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Shri Dinesh Mills Ltd.

BSE: 503804 Sector: Industrials
NSE: SHRIDINESH ISIN Code: INE204C01024
BSE 00:00 | 08 Mar 353.90 -1.15
(-0.32%)
OPEN

346.05

HIGH

360.40

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346.05

NSE 05:30 | 01 Jan Shri Dinesh Mills Ltd
OPEN 346.05
PREVIOUS CLOSE 355.05
VOLUME 5634
52-Week high 360.40
52-Week low 76.10
P/E 46.87
Mkt Cap.(Rs cr) 198
Buy Price 348.10
Buy Qty 15.00
Sell Price 370.00
Sell Qty 20.00
OPEN 346.05
CLOSE 355.05
VOLUME 5634
52-Week high 360.40
52-Week low 76.10
P/E 46.87
Mkt Cap.(Rs cr) 198
Buy Price 348.10
Buy Qty 15.00
Sell Price 370.00
Sell Qty 20.00

Shri Dinesh Mills Ltd. (SHRIDINESH) - Auditors Report

Company auditors report

To the Members of Shri Dinesh Mills Limited Report on the Standalone FinancialStatements

Opinion

We have audited the accompanying standalone financial statements of Shri Dinesh Mills

Limited ("the Company") which comprises of the balance sheet as at 31stMarch 2020 and the statement of Profit and Loss (including other comprehensive income)and the Statement of changes in equity and statement of cash flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the

Companies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the

Company as at 31 March 2020 and its profit total comprehensive income its cash flowsand the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the financial statements under the provisions of the Act and therules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our opinion on thestandalone financial statements.

Key Audit Matters

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 standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matter Description Response to Key Audit Matter
A. Inventory valuation Principal Audit Procedures
Reference may be made to note 3.7 of significant accounting policies and note 8 to the financial statements of the Company. Under Ind AS 2 Inventories the valuation of raw material and other supplies have been an area of our focus being prime cost center of the Company. The valuation of finished goods has also been focused upon being a material amount. Our audit procedures comprised of the following:
Valuation of Inventory in accordance with Ind AS 2 has thus been considered as a key audit matter. 1. We have verified the maintenance of Stock Records with respect to Raw materials and Finished Goods and Inventory has being verified physically by management at year end and no material discrepancies have reported that need to be dealt with the books of accounts.
2. We have selected a sample of items of Raw materials and other supplies to check whether the rate per unit adopted for valuation is reflective of the last purchase rate (Realizable price). Similarly the rate per unit of various finished goods have been checked on a sample basis as to whether they reflect the net sale price (Realizable price).
Conclusion:
Based on the procedures performed above we have concluded that management has complied with the requirements of Ind AS 2 "Inventories".
B. Assessment of Covid-19 implications on the business operations of the Company Principal Audit Procedures
The outbreak of Coronavirus (Covid-19) pandemic globally and in India is causing significant disturbance and slowdown of economic activity. The Company has evaluated impact of this pandemic on its business operations and based on its review and current indicators of future economic conditions there is no significant impact on its financial results. Our procedures included amongst others the following:
The impact of coronavirus on the Company's business will depend on future developments that cannot be reliably predicted including actions to contain or treat the disease and mitigate its impact on the economies of the affected countries among others. A definitive assessment of the impact is not possible in view of the high uncertain economic environment and the scenario is still evolving. The Company has evaluated the impact of Covid-19 (to the extent possible based on the information available) on the components of financial statements including disclosures in the financial statements (e.g. appropriateness of carrying value of goodwill its liquidity position and recoverability and carrying values of its assets fair valuation etc.). Further the management has also considered the related factors such as the possible disruption of the supply chain availability of customers for its goods and taken an informed decision and have concluded that no material adjustments required at this stage in the financial results and the implications are also not material in nature. (i) Ensured that the impact on the business operations / revenues / cash flows etc. of the Company for the year (including fair valuations estimates realizability discount rates used etc.) has been properly assessed by the management;
We have reported this as a key audit matter because the implications of Covid-19 require the exercise of significant management judgement and estimation as also the magnitude of catastrophe globally. (ii) Assessed the events occurring subsequent to the year-end but before issuance of the auditor's report which are material in nature;
(iii) Determined that whether any adjustments are required in the financial statements; if yes whether the same have been appropriately accounted for;
(iv) Ensured that appropriate disclosures have been made in the financial statements regarding the impact and the management's assessment amidst Covid-19 scenario.
Based on the above procedures performed we noted that the Management's assessment of implications of Covid-19 on business operations along with assumptions and estimates made as well as disclosure requirements are satisfactory and is aligned with the ICAI's guidance on the subject matter.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Management

Discussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the 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 and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

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 adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing the

Company'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. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

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.

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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one 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 to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

? Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

? Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 as agoing concern.

? Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in

(i) planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or 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

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 andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b. In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination ofthose books; c. The balance sheet the statement of profit and loss and thecash flow statement dealt with by this Report are in agreement with the books of account;d. In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014; e. On the basis of the written representations receivedfrom the directors as on 31st March 2020taken on record by the Board ofDirectors none of the directors is disqualified as on 31st March 2020frombeing appointed as a director in terms of Section 164 (2) of the Act; f. With respect tothe adequacy of the internal financial controls over financial reporting of the Companyand the operating effectiveness of such controls refer to our separate report in"Annexure B"; and g. With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 in our opinion and to the best of our information and according to the explanationsgiven to us: i. the Company has disclosed the impact wherever necessary of pendinglitigations on its financial position in its financial statements; ii. ii. The Company didnot have any long-term contracts including derivatives contracts for which there were anymaterial foreseeable losses; iii. There has been no delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Company.

3. With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act: In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directorsduring the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. The

Ministry of Corporate Affairs has not prescribed other details underSection 197(16)which are required to be commented upon by us.

 

ForDhirubhai Shah & CoLLP

Chartered Accountants

Firm's registration number: 102511W/W100298

Sd/-

Harish B Patel

Partner

Membership number: 014427

Place: Vadodara Date:30thJune2020

Annexure-A to the Auditors' Report

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31stMarch 2020 wereport 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 program of physical verification of its fixed assets. Inaccordance with this program fixed assets were verified during the year and no materialdiscrepancies were noticed on such verification. In our opinion this periodicity ofphysical 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.

(ii) As explained to us the inventories have been physically verified during theyear by the management. In our opinion the frequency of verification is reasonable.Discrepancies noticed on physical verification of inventory as compared to book recordswere not material.

(iii) The Company has not granted any loans secured or unsecured to companiesfirms or other parties covered in the register maintained under section 189 of theCompanies Act and therefore the provisions of clauses (iii)(a) & (iii)(b) of theOrder are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of section 185 and 186 of the Act withrespect to the loans and investments made.

(v) In our opinion and according to the information and explanations given to usthe Company has not accepted any deposits covered by the provisions of Sections 73 to 76or any other relevant provisions of the Companies Act 2013 and the rules framed thereunder.

(vi) In our opinion and according to the information and explanations given to usand based on booksof account maintenance of cost records under section 148(1) of theCompanies Act 2013 is not applicable to the company and henceparagraph 3(vi) of the Orderis not applicable.

(vii) (a) The Company is regular in depositing undisputed statutory duesincludingprovident fund employees' state insurance income tax sales tax service taxduty of customs duty of excise value added tax cess Goods and Service Tax and anyother statutory dues with the appropriate authorities.

According to the information and explanations given to us in our opinion no undisputedamounts payable in respect of statutory dues including Provident Fund Employees' StateInsurance Income Tax Value Added Tax Central Sales Tax Wealth Tax Service Tax CustomDuty Excise Duty Cess Goods and Service Tax and other statutory dues applicable to itwere in arrears as at the balance sheet date for a period of more than six months from thedate they became payable.

