on the Quarterly and Year to Date Annual Financial Results of theCompany pursuant to Regulation 33 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (as amended)
The Members of VISHAL FABRICS LIMITED
Report on audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements ofVishal fabrics Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2022 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year thenended and a summary of significant accounting policies and other explanatory information(herein after referred to as "the Standalone Financial Statements").
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2022and its profit total comprehensive income changes in equity and its cash flows for theyear ended on that date.
Basis for opinion
We conducted our audit in accordance with the Standards on Auditing('SAs') specified under Section 143(10) of the Act. Our responsibilities under thosestandards are further described in the "Auditor's Responsibilities for the Audit ofthe financial Statement" section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia ('the ICAI') together with the ethical requirements that are relevant to our auditof the financial statements under the provisions of the Act and the rules thereunder andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence obtained by us is sufficientand appropriate to provide a basis for our opinion.
Information other than the Financial Statements and Auditor's Reportthereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Board'sReport and Corporate Governance Report but does not include Standalone FinancialStatements and our auditor's report thereon.
Our opinion on the Standalone Financial Statements does notcover the other information and we do not express any form of assurance conclusionthereon.
In connection with our audit of the Standalone FinancialStatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the Standalone FinancialStatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.
If based on the work we have performed we conclude that thereis a material misstatement of this other information we are required to report that fact.We have nothing to report in this regard.
Responsibility of Management for Standalone Financial Statements
The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act. 2013 ("the Act") with respect to thepreparation and presentation of these standalone financial statements that give a true andfair view of the financial position financial performance and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularitiesselection and application of appropriate accounting policies; making judgements andestimates that are responsible and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative 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 standalone FinancialStatement
Our objectives are to obtain reasonable assurance about whether theFinancial Statement as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith Standards on Auditing specified under Section 143(10) of the Act will always detecta material misstatement when it exists. Misstatements can arise from fraud or error andare considered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of theseFinancial Statement.
A further description of the auditor's responsibilities for the auditof the financial statements is included in Annexure A. This description forms part of ourauditor's report.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the Annexure B 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 explanationswhich to the best of our knowledge and belief were necessary for the purpose of our audit.
b) In our opinion proper books of account as required by law have beenkept by the Company so far as appears from our examination of those books;
c) The balance sheet the statement of profit and loss including OtherComprehensive Income statement of changes in equity and the cash flow Statement dealtwith by this Report are in agreement with the books of account;
d) In our opinion the aforesaid standalone financial statements complywith the Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe companies (Accounts) Rules 2015 as amended;
e) On the basis of written representations received from the directorsas on March 31 2022 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2022 from being appointed as a director in terms of Section164 (2) of the Act; and
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure C". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended Inour opinion and to the best of our information and according to the explanations given tous the remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
i) The Company does not have any pending litigations for whichprovision have not been made which would impact its financial position.
ii) The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any.
iii) The Provisions of transfer of funds to Investor Education andProtection Fund not applicable to the Company.
iv) (a) The Management has represented that to
the best of its knowledge and belief no funds (which are materialeither individually or in the aggregate) have been advanced or loaned or invested (eitherfrom borrowed funds or share premium or any other sources or kind of funds) by the Companyto or in any other person or entity including foreign entity("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;
(b) The Management has represented that to the best of its knowledgeand belief no funds (which are material either individually or in the aggregate) havebeen received by the Company from any person or entity including foreign entity("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11(e) as providedunder (a) and (b) above contain any material misstatement.
v) The dividend declared and paid during the year by the company is incompliance with the provision of section 123 of the Companies Act 2013.
Annexure "A" to the Independent Auditor?s Report
Responsibilities for Audit of Financial Statement
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has internal financial controls with reference to FinancialStatements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
Annexure "B" to the Independent Auditor?s Report
The Annexure referred to in our Independent Auditor's Report to themembers of the Company on the financial statements for the year ended 31 March 2022 wereport that;
(i) In respect of Fixed Assets:
(a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant and Equipmentand relevant details of right-of-use assets.
(B) The Company has maintained proper records showing full particularsof intangible assets.
