Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Flexituff International Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with Rule
7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended, and the accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs (financial position) of the Company as at March 31, 2018, and its loss (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Other Matter
The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these standalone Ind AS financial statements are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 for the year ended March 31, 2016 and March 31, 2017 on which we issued an unmodified audit opinion vide our reports dated May 20, 2016 and May 30, 2017 respectively on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have also been audited by us.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. 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 best of 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 the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, the Statement of Cash Flow and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended.
(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Aâ
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its standalone Ind AS financial statements - Refer Note 40 to the standalone Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of sub-section 11 of section 143 of the Act, we give in the âAnnexure Bâ, a statement on the matters specified in paragraphs 3 and 4 of the Order.
[Referred to in paragraph 1(f) under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorsâ Report]
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Flexituff International Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI) (the âGuidance Noteâ. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs 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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note.
i. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) All the fixed assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
ii. The inventory (excluding stocks with third parties), has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on verification between the physical stocks and the book records.
iii. The Company has granted loans, secured or unsecured to a company and Limited Liability Partnerships covered in the register maintained under section 189 of the Act.
(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the rate of interest and other terms and conditions on which the loans have been granted to a company and Limited Liability Partnerships covered in the register maintained under section 189 of the Companies Act, 2013 are not, prima facie, prejudicial to the interest of the Company.
(b) In the case of the loans granted to a company and Limited Liability Partnerships covered in the register maintained under section 189 of the Companies Act, 2013, schedule of repayment of principal and payment of interest have been stipulated and the borrowers have been regular in the payment of the principal and interest.
(c) There are no amounts overdue for more than ninety days in respect of the loans granted to a company and Limited Liability Partnerships covered in the register maintained under section 189 of the Companies Act.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of loans, investments, guarantees and security made.
v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under.
vi. The provisions of sub-section (1) of section 148 of the Act are not applicable to the Company as the Central Government of India has not specified the maintenance of cost records for any of the products of the Company. Accordingly, the provisions stated in paragraph 3 (vi) of the Order are not applicable to the Company.
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, goods and service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable to it.
According to the information and explanation given to us, no undisputed amounts are payable in respect of provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, goods and service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues which were applicable to it were in arrears, as at March 31, 2018 for a period of more than six months from the date they became payable.
(b) According to the information and explanation given to us, there are no dues of service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute. However, according information and explanation given to us and the records of the Company examined by us, the dues outstanding of income-tax, sales-tax, value added tax, cess and any other statutory dues on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount in INR million |
Period to which the amount relates |
Forum where dispute is pending |
Income tax, penalty and interest thereon1 |
4.25 |
AY 2005-06 to 07-08, AY 201011, AY 2012-13, AY 14-15 |
CIT (A) |
|
Income tax Act |
Income tax, penalty and interest thereon1 |
8.03 |
AY 2003-04 |
Madhya Pradesh High Court |
Income tax, penalty and interest thereon1 |
39.29 |
AY 2004-05, AY 2005-06 |
ITAT & CIT(A) |
Central Sales Tax Act, 1956 |
Sales tax2 |
22.97 |
FY 2009-10 to 2014-15 |
Joint Commissioner (Appeal) Haldwani |
Sales tax2 |
0.01 |
FY 2006-07 |
The Appellate Board M.P. Tax Tribunal, Bhopal |
|
M.P. commercial Tax Act, 1994 |
Sales tax3 |
5.39 |
FY 200607 and FY 2009-10 |
The Appellate Board M.P. Tax Tribunal, Bhopal |
Sales tax3 |
1.06 |
FY 2015-16 |
The Appellate Authority and Additional commissioner of commercial tax, Indore division |
|
Uttarakhand VAT Act, 2005 |
Sales tax4 |
2.92 |
FY 2010-11 to FY 201415 |
Deputy (Joint) Commissioner (Appeal) Haldwani |
M.P. Entry Tax Act, 1976 |
Entry tax5 |
0.28 |
FY 2010-11 |
The Appellate Authority and Additional commissioner of commercial tax, Indore division |
Entry tax5 |
9.04 |
FY 2006-07 to FY 200910 |
The Appellate Board M.P. Tax Tribunal, Bhopal |
Amount disclosed is net of amount paid under protest of Rs. 39.45 million
2 Amount disclosed is net of amount paid under protest of Rs. 9.32 million
3Amount disclosed is net of amount paid under protest of Rs. 3.09 million
4Amount disclosed is net of amount paid under protest of Rs. 11.24 million
5Amount disclosed is net of amount paid under protest of Rs. 4.57 million
viii. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the financial institution and bank. The Company does not have any outstanding debentures during the year.
