Independent Auditor's Report On Standalone Half yearly Financial Results and StandaloneYear to Date Results of the Company Pursuant to the Regulation 33 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
TO THE MEMBERS OF THE R & B DENIMS LIMITED REPORT ON THE STANDALONE FINANCIALSTATEMENTS
I have audited the accompanying standalone financial statements of R & B DenimsLimited ("the Company") which comprise the Balance Sheet as at March 31 2018the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the Year ended and a summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas "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 ofthese standalone Ind AS financial statements to 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 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 standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
My responsibility is to express an opinion on these standalone Ind AS financialstatements based on my audit.
I 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.
I conducted my audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that I comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sBoard of Directors as well as evaluating the overall presentation of the standalone IndAS financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate toprovide a basis for my audit opinion on the standalone Ind AS financial statements.
In my opinion and to the best of my information and according to the explanations givento me the aforesaid standalone Ind AS financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2018 and its financial performance including other comprehensive incomeits cash flows and the changes in equity for the year ended on that date.
Our opinion is not modified in respect of above said matters.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of section 143(11) of the Act we givein the Annexure A a statement on the matters specified in paragraph 3 and 4 of the orderto the extent applicable.
As required by Section 143 (3) of the Act I report that:
a. I have sought and obtained all the information and explanations which to the best ofmy knowledge and belief were necessary for the purposes of my audit;
b. In my opinion proper books of account as required by law have been kept by theCompany so far as it appears from my examination of those books;
c. The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account;
d. In my opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under Section 133 of the Act read with relevantrules issued thereunder; e. On the basis of the written representations received from thedirectors as on March 31 2018 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2018 from being appointed as a director in termsof Section 164(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 myseparate Report in "Annexure B" 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 as amended inmy opinion and to the best of my information and according to the explanations given tome:
1. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements. Refer note 26 Contingentliabilities to the standalone Ind AS financial statements.
2. 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.
FOR PRADEEP SINGHI & ASSOCIATES
PRADEEP KUMAR SINGHI
M. NO. 024612
ANNEXURE "A" TO THE AUDITOR'S REPORT
In respect of the Annexure referred to in paragraph 1 of our report to the Members of R& B Denims Ltd ("the company") for the year ended March 31 2018 I reporton following matters:
|Sr. No. Particulars ||Auditors Remark |
|(i) (a). Whether the company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets; ||Yes. Company is maintaining proper records of fixed assets. |
|(b).Whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so whether the same have been properly dealt with in the books of account; ||Yes fixed assets have been physically verified at regular intervals. |
| ||No material discrepancies have been noticed on such verification. |
|(c). Whether title deeds of immovable properties are held in the name of the company. If not provide details thereof ||Yes |
|(ii) (a). Whether physical verification of inventory has been conducted at reasonable intervals by the management and whether any material discrepancies were noticed and if so how they have been dealt with in the books of account. ||Yes physical verification has been conducted except material lying with third parties where confirmations are obtained. |
|(iii) Whether the company has granted any loans secured or unsecured to companies firms or other parties covered by clause (76) of Section 2 of the Companies Act 2013. If so ||No loans have been granted to the companies firms or other parties covered by clause (76) of Section 2 of the Companies Act 2013 during the period under audit. |
|(a). Whether the terms and conditions of the grant of such loans are not prejudicial to the company's interest ||Not Applicable |
|(b). Whether receipt of the principal amount and interest are regular. If not provide details thereof; and ||Not Applicable |
|(c). If overdue amount is more than rupees five lakhs whether reasonable steps have been taken by the company for recovery of the principal and interest ||Not Applicable |
|(iv) In respect of loans investments and guarantees whether provisions of Section 185 and 186 of the Companies Act 2013 have been complied with. If not provide details thereof ||Yes all the compliances have been followed by the company. |