(b) As per the information and explanations given to us assets havebeen physically verified by the management during the year as per regular program ofverification which in our opinion is reasonable having regard to the size of the companyand the nature of its assets. No material discrepancies were noticed on such verification.
(c) Based on our examination of the documents provided to us we reportthat the title in respect of self-constructed buildings and title deeds of all otherimmovable properties (other than properties where the company is the lessee and the leaseagreements are duly executed in favour of the lessee) disclosed in the financialstatements included under Property Plant and Equipment are held in the name of theCompany as at the balance sheet date.
(d) Company has not revalued its Property Plant and Equipment(including Right of Use assets) and intangible assets during the year.
(e) No proceedings have been initiated or are pending against thecompany for holding any benami property under the Benami Transactions (Prohibition) Act1988 (45 of 1988) and rules made thereunder.
(ii) In respect of Inventory:
a) As explained to us inventories have been physically verified duringthe year by the management at reasonable intervals. In our opinion the frequency ofverification is reasonable. As informed to us there were no material discrepancies noticedon verification between the physical stocks and the book records and any discrepanciesfound has been properly dealt within the books of accounts.
b) According to the information and explanations given to us and on thebasis of our examination of the records of the Company the Company has been sanctionedworking capital limits in excess of five crore rupees in aggregate from banks on thebasis of security of current assets. In our opinion the quarterly returns or statementsfiled by the Company with such banks are in agreement with the books of account of theCompany.
(iii) In respect of the loans secured or unsecured granted by thecompany to companies firms or other parties covered in the register maintained u/s. 189of the Companies Act 2013:
(a) During the year under audit the Company has not granted any loanssecured or unsecured to the companies firms and other parties covered in the registermaintained under section 189 of the Companies Act 2013 hence clause 3 (iii) (a) (b)(c) (d) (e) (f)of the Companies (Auditor's Report) Order 2020 are not applicable.
iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theAct with respect to the loans and investments made.
v) According to the information and explanation given to us thecompany has not accepted any deposit from the public during the year. Therefore theprovisions of clause 3 (v) of the order is not applicable.
vi) The central government has prescribed maintenance of cost recordsunder section 148(1)(d) of the companies act 2013 in respect of certain manufacturingactivities of the company. Company has obtained cost audit report for the financial year2020-21 during the year. We have broadly reviewed the accounts and records of the companyin this connection and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. We have not however carried out detailedexamination of the same.
vii) According to the information and explanations given to us inrespect of statutory dues:
(a) The company is generally regular in depositing the undisputedstatutory dues including Provident Fund Employees State Insurance Income Tax Goods& Service Tax Custom Duty Cess and any other statutory dues with the appropriateauthorities. According to the information and explanations given to us no undisputedamounts payable in respect of afore mentioned dues were outstanding as at 31St March 2022for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us detailsof statutory dues that have not been deposited on account of disputes are as under: -
|Sr. .. Name of The Statute No. ||Nature of Dues ||Amount ||Forum Where Dispute is Pending ||Remark |
|1 Income Tax Act 1961 ||Income Tax ||216510 ||CPC ||AY 2018 |
|3 Income Tax Act 1961 ||Income Tax ||1604680 ||CPC ||AY 2020 |
(viii) According to the information and explanations given to us andthe records of the Company examined by us there are no transactions in the books ofaccount that has been surrendered or disclosed as income during the year in the taxassessments under the Income Tax Act 1961 that has not been recorded in the books ofaccount.
(ix) (a) In our opinion and according to the information andexplanations given to us the company has not defaulted in repayment of dues to financialinstitutions or banks. As there are no debentures the question of repayment does notarise.
(b) According to the information and explanations given to us thecompany is not declared willful defaulter by any bank or financial institution or otherlender;
(c) According to the information and explanations given to us termloans were applied for the purpose for which the loans were obtained.
(d) According to the information and explanations given to us fundsraised on short term basis has not been utilized for long term purposes.
(e) According to the information and explanations given to us wereport that the Company has no Subsidiaries therefore clause 3(ix)(e) of the Order is notapplicable.
