The Members of
Modella Woollens Limited
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Modella WoollensLimited ( the Company') which comprise the balance sheet as at March 312017 thestatement of profit and loss and the cash flow statement for the year then ended and asummary of significant accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's Board of Directors are responsible for the matters stated in Section134(5) of the Companies Act 2013 (the Act') with respect to the preparation andpresentation of these standalone financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the company in accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under Section 133 of the Act read with the Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of accounting records relevant to the preparation andpresentation of financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 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 anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinionon the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements read with the notes thereongive the information required by the Act in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the company as at March 312017 and its loss and its cash flows forthe year ended on that date.
EMPHASIS OF MATTERS
We draw attention to the following matters in the Notes to the financial statements:
(a) Note 15(ii) to the financial statement regarding cheques towards rent paid butuncashed by the
(b) Note 21 (ii)in the financial statements which indicates that the Company hasaccumulated losses and its net worth has been fully / substantially eroded the Companyhas incurred a net loss/net cash loss during the current and previous year(s) and theCompany's current liabilities exceeded its current assets as at the balance sheet date.These conditions along with other matters indicate the existence of a materialuncertainty that may cast significant doubt about the Company's ability to continue as agoing concern. However based on the representation received from the management regardingcontinuing support the financial statements of the Company have been prepared on a goingconcern basis.
Our opinion is not modified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
As required by the Companies (Auditor's Report) Order 2016 (the Order') issuedby the Central Government of India in terms of sub-section (11) of section 143 of the Actwe give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
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 purpose of our audit;
b. In our opinion proper books of accounts as required by the law have been kept by theCompany so far as it appears from our examination of those books;
c. The Balance Sheet thestatement of profit and loss and cash flow statement dealtwith by this report are in agreement with the books of account;
d In our opinionthe aforesaid standalone financial statements comply with theaccounting standards specified under Section 133 of the Act 2013 read with Rule 7 ofCompanies (Accounts) Rules 2014;
e. The going concern matter described in sub paragraph (b) under Emphasis of Mattersparagraph above in our opinion may have adverse effect on the functioning of theCompany.
f. On the basis of written representations received from the directors as on March312017 taken on record by the Board of Directors none of the directors are disqualifiedas on March 312017 from being appointed as a director in terms of the Section 164(2) ofCompanies Act 2013.
g. In our opinionthe company has in all material respects an adequate internalfinancial controlsystem over financial reporting and such internal financial control overfinancial reporting were operating effectively as at March 31 2017 based on the internalcontrol over financial reporting criteria established by the company
55th Annual Report 2016-2017
h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of Companies (Audit and Auditors) Rules 2014 in our opinion andto the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations if any on itsfinancial position in its financial statements
ii. The Company has made provision as required underthe applicable law or accountingstandards for material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
Place : Mumbai. ForVinay Sanjay &Associates
Date : 12th May 2017 Chartered Accountants
CA Sanjay R Bhat Partner
Membership No. 43376 Firm No.112195W
ANNEXURE TO THE AUDITOR'S REPORT
As required by the Companies (Auditors' Report) Order 2015 issued by the Company LawBoard in terms of Section 143 of the Companies Act 2013 we further report that:
i. The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
We are informed that fixed assets have been physically verified by the management atreasonable interval and no material discrepancies were noticed on such verification. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and nature of its assets.
The Company does not own any immoveable jroperty as on date of balance sheet
ii. We are informed that there was no stock of coods during the year or at the year endand hence physical verification of stock were not requirt d to be conducted by themanagement. In view of above therefore we have no comment to offer on frequency of thephysical verification of such stocks.
Since company is not having any stock we have no comment to offer on whether theprocedures of physical verification of stocks followed by the management are reasonableand adequate in relation to the size of the Company and nature of its business.
Since company is not having any stock we have no comment to offer on maintainingproper records of inventory and discrepancies on physical verification of stocks ascompared to book records.
iii. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in register maintained under section 189 of the Companies Act 2013.Accordingly paragraph 3(iii) (a) and (b) of the Order are not applicable.
iv. The Company has not granted any loans or has made investments or given anyguarantee or
security within the meaning of Section 185 and 186 of the Companies Act 2013 and hencethe provision of this clause is not applicable for the year under audit.
v. According to the information and explanations given to us the Company has notaccepted any
deposit from the public. Therefore the provisions of Clause (v) of paragraph 3 of theCARO 2016 are not applicable to the Company. '
vi. As informed to us the maintenance of cost Records has not been specified by thecentral government under section 148(1) of the Act.
vii. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Employee's stateinsurance and other material statutory dues have been regularly deposited during the yearby the Company with the appropriate authorities. As explained to us the Company did nothave any dues on account of Income Tax Sales Tax Wealth Tax Service Tax CustQm Dutyandduty of excibe.
According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employee's state insuranceand other materialstatutory dues were in arrears as at March 31 2017 for a period of more than six monthsfrom the date they became payable. We are informed that dues of income tax sales taxwealth tax service tax duty of customs and duty of excise are not in dispute.
According to the information and explanations given to us there are no dues of incometax wealth tax sales tax service tax duty of custem-s and duty of excise which havenot been deposited with the appropriate authorities on account of any dispute.
viii The company has not taken any loans from any financial institution or bank ordebenture holdersand
hence the question of default in payment does not arise.
ix. The Company during the year has not raised any money from initial public offer orfurther public offer but has taken the unsecured loan from one of the Directors andCompany in which Directors are interested and the same has been applied for the purposefor which it has been raised.
x. According to information and explanations given to us no material fraud on or bythe Company has been noticed or reported during the course of our audit.
xi. The Company has provided for the gratuity liability of Managing Director as per theagreement
which is in accordance with the provisions of Section 197 read with Schedule V to theCompanies Act
xii. As the company is not a Nidhi Company the said clause is not applicable
xiii. All the transactions with the related parties are in compliance with Section 177and 188 of the Companies Act 2013 and the details of same has been disclosed in Note 12 ofNotes forming part of the financial statement
xiv. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures
xv. During the year the Company has not entered into any non-cash transactions withDirectors or persons connected with them
xvi. In our opinion and as per the information and explanation made available to us theCompany is not required to register under Section 45-IA of the Reserve Bank Of India Act1934
Place: Mumbai. For Vinay Sanjay & Associates
Date : 12th May 2017. Chartered Accountants
CA Sanjay R Bhat Partner
Membership No. 43376 Firm No.112195W