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Nandan Denim Ltd.

BSE: 532641 Sector: Industrials
NSE: NDL ISIN Code: INE875G01030
BSE 00:00 | 27 Feb 20.95 -0.10
(-0.48%)
OPEN

21.35

HIGH

21.90

LOW

20.55

NSE 00:00 | 27 Feb 21.05 0
(0.00%)
OPEN

21.95

HIGH

21.95

LOW

20.35

OPEN 21.35
PREVIOUS CLOSE 21.05
VOLUME 2800
52-Week high 58.00
52-Week low 18.70
P/E 9.03
Mkt Cap.(Rs cr) 101
Buy Price 20.95
Buy Qty 2000.00
Sell Price 21.60
Sell Qty 44.00
OPEN 21.35
CLOSE 21.05
VOLUME 2800
52-Week high 58.00
52-Week low 18.70
P/E 9.03
Mkt Cap.(Rs cr) 101
Buy Price 20.95
Buy Qty 2000.00
Sell Price 21.60
Sell Qty 44.00

Nandan Denim Ltd. (NDL) - Auditors Report

Company auditors report

To

The Members of

Nandan Denim Limited

Ahmedabad

Report on the Audit of the Financial Statements

Opinion

1. We have audited the financial statements of Nandan Denim Limited ("theCompany") which comprise the Balance Sheet as at March 31 2019 and the Statementof Profit and Loss the Statement of Changes in Equity and Statement of Cash Flows for theyear then ended and notes to the financial statements including a summary of thesignificant accounting policies and other explanatory information.

2. 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 and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards (‘Ind AS') specified under Section 133 of the Act of thestate of affairs of the Company as at March 31 2019 and its profit total comprehensiveincome its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2013 and the Rules there under and we have fulfilled ourethical 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.

Key Audit Matters

4. 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 financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion on thesematteर

5. Key audit matter identified in our audit is on recoverability assessment of tradereceivables as follows:

Key audit matter How our audit addressed the key audit matter
Recognition of Government Grant
The Company receives government grants as part of the Gujarat Textile Policy 2012 Programme and under Technology Upgradation Fund Scheme-Non-SSI Textile Sector. In applying the Gujarat Textile Policy& Technology Upgradation Fund Scheme-Non-SSI Textile Sector government grants were recognised on the basis of compliance with their conditions and meeting the envisaged obligations. During the current financial year the Company received the Technology Upgradation Fund Scheme of RS.159348628/- and State Government Grant of H625590773/- out of which Government Grant of RS.424161515/- pertaining to Interest Subsidy on Term Loan and Government Grant of RS.75857760/- of Power Subsidy have been reduced from the corresponding Expenditure and Grant in respect of GST Amounting to RS.284920126/- is treated as other operating revenue. We considered this to be a matter of most significance to our audit due to the We evaluated the accounting treatment of the government grant in terms of Ind AS -20 "Accounting for Government Grants". In respect of the same our audit procedures included the following:
• On a sample basis verified the claims lodged by the Company and its approval by the concerned Government Authorities;
• In respect of claims pending for approval at year end we verified the empirical evidence on the claims lodged vis-a-vis claims approved to satisfy as regards the reliable measurement of government grant receivable.
• Significant level of Management Judgement involved in respect of reliable measurement of government grants;
• The quantum of the government grant recognised.

Information other than the Standalone Financial Statements and Auditors' Report thereon

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 identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance and asmay be legally advised.

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 Indian Accounting Standards (Ind AS) specifiedunder section 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate implementation and maintenance of accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error

8. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditors' Responsibilities for the Audit of the Standalone Financial Statements

10. 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.

11. 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 of opinion. The risk of not detecting a material misstatement resulting from fraudis higher than for our resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

• 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 control system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the 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.

12. 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.

13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicate withthem all relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matteर We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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.

Report on Other Legal and Regulatory Requirements

15. As required by the Companies (Auditor's Report) Order2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

16. 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the Ind AS Specifiedunder 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".

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 the financial statements- Refer Note -33 to the Financial Statement;

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.

For Samir M. Shah &Associates
Chartered Accountants
[Firm Regd. No. 122377W]
(S.M. Shah)
Place : Ahmedabad Partner
Date : May 25 2019 [M. No. 111052]

Annexure "A" to the Independent Auditors'

Report of even date on the Standalone Financial Statements of Nandan Denim Limited

Referred to in paragraph 15 of our Report of even date to the Members of NANDAN DENIMLIMITEDfor the year ended March 31 2019

1. In respect of Fixed Assets :

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets on the basis of available information.

(b) As per the information and explanations given to us the management at reasonableintervals during the year in accordance with a programme of physical verificationphysically verified the fixed assets and no material discrepancies were noticed on suchverification as compared to the available records.

(c) As explained to us the title deeds of all the immovable properties are held in thename of the Company's name.

2. In respect of Inventories :

As per the information and explanations given to us inventories were physicallyverified during the year by the management at reasonable intervals. No materialdiscrepancy was noticed on such physical verification.