(b) According to the information and explanations given to us and records of thecompany examined by us the following dues of income tax and duty of excise as at March31 2020which have not been deposited by the Company on account of any disputes.

Financial period to which it relates

Act

Nature of Dues

Forum where dispute is pending

Amount (Rs. In Lacs)

A.Y 2002-2003

Income Tax Act 1961

Disallowance under Business Income

High Court Gujarat

8.92

A.Y 2010-2011

Income Tax Act 1961

Disallowance under Business Income

Income Tax Appellate Tribunal Ahmedabad

28.37

A.Y 2011-2012

Income Tax Act 1961

Disallowance under Business Income

Income Tax Appellate Tribunal Ahmedabad

275.95

A.Y 2012-2013

Income Tax Act 1961

Disallowance under Business Income

Income Tax Appellate Tribunal Ahmedabad

107.43

A.Y. 2013-2014

Income Tax Act 1961

Disallowance under Business Income

Income Tax Appellate Tribunal Ahmedabad

5.48

A.Y. 2014-2015

Income Tax Act 1961

Disallowance under Business Income

Income Tax Appellate Tribunal Ahmedabad

146.72

A.Y. 2015-2016

Income Tax Act 1961

Disallowance under Business Income

Income Tax Appellate Tribunal Ahmedabad

109.99

A.Y. 1998-1999

The Central Excise Act 1944

Disallowed MODVAT credit taken on capital goods

Joint Commissioner of Central Excise Surat - II

4.94

A.Y. 1998-1999

The Central Excise Act 1944

Excise duty on blended yarn

Dy. Commissioner of Central Excise and Custom Ankleshwar

2.73

A.Y. 2004-2008

The Central Excise Act 1944

Excise duty on Polyester Tops

Central Excise and Customs Appellant Tribunal Ahmedabad

200.64
A.Y. 2008-2009

The Central Excise Act 1944

Excise duty on Polyester Tops

Central Excise and Customs Appellant Tribunal Ahmedabad

2.47
A.Y. 2009-2010

The Central Excise Act 1944

Excise duty on Polyester Tops

Central Excise and Customs Appellant Tribunal Ahmedabad

3.31

(viii) In our opinion and according to the information and explanation given to usthe Company has not defaulted in repayment of dues to a financial institution banksGovernment or debenture holder during the year.

(ix) In ouropinion and according to the information and explanation given to usthe term loans were applied for the purposes for which loans were raised.

(x) Based upon the audit procedures performed and according to the information andexplanations given by the management we report that no fraud on or by the Company hasbeen noticed or reported during the 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 usthe Company 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 sections177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableInd AS.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has complied with the provisions ofsection 42 of the Companies Act 2013 in respect of preferential allotment of sharewarrants out of which some warrant holdershavepartly converted warrants into equityshares during the year under audit.As at 31st March 2020 outstanding moneyreceived towards share warrants were amounting to Rs. 112.50 lakhs. The amount so raisedhave been used for the purpose for which the amount was raised.

(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 Orderis not applicable.

(xvi) The Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.

 

ForDhirubhai Shah & CoLLP

Chartered Accountants

Firm's registration number: 102511W/W100298

Harish B Patel

Partner

Membership number: 014427

Place: Vadodara

Date:30thJune 2020

Annexure-B to the Auditors' Report

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 Shri DineshMills Limited ("the Company") as of 31stMarch 2020in conjunction withour audit of the standalone 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 controlstatedin the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required 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 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 standalone financial statements whether due to fraudorerror.

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 purposesin 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 authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 maydeteriorate.

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 31 March 2020 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.

 

ForDhirubhai Shah & CoLLP

Chartered Accountants

Firm's registration number: 102511W/W100298

Harish B Patel

Partner

Membership number: 014427

Place: Vadodara

Date: 30th June 2020

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