The Members of
M/s Nahar Spinning Mills Limited
L U D H I AN A.
Report on the Standalone
Ind AS Financial Statements
We have audited the accompanying standalone Ind AS Financial Statements of NaharSpinning Mills Ltd ('the Company') which comprise the balance sheet as at 31st March2017 the statement of profit and loss (including other comprehensive income) thestatement of cash flows and the statement of changes in equity for the year then ended anda summary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone Ind ASfinancial statements"). Management'sResponsibility for the Standalone Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 201 3 ("the Act") with respect to the preparationof these standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act read with relevant rules issued thereunder.
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 Ind ASFinancial Statements that give a true and fair view and are free from materialmisstatementwhether due to fraud or error.
Our responsibility is to express an opinion on these standalone Ind AS FinancialStatements based on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions 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 Ind AS
Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS Financial Statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS Financial Statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS Financial Statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS Financial Statements.Opinion
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thefinancial position of the Company as at 31st March 2017 and its financial performanceincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 and 4 of the order.
2. 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 ouraudit.
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 and the cash flow statementdealt with by this Report are in agreement with the books of account;
d. in our opinion the aforesaid standalone Ind AS
financial statements comply with the Accounting Standards specified under Section 133of the Act read with relevant rules thereunder;
e. on the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164(2) of the Act;
f. with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "AnnexureB";and
g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
(I) the Company has disclosed the impact of pending litigations on its financialposition in its Ind ASfinancial statements;
(II) the Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;
(III) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
(IV) The Company has provided requisite disclosures in its standalone Ind AS financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 9th November 2016 to 30th December 2016.However we are unable to comment as thecompany has not maintained separate records of sBn and other denomination.
For GUPTA VIGG & CO.
Firm Regn.No.001 393N
VINOD KUMAR KHANNA
ANNEXURE-ATO THE AUDITORS' REPORT The Annexure referred to in independent Auditors'Report to the members of the Company on the standalone Ind AS Financial Statements for theyear ended 31st March 2017we report that:
I) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets
(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except the one property the details of which are asunder:
|No. of Cases ||Gross Block as on 31.03.2017 ||Net Block as on 31.03.2017 ||Remarks |
|1(One) ||252.98 Lacs ||247.44 Lacs ||The agreement is in the name of the company only registration of sale deed is pending. |
ii) l he physical verification of inventory has been conducted at reasonable intervalsby the management and no material discrepancies were noticed on the physicalverification.
(iii) The Company has not granted any loans to any bodies corporate covered in theregister maintained under section 189 of the Companies Act 2013 ('the Act').
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
(v) According to information and explanation given to us The Company has not acceptedany deposits from the public during the year covered under the provisions of section 73 or76 or any other relevant provisions of the Companies Act 2013.
(vi) We have broadly reviewed the cost records maintained by the company pursuant tothe sub section (1) of section 148 of the Companies Act specified by the CentralGovernment and are of the opinion that prima facie the prescribed records have beenmaintained.Wehave however not made a detailed examination of cost records with a view todetermine whether they are accurate or complete.
vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income-taxsales tax value added tax duty of customs service tax cess and other materialstatutory dues have been regularly deposited during the year by the Company with theappropriate authorities. As explained to us the Company did not have any dues on accountof employees' state insurance and duty of excise.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax value added tax duty ofcustoms service tax cess and other material statutory dues were in arrears as at 31stMarch 2017 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us there are no materialdues of duty of customs which have not been deposited with the appropriate authorities onaccount of any dispute. However according to information and explanations given to usthe following dues of income tax sales tax duty of excise service tax and value addedtax have not been deposited by the Company on account of disputes:
|Name of Statute ||Nature of Dues ||Amount (Unpaid) ||Period to which which it Relates ||Forum where dispute is pending |
|The Finance Act 1994 ||Service Tax ||11.49 ||2004-2005 ||High Court of Jabalpur |
|The Central Excise Act1944 ||Excise Duty ||4.70 ||1994-1995 ||High Court of Jabalpur |
|The Customs Act 1962 ||Drawback ||0.93 ||2006-2007 ||High Court of Jabalpur |
|The Central Excise Act 1944 ||Excise Duty ||17.46 ||2001-2002 ||High Court of Jabalpur |
|MP Commercial & Vat Act ||Entry Tax ||2.94 ||2012-2013 ||Appelate Tribunal |
|The Finance Act 1994 ||Service Tax ||4.26 ||2012-2014 ||CESTAT |
|The Finance Act 1994 ||Service Tax ||1.69 ||2012-2014 ||Commissioner Appeal |
|The Income Tax Act 1961 ||Income Tax ||316.53 ||2011-2012 ||CIT (A) Ludhiana |
viii) The Company has not defaulted in repayment of any loans or borrowings from anyfinancial institution banks government or debenture holders during the year.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.
(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Ind AS Financial Statements as required by theapplicable accounting standards.
(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IAof the ReserveBank of India Act 1934.
For GUPTA VIGG & CO.
VINOD KUMAR KHANNA
ANNEXURE-B TO THEAUDITORS' REPORT Report on the Internal Financial Controls underClause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financial reporting of NaharSpinning Mills Ltd("the Company") as of 31st March 2017 in conjunction with ouraudit of the standalone Ind AS Financial Statements of the Company for the year ended onthat date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). 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 Companies Act 2013. Auditors' Responsibility
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards onAuditing issued by ICAI and deemed tobe prescribed under section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and 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 Ind AS Financial Statementswhether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind AS Financial Statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting 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 Ind AS Financial Statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the Ind AS Financial Statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017 based on theinternal control over financial reporting criteria 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 Institute of CharteredAccountants of India.
| ||For GUPTA VIGG & CO. |
| ||Chartered Accountants |
| ||Firm Regn.No.001393N |
|Place:LUDHIANA. ||VINOD KUMAR KHANNA |
|Dated: 30.05.2017 ||PARTNER |
| ||M.NO.081585 |