3. In respect of Loans and Advances granted during the year:

As regards the loans the Company has not granted any loans secured or unsecuredduring the year under audit to the Companies firms and other parties covered in theregister maintained under section 189 of the Companies Act 2013 and therefore theclauses (iii) (a) to (c) of the Companies (Auditor's Report) Order 2016 are notapplicable.

4. Loans Investments and guarantees:

In our opinion and according to information and explanations given to us the Companyhas complied with provisions of Section 185 and 186 of the Companies Act 2013 in respectof loans investments guarantees and security.

5. Acceptance of Deposits:

During the year the Company has not accepted any deposits and hence the directivesissued by the Reserve Bank of India and the provisions of sections 73 to 76 or any otherrelevant provisions of the Companies Act 2013 and the Rules framed there under are notapplicable to the Company. Therefore clauses (v) of Companies (Auditor's Report) Order2016 is not applicable.

6. Cost Records:

Pursuant to the Rules made by the central government of India the Company is requiredto maintain cost records as specified under section 148(1) of the Act.

We have broadly reviewed the same and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

7. In respect of Statutory Dues :

(a) According to the records of the Company the Company is generally regular indepositing with appropriate authorities undisputed statutory dues including providentfundemployees' state insuranceincome tax Value added taxCentrat Sales TaxGoods andTransport Tax service tax duty of customs duty of excisecess and any other statutorydues with the appropriate authorities applicable to it. According to the information andexplanations given to us no undisputed amounts payable in respect of statutory dues wereoutstanding as at March 31 2019 for a period of more than six months from the date theybecame payable.

(b) According to the records of the Company the dues of income tax service tax dutyof customs duty of excise value added tax central sales tax or cess which have not beendeposited on account of disputes and the forum where the dispute is pending are as under:

Name of the Statute Nature of the Dues Financial Year Amount (H) Forum where dispute is pending
Income Tax Demand & 2007-08 2612375 Income Tax Tribunal
Interest Income Tax Demand & 2012-13 20937906 Ahmedabad Commissioner of Income Tax
Interest Income Tax Demand & 2013-14 4404840 (Appeals) Commissioner of Income Tax
Income Tax Act1961 Interest Income Tax Demand & 2014-15 66386384 (Appeals) Commissioner of Income Tax
Interest Income Tax Penalty 2007-08 1303870 (Appeals) Commissioner of Income Tax
Value Added Tax 2010-11 2716318 (Appeals) Joint Commissioner
Value Added Tax Demand Value Added Tax 2010-11 4002472 (Appeals) Joint Commissioner
ESIC Act Interest & Penalty ESIC Demand 2013-14 2603633 (Appeals) ESIC Court

8. Based on our audit procedure and according to the information and explanation givento us we are of the opinion that the Company has not defaulted in repayment of dues toBanks or Government. The Company has no debenture holder or any financial institutionalborrowing during the year.

9. Accordingto the information and explanations given to us the Company had not raisedany money by way of public issue during the year. According to the information andexplanations given to us and on an overall examination of the balance sheet of theCompany in our opinion the term loans taken during the year were applied for the purposefor which they were obtained.

10. Based upon the audit procedures performed and information and explanations given bythe management we report that no fraud by the Company or any fraud on the Company by it'sofficer or employees has been noticed or reported during the course of our audit.

11. In our opinion and according to the information and explanations given to us theCompany had paid managerial remuneration which is in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule V of The CompaniesAct 2013.

12. In our opinion and according to the information and explanations given to us theprovisions of special statute applicable to chit funds and nidhi/mutual benefitfunds/societies are not applicable to the Company. Hence Clause 3(xii) of the Company's(Auditor's Report) Order 2016 is not applicable.

13. In our opinion and according to the information and explanations given to us thetransactions entered by the Company with related parties are in compliance with theprovisions of section 177 and 188 of the Companies Act 2013 and details thereof areproperly disclosed in the financial statements as required by the applicable accountingstandard.

14. The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Hence clause(xiv) of the Company's (Auditor's Report) Order 2016 is not applicable.

15. The Company had not entered in to any non-cash transactions with the directors orpersons connected with him during the year hence section 192 of the Companies Act 2013is not Applicable hence clause (xv) of Company's (Auditor's Report) Order 2016 is notapplicable.

16. As the Company is not required to register under section 45-IA of Reserve Bank ofIndia Act 1934 hence clause (xvi) of Company's (Auditor's Report) Order 2016 is notapplicable.

For Samir M. Shah &Associates
Chartered Accountants
[Firm Regd. No. 122377W]
(S.M. Shah)
Place : Ahmedabad Partner
Date : May 25 2019 [M. No. 111052]

Annexure "B" To Independent Auditors' Report

Referred to in paragraph 16(f) of "Report on Other Legal and RegulatoryRequirements" of our Report of even date to the Members of Nandan Denim Limited forthe year ended March 31 2019.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of NandanDenim Limited as of March 31 2019 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls 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 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 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 ofrecords that in reasonable detail accuratety and fairly reflect the transactions anddispositions of the assets of the company; (2) Provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material 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 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 March 31 2019 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 Samir M. Shah &Associates
Chartered Accountants
[Firm Regd. No. 122377W]
(S.M. Shah)
Place : Ahmedabad Partner
Date : May 25 2019 [M.No. 111052]