ix. In our opinion, money raised by way of term loans during the year have been applied for the purpose for which they were raised. The Company has not raised any money by way initial public offer or further public offer (including debt instruments) during the year.
x. During the course of our audit, examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees.
xi. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, the provisions stated in paragraph 3(xii) of the Order are not applicable to the company.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xiv. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, provisions stated in paragraph 3(xv) of the Order are not applicable to the Company.
xvi. In our opinion, the Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions stated in paragraph clause 3 (xvi) of the Order are not applicable to the Company.
For MSKA& Associates For Kailash ChandJain & Co.
(Formerly known as MSKA & Chartered Accountants
Associates) Firm Registration No. 112318W
Chartered Accountants
Firm Registration No.105047W
Amrish Anup Vaidya Rajeev Kumar Dubey
Partner Partner
Membership No.: 101739 Membership No.: 407139
Place: Pithampur Place: Pithampur
Date: May 30, 2018 Date: May 30, 2018
Mar 31, 2016
To the Members of Flexituff International Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Flexituff International Limited_(âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. 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 best of 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 the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash 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 Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) In our opinion, there are no matters that may have an adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Aâ
(h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its standalone financial statements - Refer Note 29 to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government interms of sub-section 11 of section 143 of the Act, we give in the âAnnexure Bâ, a statement on the matters specified in paragraphs 3 and 4 of the Order.
ANNEXURE A TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF (âthe Companyâ)
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
To the Members of Flexituff International Limited (âthe Companyâ)
We have audited the internal financial controls over financial reporting of (âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Companyâs Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companyâs 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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Qualified Opinion on adequacy and therefore operating effectiveness of Internal Financial Controls Over Financial Reporting
According to the information and explanations given to us and based on our audit, the following weaknesses have been identified as at March 31, 2016:
a) The Company needs to strengthen the process with respect to vendor selection and analysis of quotation in relation to purchase of stores and spares, consumables and fixed assets. These could potentially result in material misstatements in trade payable, consumption and fixed assets.
b) The internal control system for work-in-progress and finished goods inventories with regard to stages of completion, movement of inventories, and identification and allocation of overheads to inventories will have to be further strengthened. These could potentially result in material misstatements in the consumption and valuation of work-in-progress and finished goods inventories. However, the Company has identified the gaps in the process with respect to allocation of overheads to inventory.
In our opinion, except for the effects of the weaknesses described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Explanatory paragraph
We also have audited, in accordance with the Standards on
Auditing issued by the Institute of Chartered Accountants of India, as specified under section 143(10) of the Act, the standalone financial statements of the Company, which comprise the Balance Sheet as at March 31, 2016, and the related Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, and our report dated May 20, 2016 expressed true and fair opinion on the financial statements.
ANNEXURE B TO INDEPENDENT AUDITORS'' REPORT
[Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorsâ Report of even date to the members of Flexituff International Limited on the financial statements for the year ended March 31, 2016]
i. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) All the fixed assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
ii. The inventory, excluding stocks with third parties, has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on verification between the physical stocks and the book records.
iii. The Company has granted loans to a company covered in the register maintained under section 189 of the Companies Act, 2013.
(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the rate of interest and other terms and conditions on which the loans have been granted to a company covered in the register maintained under section 189 of the Companies Act, 2013 are not, prima facie, prejudicial to the interest of the Company.
(b) In the case of the loans granted to a company covered in the register maintained under section 189 of the Companies Act, 2013, schedule of repayment of principal and payment of interest have been stipulated and the borrowers have been regular in the payment of the principal and interest.
