To the Members of ORIENT BEVERAGES LIMITED
Report on the Standalone Ind-AS Financial Statements
We have audited the accompanying standalone Ind-AS financial statements of OrientBeverages Limited ("the Company") which comprise the Standalone Balance Sheetas at March 31 2018 the Standalone Statement of Profit and Loss (including OtherComprehensive Income) the Standalone Statement of Changes in Equity and the StandaloneStatement of Cash Flows for the year then ended and a summary of the significantaccounting policies and other explanatory information (hereinafter referred to as"standalone Ind-AS financial statements").
Management's Responsibility 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 2013 ('the Act') with respect to the preparation of theseStandalone Ind-AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind-AS) prescribed undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended 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 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 standalone Ind-AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these standalone Ind-AS financialstatements based on our audit. In conducting our Audit we have taken in to account theprovisions of the Act the accounting and auditing standards and matters which arerequired to be included in the audit report under the provisions of the Act and the Rulesmade there under and Order issued under section 143(11) of the Act. We conducted our auditof the standalone Ind-AS financial statement in accordance with the Standards on Auditingspecified under section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone Ind-AS financial statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the standalone Ind-AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theentity's preparation of the standalone Ind-AS financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by management as well as evaluating theoverall presentation of the standalone 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.
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 of the state of affairs ofCompany as at 31st March 2018 and its profit including other comprehensive income thechanges in equity and its cash flows for the year ended on that date.
The Company prepared its standalone financial statements for and up to the year ended31st March 2017 following the Accounting Standards notified under Section 133 of theCompanies Act 2013 read with paragraph 7 of the Companies (Accounts) Rules 2014 (IndianGAAP). The Company's standalone financial statements for the year ended 31st March 2017have been audited by the predecessor auditors who expressed an unmodified opinion on thosefinancial statements dated 30th May 2017. We have audited conversion of the financialresults from Indian GAAP to Ind-AS for the year ended 31st March 2017 also withtransition date being 1st April 2016 included in these standalone Ind-AS financialstatements.
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 paragraphs 3and 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 purpose of our audit;
b. In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books and proper returns adequatefor the purpose of our audit have been received from branches not visited by us.
c. The Balance Sheet Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and Cash Flow Statement dealt with by this Reportare in agreement with the books of account and returns.
d. In our opinion the aforesaid standalone Ind-AS financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act. e. The Company hasnot entered into any such financial transactions or matters which have any adverse effecton the functioning of the company.
f. On the basis of written representations received from the directors as on March 312018 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of sub-section (2) ofsection 164 of the Companies Act 2013.
g. 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'; and h. With respect to the other matters to be includedin the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditor's)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind-AS financial statements- Refer note 43 44 and 45 of thenotes to the standalone financial statements.
ii. There were no material foreseeable losses on the long term contracts includingderivative contracts and as such the Company was not required to make any provision forthe same under the applicable law or accounting standards.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company. iv. The disclosure regardingdetails of Specified Bank Notes held and transacted during 8th November 2016 to 30thDecember 2016 has not been made since the requirement does not pertain to the financialyear ended 31st March 2018.
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF ORIENT BEVERAGES LTD.
Referred to in paragraph 1 under the heading of "Report on Other Legal andRegulatory Requirement" of our report of even date on the Standalone FinancialStatements of Orient Beverages Ltd.
(i) In respect of its Fixed assets: a. The Company has maintained proper recordsshowing full particulars including quantitative details and situation of its fixed assets.b. As explained to us all the fixed assets of the Company have been physically verifiedby the management in phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its assets. No material discrepancies havebeen noticed on such physical verification. c. According to the information andexplanations given to us and on the basis of our examination of the records of theCompany the title deeds of immovable properties included in the "Property Plant andEquipment" are held in the name of the Company.
(ii) The inventories of the Company have been physically verified during the year bythe management. In our opinion the frequency of verification is reasonable and asexplained to us there was no material discrepancies noticed on physical verification ofinventories.
