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Spice Islands Apparels Ltd.

BSE: 526827 Sector: Industrials
NSE: N.A. ISIN Code: INE882D01017
BSE 00:00 | 26 Mar 15.50 0
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NSE 05:30 | 01 Jan Spice Islands Apparels Ltd
OPEN 15.50
PREVIOUS CLOSE 15.50
VOLUME 1
52-Week high 23.65
52-Week low 11.20
P/E
Mkt Cap.(Rs cr) 7
Buy Price 11.75
Buy Qty 7.00
Sell Price 15.50
Sell Qty 299.00
OPEN 15.50
CLOSE 15.50
VOLUME 1
52-Week high 23.65
52-Week low 11.20
P/E
Mkt Cap.(Rs cr) 7
Buy Price 11.75
Buy Qty 7.00
Sell Price 15.50
Sell Qty 299.00

Spice Islands Apparels Ltd. (SPICEISLANDSAP) - Auditors Report

Company auditors report

To the Members of Spice Islands Apparels Limited

Report on the Audit of the Financial Statements Opinion

We have audited the financial statements of Spice Islands Apparels Limited("theCompany") which comprise the Balance Sheet as at 31st March 2019 and the Statementof Profit and Loss (including other comprehensive income) Statement of Changes in Equityand Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.

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 2019 and loss (including other comprehensive income) changes in equity and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters (‘KAM') are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

Key Audit Matters How our audit addressed the key audit matter
Going Concern We have performed the following key procedures:
The Company was earlier operating from three units Bengaluru being one of them. During the year it ceased its operations from the said unit. 1. We considered whether events or conditions exist that may cast significant doubt on the entity's ability to continue as a going concern.
Further the Company has booked a significant operating loss during the year. 2. Evaluated managements assessment of the Company's ability to continue as a going concern and in doing so considered if the management's assessment includes all relevant information.
Considering the judgment and estimates involved as a part of determination of going concern concept it is considered to be a key audit matter. 3. Evaluated Management's plan for future action including efforts to streamline its process reduce expenditures reduce reliance on major customers disposing off assets.

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

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon. Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon. In connection with our auditof the financial statements our responsibility is to read the other information and indoing so consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of Management for the 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 financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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.

In preparing the financial statements management is responsible for assessing theCompany'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 the Company's financialreporting 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 scepticism 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such 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.

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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen 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 Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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 purposes of our audit.

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c. The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account.

d. In our opinion the aforesaid financial statements comply with the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e. On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (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 ourseparate Report in "Annexure B".

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 of pending litigations on its financialposition in its financial statements Refer Note 33 to the financial statements;

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The disclosures in the financial statements regarding holdings as well as dealingsin specified bank notes during the period from 8 November 2016 to 30 December 2016 havenot been made in these financial statements since they do not pertain to the financialyear ended 31 March 2019.

For NSVM & Associates
Chartered Accountants
Firm registration number: 010072S
G.C.S Mani
Partner Place: Bengaluru
Membership No: 036508 Date: 29th May 2019

Annexure A to the Independent Auditor's Report of even date to the members of SpiceIslands Apparels Limited on the financial statements for the year ended 31 March 2019

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report 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 programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years which inour opinion is reasonable having regard to the size of the Company and the nature of itsfixed assets. No material discrepancies were noticed on such verification.

c. The title deeds of immovable properties (which are included under the head‘Property Plant and Equipment') are held in the name of the Company.

(ii) As explained to us the inventories have been physically verified by theManagement at reasonable intervals during the year. In our opinion the frequency of suchverification is reasonable. The discrepancies noticed on such physical verificationbetween physical stock and book records were not material and have been adequately dealtwith in the books of account.

(iii) The Company has not granted loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Companies Act2013.

(iv) In respect of loans investments and guarantees the provisions of Section 185 and186 of the Companies Act 2013 have been complied with.

(v) The Company has not accepted any deposits to which the provisions of Section 73 to76 or any other relevant provisions of the Companies Act and the rules framed there underand the directions issued by the RBI are applicable. Hence paragraph 3(v) of CARO is notapplicable to the Company.

(vi) The Central Government has not prescribed the maintenance of cost records undersec n148(1)ofthe o Act 2013 for any of the products of the company. Thus paragraph 3(vi)of CARO is not applicable to the company.

(vii) The Company has generally been regular in depositing with appropriate authoritiesundisputed statutory dues including Provident Fund Employees State Insurance Income TaxGoods and Service Tax Customs Duty Cess and other material statutory dues applicable toit.

a. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Income-Tax Service-Tax Goods& Service Tax and other statutory dues have been regularly deposited during the yearby the Company with the appropriate authorities.

b. On the basis of our examination of the documents and records of the Company thereare no dues of Income Tax Sales Tax Service Tax Customs Duty Goods and Service TaxExcise Duty and Cess which have not been deposited on account of an any dispute except asenumerated herein below which are pending before respective authorities as mentioned thereagainst:

Name of the statute Nature of dues Rs Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Demand under section 156 against order under section 143(3) 764765 AY 2012-13 Commissioner of Income Tax – Appeals 8 Mumbai

(vii) In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to its any banks and financialinstitutions. The Company did not have outstanding loans or borrowings from governmentduring the year.

(ix) According to the information and explanations given to us the Company has notraised any money by way of public issue or further public offer (including debtinstruments) during the year. Further the Company has not borrowed any term loan duringthe year.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.

(xi) According to the information & explanations given 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 clause 3(xii) of the Order is not applicable.

(xiii) All transactions with the related parties are in compliance with Section 188 and177 (where applicable) of Companies Act 2013 and the details thereof have been disclosedin the financial statements as required by the Accounting standards and Companies Act2013.

(xiv) According to the information and explanations give 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) ofthe Order is not applicable.

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

For NSVM & Associates
Chartered Accountants
Firm registration number: 010072S
G.C.S Mani
Partner Place: Bengaluru
Membership No: 036508 Date: 29th May 2019

Annexure B to the Independent Auditors' Report

(Referred to paragraph 1(f) under ‘Report on other regulatory requirements'Section of our report to the members of Spice Islands Apparels Limited of even date)

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 controls over financial reporting of SpiceIslands Apparels Limited ("the Company") as of 31 March 2019 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the ‘Guidance Note') issued by the Institute of Chartered Accountants ofIndia.

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.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the company based on our audit. We conducted our audit inaccordance with the Guidance Note on audit of internal financial controls and theStandards on Auditing issued by Institute of Chartered Accountants of India and deemed tobe prescribed under Section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 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 andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

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.

Opinion

In our opinion to the best of information and according to the explanations given tous the Company has in all material aspects an adequate internal financial control systemover financial reporting as at March 31 2019 based on the internal control overfinancial reporting criteria established by the company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For NSVM & Associates
Chartered Accountants
Firm registration number: 010072S
G.C.S Mani
Partner Place: Bengaluru
Membership No: 036508 Date: 29th May 2019