(c) There are no amounts overdue for more than ninety days in respect of the loans granted to a company covered in the register maintained under section 189 of the Companies Act.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of loans, investments, guarantees and security made.
v. In our opinion and according to the information and explanations given to us, there are no amounts outstanding which are in the nature of deposits as on March 31, 2016 and the Company has not accepted any deposits during the year.
vi. The provisions of sub-section (1) of section 148 of the Act are not applicable to the Company. Accordingly, the provisions stated in paragraph 3 (vi) of the order are not applicable to the Company.
vii. (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable to it.
According to the information and explanation given to us, no undisputed amounts are payable in respect of provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues which were applicable to it were in arrears, as at March 31, 2016 for a period of more than six months from the date they became payable.
(b) According to the information and explanation given to us, there are no dues of service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute. However, according information and explanation given to us and the records of the Company examined by us, the dues outstanding of income-tax, sales-tax, value added tax, cess and any other statutory dues on account of any dispute, are as follows:
Name of statute |
Nature of dues |
Rupees in Millions |
Period to which the amount relates |
Forum where dispute is pending |
Income Tax Act |
Assessment made by A.O. is further enhanced by CIT (A) U/s 68 in respect of Share Application money received |
20.62 |
AY 2004-05 & 2005-06 |
ITAT |
Income Tax Act |
Disallowances in respect of SEZ Loss U/s 10A |
1.07 |
AY 2006-07 |
CIT (A) |
Income Tax Act |
Non deduction of TDS on payment of Lease Rent to MPAKVN and Interest thereon |
0.35 |
AY 2005-06 to AY 2007-08 |
CIT (A) |
Income Tax Act |
Disallowances made by A.O.U/s 69A of Income Tax Act, in respect of Investment and certain expenses |
35.89 |
AY 2009-10 & 2010-11 |
CIT (A) |
Income Tax Act |
Disallowances made by A.O.U/s 14A of Income Tax Act, in respect of Investment and certain expenses |
3.19 |
AY 2013-14 |
CIT (A) |
M.P. Entry Tax Act, 1976 |
Entry tax levied on job work done for SEZ unit |
5.82 |
F.Y. 2006-07 to 2009-10 |
The Appellate Board, M.P. Tax Tribunal Bhopal / Indore |
M.P. Commercial Tax Act, 1994 |
Assessing Office has levied the tax on sale by SEZ unit in Domestic Area |
2.30 |
F.Y. 2006-07 |
The Appellate Board, M.P. Tax Tribunal Bhopal / Indore |
Central Sales Tax Act, 1956 |
Assessing Office has levied the tax on sale by SEZ unit in Domestic Area |
0.01 |
F.Y. 2006-07 |
The Appellate Board, M.P. Tax Tribunal Bhopal / Indore |
M.P. Entry Tax Act, 1976 |
Entry tax levied on job work done for SEZ unit |
1.07 |
F.Y. 2007-08 & 2010-11 |
The Appellate Authority and Additional Commissioner of Commercial Tax, Indore Division |
M.P. Entry Tax Act, 1976 |
Assessing Office has levied the tax on sale by SEZ unit in Domestic Area |
1.30 |
F.Y. 2008-09 |
The Appellate Authority and Additional Commissioner of Commercial Tax, Indore Division |
M.P. Commercial Tax Act, 1994 |
Tax Imposed on (a) sale by SEZ unit in Domestic Area (b) benefit not given of VAT output (c) ITR Amt. Disallowed and (d) Tax Imposed on non receipts of form "H" |
3.09 |
F.Y. 2009-10 |
The Appellate Board, M.P. Tax Tribunal Bhopal / Indore |
Uttarakhand VAT Act, 2005 |
Tax imposed on tax free item |
2.87 |
2010-11 to 2012-13 |
Deputy Commissioner- Appeal Haldwani |
Central Sales Tax Act, 1956 |
Tax imposed on non receipt of form C & tax free item |
26.80 |
2010-11 to 2012-13 |
Deputy Commissioner- Appeal Haldwani |
Uttarakhand VAT Act, 2005 |
Appeal for chargeability of tax on Sale of Narrow Woven Fabric |
5.59 |
2011-12 |
Deputy Commissioner- Appeal Haldwani |
Central Sales Tax Act, 1956 |
Appeal for tax charged on Purchase of Capital Civil Item, purchase under C form by FIL |
1.75 |
2009-10 & 2010-11 |
Deputy Commissioner- Appeal Haldwani |
viii. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the financial institution and bank. The Company does not have any outstanding debentures during the year.
