To the Members of The Western India Cottons Limited Pappinisseri.
Report on the Financial Statements
We have audited the accompanying financial statements of THE WESTERN INDIA COTTONSLIMITED PAPPINISSERI ("the Company") which comprise the Balance Sheet asat 31st March 2017 and the Statement of Profit and Loss and Cash Flow Statement for theyear then ended and a summary of significant accounting policies and other explanatoryinformation.
Management's Responsibility 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 and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation of the financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theCompany's Directors as well as evaluating the overall presentation of the financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the financial statements.
Basis for Qualified Opinion
1. Confirmation in respect of balances outstanding under trade receivables advancesand liabilities has not been obtained.
2. The segment information required to be disclosed as per the Accounting StandardAS17- Segment Reporting' has not been disclosed in the financial statements
3. The impairment loss if any in respect of assets has not been assessed and adjustedin the accounts as required in the Accounting Standard AS 28-Impairment of Assets'.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basis forQualified Opinion paragraph the aforesaid financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2017 and its profit and its cash flows for the year ended onthat date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' 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 matters specified inparagraphs 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 except for the matters described in the Basis for QualifiedOpinion paragraph obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;
b. Except for the possible effects of the matters described in the Basis for QualifiedOpinion paragraph above in our opinion proper books of account as required by law havebeen kept by the company so far as appears from our examination of those books;
c. The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account.
d. Except for the possible effects of the matters described in the Basis for QualifiedOpinion paragraph in our opinion the Balance Sheet the Statement of Profit and Loss andthe Cash Flow Statement comply with the Accounting Standards specified under section 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014
e. Except for the matters described in the Basis for Qualified Opinion paragraph abovein our opinion the other matters and the financial transactions may not have an adverseeffect on the functioning of the Company;
f. On the basis of written representations received from the directors as on 31st March2017 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31st March 2017 from being appointed as a director in terms of section 164(2) ofthe Act;
g. The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above;
h. Our report with respect to the adequacy of internal financial controls overfinancial reporting of the company and the operating effectiveness of such controls isgiven in Annexure-B
i. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule11of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
1. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements-Refer Note 25 to the financial statements
2. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
3. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
4. The company has provided the requisite disclosures in the financial statements as toholdings as well as dealings in specified bank notes during the period from 8thNovember2016 to 30th December 2016 (Note 32) and these are in accordance with the books ofaccount maintained by the company.
For T.K. Menon & Co.
Firm Regn. no:002067S
ANNEXURE A' TO AUDITORS' REPORT FOR THE YEAR ENDED 31 MARCH 2017
Referred to in our report of 8th August 2017
In terms of the information and explanations sought by us and given by the company andthe books and records examined by us in the normal course of audit and to the best of ourknowledge and belief we state that:
(i) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management during the year.No material discrepancies were noticed on such verification. In our opinion the frequencyof verification is reasonable.
(c) The title deeds of immovable properties are held in the name of the company.
(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. No material discrepancy wasnoticed on such physical verification.
(iii) The company has not granted any loan secured or unsecured to companies firmsand limited liability partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013.
(iv) The company has not given any loan or guarantee to directors or any person or bodycorporate during the year. The company has complied with the provisions of section 186 ofthe Companies Act 2013 in respect of the investment made in the shares of IDBI Bank Ltd.
(v) The company has not accepted deposits from the public.
(vi) The provisions of section 148(1) of the Companies Act 2013 regarding maintenanceof cost records are not applicable to the company.
(vii) (a) The company was regular in depositing with the appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax service tax value added tax and other statutory dues during the year. However therewas a short delay in payment of provident fund contribution for the month of December 2016on account of technical issues. The company was not required to deposit duty of customsand duty of excise during the year. No undisputed amounts payable in respect of statutorydues were in arrears as at 31 March 2017 for a period of more than six months from thedate they became payable.
(b) There were no dues of value added tax service tax customs duty and excise dutywhich have not been deposited on account of dispute. In respect of income tax thefollowing disputed amount was not deposited with the appropriate authority as at 31 March2017:
|Nature of statute ||: Incometax |
|Nature of dues ||: Incometax and interest |
|Amount ||: Rs.5837031/- |
|Period for which the amount relates ||: 2010-'11 (Assessment year 2011-'12) |
|Forum where dispute is pending ||: Commissioner of Incometax (Appeals) Kozhikode |
(viii) In our opinion the company has not defaulted in repayment of loans orborrowings to any financial institution bank or government. The company has not issueddebentures.
(ix) The company has not raised moneys by way of initial public offer or further publicoffer including debt instruments during the year. The short-term loan taken by thecompany has generally been applied for the purpose for which it was raised.
(x) No fraud by the company or no fraud on the company by its officers or employees hasbeen noticed or reported during the year.
(xi) The company has not paid/provided any managerial remuneration other than fee forattending meetings of the Board/Committee. The company was not therefore required to getthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Companies Act 2013.
(xii) The company is not a Nidhi company and hence clause (XII) of the Companies(Auditor's Report) Order 2016 is not applicable to the company.
(xiii) In our opinion the transactions with the related parties are in compliance withsections 177 and 188 of Companies Act 2013 and the details of such transactions have beendisclosed in the financial statements as required by the applicable accounting standards.
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year and hence reportingunder clause
(XIV) of the Companies (Auditor's Report) Order 2016 is not applicable to the company.
(xv) In our opinion the company has not entered into any non-cash transactions withdirectors or persons connected with them during the year.
(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934
For T.K. Menon & Co.
Firm Regn. no:002067S
ANNEXURE B' TO AUDITORS' REPORT FOR THE YEAR ENDED 31 MARCH 2017
Referred to in our report of 8th August 2017
Report on Internal Financial Controls over Financial Reporting
We have audited the internal financial controls over financial reporting of The WesternIndia Cottons Ltd. ("the Company") as of 31 March 2017 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing both issued by TheInstitute of Chartered Accountants of India and deemed to be prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting include obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement 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 (i) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (ii) 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 authorisations ofmanagement and directors of the company; and (iii) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2017 based on the internal controlover financial 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 T.K. Menon & Co.
Firm Regn. no:002067S