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Mirza International Ltd.

BSE: 526642 Sector: Others
NSE: MIRZAINT ISIN Code: INE771A01026
BSE 00:00 | 14 Oct 64.05 -0.65
(-1.00%)
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65.00

HIGH

66.60

LOW

63.80

NSE 00:00 | 14 Oct 64.20 -0.45
(-0.70%)
OPEN

65.15

HIGH

66.60

LOW

63.85

OPEN 65.00
PREVIOUS CLOSE 64.70
VOLUME 111445
52-Week high 69.35
52-Week low 42.95
P/E 18.35
Mkt Cap.(Rs cr) 771
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 65.00
CLOSE 64.70
VOLUME 111445
52-Week high 69.35
52-Week low 42.95
P/E 18.35
Mkt Cap.(Rs cr) 771
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mirza International Ltd. (MIRZAINT) - Auditors Report

Company auditors report

To

The Members of Mirza International Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of Mirza InternationalLimited ("the Company") which comprise the Balance Sheet as at March 31 2019the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the significant accounting policies and other explanatory information. Unit 8and Unit 9 at Plot No 18 &19 Nandnagar Industrial Estate Kashipur have been auditedby branch auditors of the company which are included in the financial statement for theyear ended on that date (hereinafter referred to as "the standalone financialstatements").

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 Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 the 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 standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made there under 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 sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Key audit matters

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.

S. No. Key Audit Matter
1. Inventory is carried in the Financial Statements at the lower of cost and net realisable value. There is substantial increase in case of Inventory is carried in the Financial Statements at the lower of cost and net realisable value. Since the company is dealing in footwear apparel and accessories sales in the fashion industry can be extremely volatile with consumer demand changing significantly based on current trend. As a result the carrying value of inventory may exceed in net realisable value.
Auditor's Response
We have designed the procedure to challenge the adequacy and effectiveness of the Company's provisions against inventory our procedures included:
Testing classification Testing on a sample basis that items on the stock ageing listing were classified in the appropriate ageing bracket by reference to season;
Historical trends of the company & market: evaluated the current year provision by assessing historical trends. We examined the Company's historical trading patterns of inventory sold at full price and inventory sold below full price due to discount and season offers through alternative clearance routes together with the related margins achieved for each channel. We used the information on trading patterns to assess whether the provisions held have historically been set at an appropriate level; and
Our understanding on the Company Business: based on our knowledge of the Company and the market the appropriateness of the provision percentages applied by challenging the assumptions made by the Directors on the extent to which older season inventory can be sold through various channels.

Information Other than the Standalone 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 in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Shareholder's Information but does not include the standalone financialstatements and our auditor's report thereon. These reports are expected to be madeavailable to us after the date of this audit report.

Our opinion on the standalone financial statements does not cover the other informationand we will not express any form of assurance conclusion thereon. In connection with ouraudit of the standalone financial statements our responsibility is to read the otherinformation identified above when it becomes available and in doing so consider whetherthe other information is materially inconsistent with the standalone financial statementsor our knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information; we are required to communicate the matterto those charged with governance.

Management's Responsibility for the Standalone 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 standalone 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.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

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.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

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.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also identify and assess therisks of material misstatement of the standalone financial statements whether due tofraud or error design and perform audit procedures responsive to those risks and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. Therisk of not detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control.

Obtain an understanding of internal controls relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 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 over all presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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 financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the 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 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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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.

Other Matters

We did not audit the financial statements / information of Unit 8 and Unit 9 situatedat Plot No 18 &19 Nandnagar Industrial Estate Kashipur included in the standaloneInd AS financial statements of the Company whose financial statements reflect total assetsof Rs 2904.39 lakh as at 31st March 2019 and total revenues of Rs 1287.42 lakh for theyear ended on that date as considered in the financial statements / information of theseunits have been audited by the branch auditors whose reports have been furnished to usand our opinion in so far as it relates to the amounts and disclosures included in respectof branches is based solely on the report of such branch auditors.

Our opinion is not modified in respect of these matters.

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 in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder

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 and proper financialstatements adequate for the purposes of our audit have been received from the branches notvisited by us.

The Reports on the accounts of the two units (Unit 8 & 9) of the Company auditedunder section 143(8) of the Act by Branch Auditor has been sent to us and have beenproperly dealt with by us in preparing this Report.

(c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account and with the financialstatements received from the branches not visited by us.

(d) In our opinion the aforesaid standalone financial statements comply with the IndAS specified 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 on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(g) With respect to other matter to be included in the auditor's report in accordancewith the requirements of the section 197 (16) of the Act as amended; In our opinion andto 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 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 on its financialposition in its standalone financial statements. Refer Note No. 27.

ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

ii. There is no any delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

For D R A & Co.
Chartered Accountants
FRN:006476N
CA Himanshu Singh
Place: Kanpur Partner
Date: May 30 2019 M.No.: 41857

Annexure ‘A' to the

Independent Auditor's Report

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatorRequirements' section of our report to the Members of Mirza International Limited of evendate)

i. In respect of the Company's fixed assets :

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed asset

(b) The Company has a program of verification to cover all the items of fixed assets ina phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds / registered sale deed provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company except given below as atthe balance sheet date.

In case of land:-

Total number of cases are two (Unit-II & Hapur) land which are freehold.

Gross block Rs 90.11 Lakh and net block Rs 90.11 Lakh as at Balance Sheet date

Remarks: Although the company has initiated the process of mutation for transfer oftitle deeds in the name of company still in the above two cases the Mutation is pendingto be done. Title is held in the old name of company.

In respect of immovable properties of land and building that have been taken on leaseand disclosed as fixed assets in the standalone financial statements the lease agreementsare in the name of company.

ii. The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.

iii. The Company has not granted any loans secured or unsecured to any companiesfirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Act. Accordingly the provisions of clause 3(iii)(a) (b) and (c)of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of Sections 185 and 186 of the Act in respectof grant of loans making investments and providing guarantees and securities asapplicable.

v. The Company has not accepted deposits from public during the year.

vi. Cost records prescribed by the Central Government in terms of provisions ofclause (1) of Section 148 of the Act are being maintained by the company. We havehowever not made a detailed examination of the records with a view to determine whetherthey are accurate or complete.

vii. According to the information and explanations given to us in respect ofstatutory dues :

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods and Service TaxCustoms Duty Cess and other material statutory dues applicable to it with the appropriateauthorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods and Service Tax Customs Duty Cess and other materialstatutory dues in arrears as at March 31 2019 for a period of more than six months fromthe date they became payable.

(c) Details of dues of Income Tax Sales Tax Service Tax Excise Duty and Value AddedTax which have not been deposited as at March 31 2019 on account of dispute are givenbelow:

Nature of the Statute Nature of dues Amount Period to which the amount relates Forum where Dispute is Pending
in Rs Lakh
UP Entry Tax Act 2007 Entry Tax 4.06 1999-2000 Hon'ble High Court Allahabad
UP VAT Act-2008 & CST Act-1956 VAT & CST 9.75 2008-09 Jt. Commissioner Corporate Circle -2 Commercial Tax Department Kanpur
UP VAT Act-2008 & CST Act-1956 VAT & CST 63.21 2015-16 Additional Commissioner Grade-2 Appeal Commercial Tax Department Kanpur
Gujarat VAT VAT 37.27 2009-10 Deputy Commissioner (Appeal) Ahmedabad
2010-11
2011-12
West Bengal VAT & CST Act CST 2.48 2011-12 West Bengal Commercial Appellant Revision Board Kolkata
Kerla VAT VAT 3.44 2012-13 Deputy Commissioner Appeal-II Ernakulam Kerla
Chapter V of Finance Act1994 i.e. Service Tax Service Tax 15.45 2009-10 CESTAT Allahabad

viii. On the basis of information we are of the opinion that the company has notdefaulted in repayment of loans or borrowing to a financial institutions banks orGovernment. Further the company has not issued any debentures.

ix. The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments). However term loan raised by the company duringthe year has been applied for the purpose for which they were raised.

x. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no any fraud on the Company by its Officers oremployees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to usthe Company has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) ofthe Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 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 standalone financial statements as required by theapplicable accounting standards.

xiv. During the year the Company has not made any preferential allotment orprivate placement of shares or fully or partly paid convertible debentures and hencereporting under clause 3 (xiv) of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

xvi. The Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.

For D R A & Co.
Chartered Accountants
FRN:006476N
CA Himanshu Singh
Place: Kanpur Partner
Date: May 30 2019 M.No.: 41857

Annexure ‘B' to the Independent Auditor's Report

(Referred to in paragraph 2(g) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Mirza International Limited of evendate)

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 MIRZAINTERNATIONAL LIMITED ("the Company") as of March 31 2019 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

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 of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. 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 respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

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 Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

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 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 internal financial controls system overfinancial reporting of the Company.

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 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

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.

Opinion

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 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For D R A & Co.
Chartered Accountants
FRN:006476N
CA Himanshu Singh
Place: Kanpur Partner
Date: May 30 2019 M.No.: 41857

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