ix. In our opinion, money raised by way of term loans during the year have been applied for the purpose for which they were raised. The Company has not raised any money by way initial public offer or further public offer (including debt instruments) during the year.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees during the course of our audit.
xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/ payable the following amounts for managerial remuneration to one of its whole time director, which is not in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act. The Company is in the process of obtaining necessary approval from shareholders for remuneration payable to its whole time director.
Payment made to |
Remuneration paid/ payable in excess of the limits prescribed (Rupees in Millions) |
Remuneration due for recovery as at 31s March, 2016 (Rupees in Millions) |
Steps taken to secure the recovery of the amount |
Whole Time Director |
3.28 |
3.28 |
The Company is in the process of obtaining necessary approval from shareholders for remuneration payable to its whole time director |
xiii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
xiv. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xv. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company.
xvi. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
xvii. In our opinion, the Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company.
For MZSK & Associates For L.K. Maheshwari & Co.
Chartered Accountants Chartered Accountants
Firm Registration No.105047W Firm Registration No. 000780C
Amrish Vaidya Abhay Singi
Partner Partner
Membership No.: 101739 Membership No.: 079873
Place: Pithampur Place: Pithampur
Date: May 20, 2016 Date: May 20, 2016
Mar 31, 2015
We have audited the accompanying financial statements of M/s Flexituff
International Limited ('the Company'), which comprise the Balance Sheet
as at March 31, 2015, and the Statement of Profit and Loss and Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The company's Board of Directors is responsible for the matters stated
in Section 134 (5) of the Companies Act, 2013("the Act") with respect
to the preparation and presentation of these financial statements that
give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the
Accounting Principle Generally Accepted in India including Accounting
Standards referred to in Section 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014. This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
AUDITOR'S RESPONSIBILITY
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing specified under Section 143(10) of the
Act . Those Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company's preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2015;
b) In the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of I India in terms of section
(11) of Section 143 of the Act, we enclose in the Annexure a statement
on the matters specified 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 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 been
kept by the Company so far as it appears from our examination of those
books
c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
specified under section 133 of the Act, read with Rule 7 of the Company
(Accounts) Rules, 2014;
e) On the basis of written representations received from the directors
as on March 31, 2015 taken on record by the Board of Directors, none of
the directors is disqualified as on March 31, 2015 from being appointed
as a director in terms of section 164 (2) of I the Act; and
f) With respect to the other matters to be included in the Auditor's
Report in accordance with the Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, in our opinion and to the best of our
information and explanations given to us:
i) the Company has no pending litigations on its financial position in
its financial statements.
ii) the Company has made provision, as required under the applicable
accounting standards, for material foreseeable losses, if any, on long
term contracts including derivative contracts (refer note 27 (A) (i)).
iii) there has been no delay in transferring amounts, required to be
transferred, to the Investor 8j Protections by the Company.
ANNEXURE
TO THE INDEPENDENT AUDITOR'S REPORT
Referred to in Paragraph 1 under the heading of "report on other legal
and regulatory requirements" of our report of even date
i. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets have been physically verified by the management
during the year and there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. As informed, no material discrepancies
were noticed on such verification.
ii. (a) As explained to us, the management has conducted physical
verification of inventory at reasonable intervals during the year other
than those lying with Job Workers.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
iii. According to the information and explanation given to us, Company
has, during the year, not granted any loans, security or unsecured, to
companies, firm and other parties covered in the register maintained
under Section 189 of the Companies Act, 2013 ('the Act). Accordingly,
paragraph 3(iii)(a)(b) of the Order is not applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods..
v. The Company has not accepted any deposits from public. Thus,
paragraph 3(ii) of the Order is not applicable.
vi. According to information and explanation given to us, the Companies
is not required to maintain cost records under (Cost Records 8j Audit)
Rules, 2014, prescribed by the Central Government under Section 148 (1)
of the Act,
vii. (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
employees' state insurance, income- tax, sales-tax, wealth-tax, custom
duty, excise duty, VAT, cess and other material statutory dues
applicable to it.