(iii) The Company has granted loans to one of its wholly owned subsidiary covered inthe register maintained under Section 189 of the Companies Act 2013. In our opinion andaccording to the information and explanation given to us: (a) The terms and conditions ofthe grant of such loans are not prejudicial to the Company's Interest.
(b) The schedule of repayment of principal and payment of interest has been stipulatedfor the loans granted and its repayment has not fallen due during the year and (c) Thereare no amounts of loans granted to Companies firms or other parties listed in theregister maintained u/s 189 of the Companies Act 2013 which are overdue for more thanninety days.
(iv) The Company has complied with the provisions of Section 185 and Section 186 of theCompanies Act 2013 in respect of loans and investments made and guarantees and securityprovided by it as applicable.
(v) According to the information and explanations given to us the Company has notaccepted any deposit in terms of directions issued by the Reserve Bank of India and theprovisions of section 73 to 76 or any other relevant provisions of the Companies Act andthe rules framed there under. Accordingly the provisions of clause 3(v) of the Order arenot applicable.
(vi) The Central Government has not prescribed maintenance of cost records underSection 148(1) of the Companies Act 2013 for any of the products of the Company.
(vii) In respect of statutory dues: a. According to the records of the Companyundisputed statutory dues including Provident Fund Employees' State InsuranceIncome-Tax Sales Tax Service Tax Duty of Customs Duty of Excise Value Added TaxGoods and Service Tax Cess and other statutory dues have been generally regularlydeposited with the appropriate authorities and no undisputed amounts payable in respect ofstatutory dues were in arrears as at 31st March 2018 for a period of more than six monthsfrom the date they became payable. b. According to the information and explanations givento us there are no material dues of income tax sales tax service tax duty of customsduty of excise or value added tax or Goods and Service Tax which have not been depositedwith the appropriate authorities on account of any dispute. However according toinformation and explanations given to us the following dues of income tax sales taxduty of excise service tax and value added tax have not been deposited by the Company onaccount of disputes as at 31st March 2018:
|Sl. No. ||Nature of dues ||Amount due ||Forum where pending ||For the period |
| || ||(Rs in 000) || || |
|1. ||Municipal Tax ||15036 ||Kolkata Municipal Corporation (Refer Note No. 46) ||01.07.2006 to 30.09.2015 |
|2. ||Interest and penalty on municipal tax ||19106 ||Kolkata Municipal Corporation (Refer Note No. 46) ||01.07.2006 to 31.03.2018 |
|3. ||Excise Duty ||652 ||Central Excise Tribunal ||1977-78 to 1982-83 |
|4. ||Service Tax on Rent ||3387 ||Hon'ble High Court at Calcutta (Refer Note No. 44) ||01.06.2007 to 30.06.2012 |
|5. ||Service Tax on Electricity Charges ||7068 ||Disputed with the tenants (Refer Note No. 52) ||01.07.2012 to 30.06.2017 |
|6. ||GST on Electricity Charges ||605 ||Disputed with the tenants (Refer Note No. 52) ||01.07.2017 to 31.03.2018 |
(viii) The Company has not defaulted in repayment of loans or borrowings to financialinstitutions banks government or dues to debenture holders.
(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 not applicable.
(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 notes to the standalone financial statements asrequired by the applicable 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) of the Order is not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF ORIENT BEVERAGES LTD.
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 OrientBeverages Limited ('the Company') as of 31st March 2018 in conjunction with our audit ofthe standalone financial 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 ('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 the Company's policies the safeguarding of its assetsthe prevention 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.
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 deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. 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 were 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 auditors' 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 financial reporting includes those policiesand procedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorizations of the Management and directors of the Company; and(3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition use or disposition of the Company's assets that could have a material effecton 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.
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 2018 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 D. MITRA & CO. |
| ||Chartered Accountants |
| ||Firm Regn. No. 328904E |
|107/1 Park Street Kolkata - 700016 ||D. K. Mitra |
|Dated: 30th May 2018 ||Proprietor |
| ||Membership No. 017334 |