13. In our opinion and according to the information and explanations given to us theCompany is in compliance with Sections 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the Ind AS financial statements etc. as required bythe applicable accounting standards.
14. The Company has not made any preferential allotment or Private placement of sharesof fully or partly convertible debentures during the year under review and hence reportingunder clause (xiv) of the Order is not applicable to the Company.
15. The Company has not entered into any non cash transactions with Directors orpersons connected with them and hence provisions of section 192 of the Companies Act 2013are not applicable.
16. According to the information and explanations given to us the Company is notrequired to be registered u/s. 45-IA of the Reserve Bank of India Act 1934.