(b) According to the records of the Company, the dues outstanding of
taxes on account of any dispute are as follows:
S. Name of Nature of dues Demand Amount Paid
No. the statute (Rs. in Millions) (Rs. in
Millions)
1 Income Tax Assessment made 16.05 3.98
Act by A.O. is further
enhanced by CIT
(A) in respect of
Share application
money received
SEZ Loss u/s
10A&80HHC
deduction_
2 Income Tax Disallowances 10.13 10.13
Act in respect of
Share Capital
Subscribed
during the year,
SEZ Loss u/s
10A&80HHC
deduction.
3 Income Tax Disallowances 9.88 1.33
Act in respect of
Share Capital
Subscribed
during the year.
4 Income Tax Disallowances 12.73 12.73
Act in respect of
Share Capital
Subscribed
during the year.
5 Income Tax Disallowances in 6.03 Nil
Act respect of SEZ
Loss u/s 10 A.
6 Income Tax Departmental 6.57 -NA-
Act Appeal against
appeal allowed
by IT AT in case
of Investment
made by certain
companies in
Equity Capital of
Company and
also against
deduction
allowed under
Section 80 IB in
Company's favor
by ITAT
7 Income Tax Non Deduction 0.71 0.35
TDS of TDS on
payment of Lease
Rent to MPAKVN
and Interest
thereon.
8 M.P. Entry tax levied 2.41 1.35
Entry Tax on job work done
Act, 1976 for SEZ unit
(U/s 21 Re-
open)
9 M.P. Assessing Office 3.83 1.53
commercial has levied the tax
Tax Act, on sale by SEZ
1994 unit in Domestic
(U/s 21 Re- Area open)
10 Central
Sales Assessing Office 0.02 0.008
Tax Act, has levied the
tax
(U/s 21 Re- on sale by SEZ
open) unit inDomestic
Area
11 M.P. Entry Entry tax levied 1.68 1.61
Tax Act, on job work done
1976 for SEZ unit
12 M.P. Entry tax levied 1.09 0.31
Entry Tax on job work done
Act, 1976 for SEZ unit
(U/s 21 Re-
open)
13 M.P. Assessing Office 1.96 1.96
commercial has levied the tax
Tax Act, on sale by SEZ unit
1994 in Domestic Area
14 M.P. Entry Entry tax levied 2.89 0.88
Tax Act, on job work done
1976 for SEZ unit
15 M.P. Assessing Office 1.73 0.43
Entry Tax has levied the tax
Act, 1976 on sale by SEZ
(U/s 21 Re- unit in Domestic
open) Area
16 M.P. Assessing Office 1.05 1.05
commercial has levied the tax
Tax Act, on sale by SEZ
1994 unit in Domestic
Area
17 M.P. Entry Entry tax levied 3.72 1.04
Tax Act, on job work done
1976 for SEZ unit
18 Central
Sales Tax imposed on 0.08 0.08
Tax Act, non receipts of
Form -H
19 M.P. VAT ITR Reversal 0.61 0.61
commercial on Job Work &
Tax Act, Stock Transfer
1994
20 M.P. Entry Entry tax levied 0.37 0.09
Tax Act, on job work done
1976 for SEZ unit
21 Central
Sales Tax imposed on 0.31 0.31
Tax Act, non receipts of
Form -H
22 Central
Sales Tax imposed on 0.20 0.20
Tax Act, non receipts of
Form -H
23 M.P. Tax imposed on 0.45 0.45
commercial non receipts of
Tax Act, Form -H
1994
24 Central
Sales Tax imposed on 0.97 0.97
Tax Act, non receipts of
Form -H
25 M.P. Tax imposed on 0.02 0.02
commercial non receipts of
Tax Act, Form -H
1994
26 Uttarakhand Tax imposed on 1.71 Nil
VAT Tax Free Item
Act,2005
27 Central
Sales Tax imposed on 26.75 Nil
Tax Act on non receipts
of Form C and
Tax Free Item
28 Central
Sales Appeal for 7.81 2.23
Tax Act Chargeability
of tax on sale of
narrow woven
fabric
29 Uttarakhand Assessment under 6.00 2.00
VAT Act,2005 Section 25(7) of
the Uttarakhand