|(v) In case the company has accepted deposits whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed thereunder where applicable have been complied with? If not the nature of such contraventions be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal whether the same has been complied with or not? ||No. Company has not accepted any deposits. Directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under have been complied.c |
|(vi) Where maintenance of cost records has been specified by the Central Government under sub- section (1) of section 148 of the Companies Act 2013 and whether such accounts and records have been made and maintained; ||Yes maintained |
|(vii) 1. Whether the company is regular in depositing undisputed statutory dues including provident fund employees' state insurance income-tax sales-Lax service tax duty of customs duty of excise value added tax and any other statutory dues with the appropriate authorities and if not the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable shall be indicated by the auditor ||Yes the company is regular |
|2. Where dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not be treated as a dispute). ||1) Appeal is pending before Commissioner of Appeals for F.Y. 2012-13 for tax demand of Rs. 7335180/- and for F.Y. 2013-14 for tax demand of Rs. 18825700/- |
| ||2) Appeal with CESTAT is pending for levy of Custom Duty for Rs. 193179/- for import of Coal. |
| ||3) The case of the Company stands pending before Appellate Tribunal for the Sales Tax Penalty levied for F.Y. 2012-13. The amount of Penalty is Rs. 57074/- which is contingent in nature. |
|(viii) Whether the company has defaulted in repayment of dues to a financial institution or bank or debenture holders? If yes the period and amount of default to be reported (in case of banks and financial institutions lender wise details to be provided). ||No default has been made in repayment of dues |
|(ix) Whether moneys raised by way of public issue/ follow-on offer (including debt instruments) and term loans were applied for the purposes for which those are raised. If not the details together with delays / default and subsequent rectification if any as may be applicable be reported; ||No Money has been raised by way of Public issue/ follow-on offer during the period. |
| ||Term Loan has been made by the Bank directly to the vendors. And there is no delay or default. |
|(x) Whether any fraud by the company or any fraud on the Company by its officers/ employees has been noticed or reported during the year; if yes the nature and the amount involved be indicated ||No. Not Applicable |
|(xi) Whether managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act? If not state the amount involved and steps taken by the company for securing refund of the same ||Yes. Managerial Remuneration has been paid / provided in accordance with provisions of section 197 and under other rules. |
|(xii) Whether the Nidhi Company has complied with the Net Owned Fund in the ratio of 1: 20 to meet out the liability and whether the Nidhi Company is maintaining 10% liquid assets to meet out the unencumbered liability ||Not Applicable |
|(xiii) Whether all transactions with the related parties are in compliance with Section 188 and 177 of Companies Act 2013 where applicable and the details have been disclosed in the Financial Statements etc. as required by the accounting standards and Companies Act 2013. ||Yes |
|(xiv) Whether the company has made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review and if so as to whether the requirement of Section 42 of the Companies Act 2013 have been complied and the amount raised have been used for the purposes for which the funds were raised. If not provide details thereof ||During the period under consideration no such allotment / placement has been made |
(xv) Whether the company has entered into any non- No. cash transactions with directorsor persons Not Applicable connected with him and if so whether provisions of Section 192of Companies Act 2013 have been complied with.
(xvi) Whether the company is required to be registered Not Applicable under Section 45IA of Reserve Bank of India Act 1934 and if so whether the registration has beenobtained
FOR PRADEEP SINGHI & ASSOCIATES
PRADEEP KUMAR SINGHI
M. NO. 024612
ANNEXURE B TO THE AUDITOR'S REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
I have audited the internal financial controls over financial reporting of R & BDenims Limited ("the Company") as of 31 March 2018 in conjunction with my auditof the standalone Ind AS financial statements of the Company for the year ended on thatdate.
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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to 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.
My responsibility is to express an opinion on the Company's internal financial controlsover financial reporting based on my audit. I conducted my audit in accordance with theGuidance Note and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that I 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.
My audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. My 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 judgement including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error.
I believe that the audit evidence I have obtained is sufficient and appropriate toprovide a basis for my 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 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.
In my opinion to the best of my information and according to the explanations given tome 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 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.
FOR PRADEEP SINGHI & ASSOCIATES
PRADEEP KUMAR SINGHI
M. NO. 024612