(f) According to the information and explanations given to us andprocedures performed by us we report that the Company has not raised loans during theyear on the pledge of securities held in its subsidiaries as defined under the CompaniesAct 2013. Accordingly clause 3(ix)(f) of the Order is not applicable.
(x) (a) The Company has not raised any money by way of initial publicoffer or further public offer (including debt instruments Accordingly clause 3(x)(a) ofthe Order is not applicable.
(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly clause 3(x)(b) of the Order is not applicable.However Company has issued 2 bonus shares against 1 share to the existing shareholders ofthe company during the year under consideration.
(xi) (a) Based on examination of the books and records of the Companyand according to the information and explanations given to us considering the principlesof materiality outlined in Standards on Auditing we report that no fraud by the Companyor on the Company has been noticed reported during the course of the Audit.
(b) According to the information and explanations given to us noreport under sub-section (12) of Section 143 of the Companies Act 2013 has been filed bythe auditors in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors)Rules 2014 with the Central Government.
(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable.
(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.
(xiv) (a) Based on information and explanations provided to
us and our audit procedures in our opinion the Company has aninternal audit system commensurate with the size and nature of its business.
(b) We have considered the internal audit reports of the Company issuedtill date for the period under audit.
(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.
(xvi) (a) The Company is not required to be registered under Section45-1A of the Reserve Bank of India Act 1934. Accordingly clause 3(xvi)(a) of the Orderis not applicable.
(b) The Company is not required to be registered under Section 45-IA ofthe Reserve Bank of India Act 1934. Accordingly clause 3(xvi)(b) of the Order is notapplicable.
(c) The Company is not a Core Investment Company (CIC) as defined inthe regulations made by the Reserve Bank of India. Accordingly clause 3(xvi)(c) of theOrder is not applicable.
(d) According to the information and explanations provided to us duringthe course of audit the Group does not have any CIC. Accordingly the requirements ofclause 3(xvi)(d) are not applicable.
(xvii) The Company has not incurred cash losses in the current and inthe immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors duringthe year. Accordingly clause 3(xviii) of the Order is not applicable.
(xix) On the basis of the financial ratios ageing and expected datesof realisation of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors andManagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which causes us to believe that any materialuncertainty exists as on the date of the audit report indicating that Company is notcapable of meeting its liabilities existing at the date of balance sheet as and when theyfall due within a period of one year from the balance sheet date. We however state thatthis is not an assurance as to the future viability of the Company.
We further state that our reporting is based on the facts up to thedate of the audit report and we neither give any guarantee nor any assurance that allliabilities falling due within a period of one year from the balance sheet date will getdischarged by the Company as and when they fall due.
(xx) In our opinion and according to the information and explanationsgiven to us there is no unspent amount under sub-section (5) of Section 135 of theCompanies Act 2013 pursuant to any project. Accordingly clauses 3(xx)(a) and 3(xx)(b) ofthe Order are not applicable.
Annexure "C" to the Auditors? Report
Report on the Internal Financial Controls under Clause (i) ofsub-section 3 of Section 143 of the Companies Act 2013 ('the Act')
We have audited the internal financial controls over financialreporting of M/S. VISHAL FABRICS LIMITED ("the Company") as of 31 March2022 in conjunction with our audit of the standalone financial statements of the Companyas at and for the year ended that date.
In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls were operating effectively as at 31 March 2022 based on theinternal financial controls with reference to standalone financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (the "Guidance Note").
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal controls over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India ('ICAI').These responsibility 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 the 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.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the 'Guidance Note') and the Standards of Accounting 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 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding or internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls over Financial Statements
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorizations ofthe Management and directors of the Company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition use or dispositionof the Company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2022
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 Reportingissued by the Institute of Chartered Accountants of India.
| ||For and on Behalf of |
| ||Nahta Jain & Associates |
| ||Chartered Accountants |
| ||Firm Regn. No. 106801W |
|Place : Ahmedabad ||(CA. Gaurav Nahta) |
|Date : 19Th May 2022 ||Partner |
|UDIN: 22116735AJFLFD9607 ||M.No.116735 |