Vat ACt for claim
of Vat Input not
paid by selling
party
Name of the Statute Period to which the Forum where dispute
Amount relates is pending
Income Tax ACt A.Y. 2004-05 ITAT
Income Tax Act A.Y. 2004-05 CIT (A)
Income Tax acT A.Y.2005-06 ITAT
Income Tax Act A.Y.2005-06 CIT (A)
Income Tax Act A.Y.2006-07 CIT (A)
iNCOME tAX A.Y.2003-04 M.P.HIGH COURT
Income Tax Act A.Y.2005-06 to A.Y. CIT(A)
TDS 2007-08
M.P. F.Y. 2006-07 The Appellate Board,
Entry Tax M.P. Tax Tribunal
Act 1976 Bhopal / Indore
(u/s) 21 Re-
open)
M.P.Commercial F.Y. 2006-07 The Appellate
tax Act 1994
(U/s 21 Reopen) Authority and Additional
Commissioner of
Commercial Tax, Indore
Division
Central Sales F.Y. 2006-07 The Appellate
Tax Act Authority and Additional
(U/s 21 Reopen Commissioner of
Commercial Tax, Indore
Division
M.P.Entry F.Y. 2007-08 The Appellate Board,
TAX Act 1976 M.P. Tax Tribunal
Bhopal / Indore
M.P Entry Tax F.Y. 2007-08 The Appellate
aCT,1976 Authority and
(u/S 21Reopen) Additional
Commissioner of
Commercial Tax,
Indore Division
M.P.Commercial F.Y. 2007-08 The Appellate Board,
Tax Act 1994 M.P. Tax Tribunal
Bhopal / Indore
M.P Entry F.Y. 2008-09 The Appellate Board,
Tax Act,1976 M.P. Tax Tribunal
Bhopal / Indore
M.P Entry Tax F.Y. 2008-09 The Appellate
Act, 1976 Authority and
(U/s 21 Reopen) Additional
Commissioner of
Commercial Tax,
Indore Division
M.P Commercial F.Y. 2008-09 The Appellate Board,
TAX Act,1999 M.P. Tax Tribunal
Bhopal / Indore
M.P.Entry F.Y. 2009-10 The Appellate Board,
Tax Act,1994
M.P Commercial
M.P. Tax Tribunal
Bhopal / Indore
Central Sales F.Y. 2009-10 The Appellate Board,
Tax Act, M.P. Tax Tribunal
Bhopal Indore
M.P Commercial F.Y. 2010-11 The Appellate
Tax Act,1994 Authority and
Additional
Commissioner of
Commercial Tax,
Indore Division
M.P Entry F.Y. 2010-11 The Appellate
TAx Act,1976 Authority and
Additional
Commissioner of
Commercial Tax,
Indore Division
Central Sales F.Y. 2010-11 The Appellate
Tax Act Authority and
Additional
Commissioner of
Commercial Tax,
Indore Division
Central sales F.Y. 2012-13 The Appellate
Tax Act, Authority and
Additional
Commissioner of
Commercial Tax,
Indore Division
M.P. Commer-
cial Tax F.Y. 2012-13 The Appellate
Act 1994 Authority and
Additional
Commissioner of
Commercial Tax,
Indore Division
Central Sales F.Y. 2012-13 The Appellate
Tax ACT Authority and
Additional Commissioner
of Commercial Tax,
Indore Division
M.P. Commer F.Y. 2012-13 The Appellate
cial Tax Act Authority and Additional
1994 Commissioner of
Commercial Tax, Indore
Division
Uttarakhand F.Y. 2010-11,
VAT Act,2005 2011-12 The Deputy Commissioner
Appeal Uttarakhand
Central Sales F.Y. 2010-11 $ The Deputy
Tax Act 2012-13 Commissioner
Appeal Uttarakhand
Central Sales F.Y.2011-12 The Deputy
Tax Act Commissioner Appeal
Uttarakhand
Uttarakhand F.Y.2013-14 The Deputy
VAT 2014-15 Commissioner Range
aCT,2005 -1 Uttarakhand
(c) According to the information and explanation given to us the
amounts which were required to be transferred to the investor education
and protection fund in accordance with the relevant provisions of the
Companies Act,1956 (1 of 1956) and rules there
under has been transferred to such fund within time.
