To the Members of Shri Dinesh Mills Limited Report on the Standalone Ind As FinancialStatements Opinion
We have audited the accompanying standalone financial statements of Shri Dinesh MillsLimited ("the Company") which comprises of the balance sheet as at 31st March2019 and the statement of Profit and Loss (including other comprehensive income) and theStatement of changes in equity and statement of cash lf ows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand 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 trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ( " Ind AS") and other accounting principles generally accepted inIndia of the state of affairs of the Company as at 31 March 2019 and its profit totalcomprehensive income its cash flows and the changes in equity for t h e year ended onthat date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing S ( As) 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 if nancial statements under the provisions of the Act and therules there under and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that h t e auditevidence we have obtained is sufficient and appropriate to provide a basis for our opinionon the standalone 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 signifi- |
cant accounting policies and note 9 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.
Valuation of Inventory in accordance with Ind
AS 2 has thus been considered as a key audit
|Our audit procedures comprised of the following: |
|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 pe r 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. Evaluation of uncertain tax positions ||Principal Audit Procedures |
|The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Refer Notes 38 of the financial statement of h t e company. ||We performed the following substantive procedures: |
| || Obtained details of completed tax assessments and demands for the year ended March 31 2019 from management. We involved our internal experts to challenge the management's underlying assumptions in estimating the tax provision and the possible outcome of the disputes. Our Internal experts also considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions. |
| ||Conclusion |
| ||We agree with management's evaluation |
Management's Responsibility for the Standalone Financial 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 ir regularities; 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 t h at give a true and fair viewand are free from material misstatement whether due to fraud or error. In preparing thefinancial statements management is responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso. Those Board of Directors are also responsible for overseeing the Company's f i nancialreporting 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 f r om material misstatement whether due to fraud orerror and to issue an auditor's report that includes our opinion. Reasonable assurance isa high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from f r aud or error and are considered material if individually or in theaggregate they could reasonably be expected t o influence the economic decisions of userstaken on the basis 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 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 for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional 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 controls 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 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.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonablyknowledgeable user of the standalone f i nancial statements may be influenced.We consider quantitative materiality and qualitative factors in (i) planning the scope ofour audit work and in evaluating the results of our work; and (ii) to evaluate the effectof any identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and t i ming 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 e r quirements 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 t h e 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 o t 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 of those 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 31stMarch 2019 taken on record by the Board of Directors none ofthe directors is disqualified as on 31stMarch 2019 from being appointed as a director interms of Section 164 (2) of the Act; f. With respect to the adequacy of the internalfinancial controls over financial reporting of the Company and the operating effectivenessof such controls refer to our separate report in "Annexure B"; and g. Withrespect to the other matters to be included in the Auditor's Report in accordance withRule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the bestof our n i formation and according to the explanations given to us: i. the Company hasdisclosed the impact wherever necessary of pending litigations on its financial positionin its financialstatements; ii. the Company has made provision as required under theapplicable law or Indian Accounting Standards for material foreseeablelosses if any onlong-term contracts including derivative contracts; i i. There has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company.
| ||For |
| ||Dhirubhai Shah & Co. LLP |
| ||Chartered Accountants |
| ||Firm's Registration Number: 102511W/W100298 |
| ||Harish B Patel |
|Place : Vadodara ||Partner |
|Date: 25th May 2019 ||Membership Number: 014427 |