To the Members of The Ruby Mills Limited
Report on the Financial Statements
We have audited the accompanying financial statements of THE RUBY MILLS LIMITED("the Company") which comprise the Balance Sheet as at March 31 2017 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 is responsible for the matters stated in Section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
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 financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers 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 the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence that we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the financial statements.
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 the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2017 and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. 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 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 AccountingStandards specified under 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 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 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 A.
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 if any of pending litigations as at March 312017 on its financial position in its financial statements Refer Note 29 to the financialstatements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as required under the applicable law oraccounting standards;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March 312017;
iv. The Company has provided requisite disclosure in the financial statements as toholding as well as dealings in Specified Bank Notes during the period from November 82016 to December 30 2016. Based on audit procedure and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management - Refer Note 18.1 of thefinancial statements.
2. 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 B a statement on the matters specified in the paragraph 3 and 4 of theOrder.
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT
Referred to in paragraph 1 (f) under the heading of "Report on Other Legal andRegulatory Requirements" of our Independent Auditors' Report of even date to themembers of the Company on the financial statements for the year ended March 31 2017.
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 THE RUBYMILLS LIMITED ("the Company") as of March 31 2017 in conjunction with ouraudit of the 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required 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 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 ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
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 judgement 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 accurately 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 andexpenditure of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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.
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 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note.
ANNEXURE BTO INDEPENDENT AUDITORS' REPORT
Referred to in Paragraph 2 under the heading of "Report on Other Legal andRegulatory Requirements" of our Independent Auditors' Report of even date on thefinancial statements for the year ended March 31 2017
Report on the Companies (Auditors' Report) Order 2016 issued in terms of Section143(11) of the Companies Act 2013 ("the Act") ofThe Ruby MillsLimited("the Company")
i. a. The Company has maintained proper records showing full particulars includingquantitative details and situation of Property plant and equipment ("PPE")(earlier referred to as fixed assets).
b. The PPE have been physically verified by the management according to a phasedprogramme designed to cover all the PPE over a period of three years which in ouropinion provides for physical verification of all the PPE at reasonable intervals.Pursuant to the programme fixed assets have been physically verified by the managementand no material discrepancies were noticed on such verification.
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 asincluded in Note 12 on PPE to the financial statements are held in the name of theCompany.
ii. Inventories other than stocks lying with third parties have been physicallyverified by the management on half yearly basis. In case of stocks lying with thirdparties certificates confirming such stocks have been received in respect of stocks heldas on March 31 2017. In our opinion the frequency of such verification is reasonable andno material discrepancies were noticed on such physical verification.
iii. The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act. Accordingly paragraph 3(iii) of the Order is not applicable.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act with respectto the loans and investments made. The Company has not given any guarantee or provided anysecurity in connection with a loan to any person or other body corporate and accordinglythe question of commenting on compliance with the provisions in respect thereof does notarise.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit from the public. Accordingly paragraph 3(v) of theOrder to comment on whether the Company has complied with the directives issued by theReserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and rules framed thereunder is not applicable.
vi. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 as specified by the Central Governmentunder Section 148 (1) of the Act in respect of the Company's products and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the said accounts andrecords with a view to determine whether they are accurate or complete.
vii. a. According to the information and explanations given to us and on the basis ofthe books and records examined by us the Company has been regular in depositingundisputed statutory dues including Provident Fund Employees State Insurance Income TaxSales-tax Service Tax Duty of Customs Duty of Excise Value Added Tax Cess and otherstatutory dues as applicable to it with the appropriate authorities and there are noarrears of outstanding statutory dues on the last day of the financial year for a periodof more than six months from the date they become payable.
b. According to the information and explanations given to us and on the basis of thebooks and records examined by us as may be applicable given herein below are the detailsof dues of Income-Tax Sales-Tax Service Tax Duty of Customs Duty of Excise ValueAdded Tax Cess which have not been deposited on account of disputes and the forum wherethe dispute is pending:
|Name of the Statute ||Forum where dispute is pending ||Nature of the Dues ||Period to which the amount relates ||Amount (Rs) |
|The Income tax Act 1961 ||Commissioner of Income Tax (Appeals) ||Income tax and interest ||Assessment Year 2006-07 to 2014-15 ||65051915* |
|The Central Excise Act 1944 ||Assistant of Commissioner of Central Excise ||Excise Duty ||Financial Years 1980-81 1993-94 1995-96 1996-97 to 2000-01 2001-02 ||1852964 |
* Amount deposited or adjusted is Rs 32207560.
viii. According to the information and explanations given to us as also on the basisof the books and records examined by us the Company has not defaulted in the repayment ofdues if any to financial institutions banks Government or debenture holders.
ix. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Accordingly paragraph 3 (ix)of the Order in respect thereof is not applicable. Moneys raised by way of term loans wereapplied for the purposes for which those are raised.
x. According to the information and explanations given to us and on the basis of booksand records examined by us no material fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year in the course of ouraudit.
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. The Company is not a Nidhi company. Accordingly paragraph 3(xii) of the Order isnot applicable to the Company
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 the provisions of Sections 177 and 188 of the Act wherever applicableand the details of such transactions have been disclosed in the financial statements asrequired by the applicable accounting standards.
xiv. The Company has not made a preferential allotment or private placement of sharesfully paid or fully or partly convertible debentures during the year under review.Accordingly reporting under paragraph 3(xiv) of the Order is not applicable.
xv. According to the information and explanations given to us and based on ourexamination of the records of the Company it has not entered into non-cash transactionswith directors or persons connected with him. Accordingly paragraph 3(xv) of the Order isnot applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable tothe Company.
| ||For B. S. MEHTA & CO. |
| ||Chartered Accountants |
| ||Firm Registration No. 106190W |
| ||PARESH H. CLERK |
|Place: Mumbai ||Partner |
|Date : 17 May 2017 ||Membership No. 36148 |