viii. The Company neither has accumulated losses at the end of the
financial year nor has incurred cash losses during the year and in the
immediately preceding year.
ix. Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution or bank or debenture holders.
x. According to the information and explanations given to us, the
Company has given corporate guarantee on behalf
of Nanofil Technologies Private Limited for Rs.0.2 million to Governor
of Uttarakhand, which is not prima facie prejudicial to the interest of
the company.
xi. Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
xii. According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
For L.K MAHESHWARI & CO.
Chartered Accountants
FRN No. 000780C
(Abhay Singi)
Indore, Partner
Dated: 28th May 2015 Membership No 079873
Mar 31, 2014
1. We have audited the accompanying financial statements of M/s
Flexituff International Limited, which comprise the Balance Sheet as at
March 31, 2014, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information
2. Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Principle Generally Accepted in India including
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act") read with the General Circular
15/2013 dated 13 September 2013 of the Ministry of Corporate affairs in
respect of Section 133 of the Companies Act, 2013. This responsibility
includes the design, implementation and maintenance of interna control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
3. Our responsibility is to express an opinion on these financia
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financia statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements
4. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion In our opinion
and to the best of our information and according to the explanations
given to us, the financia statements give the information required by
the Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014,
b) In the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
As required by the Companies (Auditor''s Report) Order, 2003 issued by
the Central Government of India in terms of sub-section (4A) of Section
227 of the Act, we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said order. As required by
section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which 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 been
kept by the Company so far as appears from our examination of those
books
c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in sub section (3C) of section 211 of the Act,
e) On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub- section (1) of
section 274 of the Act.
ANNEXURE TO THE AUDITORS REPORT
Annexure to the Auditors report of even date to the Members of
Flexituff International Ltd.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details except the location of
fixed assets, item-wise depreciation and accumulated depreciation. The
management is in the process to comply the requirement as prescribed.
(b) The fixed assets have been physically verified by the management
during the year and there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. As informed, no material discrepancies
were noticed on such verification.
(c) In our opinion, there was no disposal of substantial part of fixed
assets during the year, therefore, does not affect the going concern
assumption.
(ii) (a) As explained to us, the management has conducted physical
verification of inventory at reasonable intervals during the year other
than those kept with third parties.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) The company has not taken Inter Corporate Deposit from
companies covered in the register maintained under section 301 of the
Act.
(b) According to the information and explanation given to us, Company
has, during the year, not granted any bans, security or unsecured, to
companies, firm and other parties covered in the register maintained
under Section 301 of the Act.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods. However as observed during the course of audit, the
internal control and procedures in relation to trading of goods,
purchase of fixed assets and receivables needs to be strengthen
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the transactions that need to be
entered into the register maintained under section 301 of the Act have
been so entered
(b) In our opinion and according to information and explanations given
to us, the register is maintained the transactions made in pursuance of
contracts or arrangements entered in the register maintained under
Section 301 of the Act, an exceeding the value of Rupees Five Lacs in
respect of any one party during the year have been made at prices which
are reasonable having regard to the prevailing market at relevant time.
(vi) The Company has not accepted any deposits from public. Therefore,
the provision of Clause of (vi) of paragraph 4 of the Order are not
applicable to the company.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1 )(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained We have however not made a
detailed examination of the cost records with a view to determine
whether they are accurate or complete.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
employee''s state insurance, income- tax, sales-tax, wealth-tax, custom
duty, excise duty, VAT, cess and other material statutory dues
applicable to it. (b) According to the records of the Company, the
dues outstanding of taxes on account of any dispute are as follows:
Name of the statute Nature of dues Demand Amount
(Rs. in million) Paid
(Rs. in
million)
IncomeTax Act Disallowances in respect
of Share 7.00 3.00
Capital Subscribed during
the year.
IncomeTax Act Disallowances in respect
of Share 10.13 3.90
Capital Subscribed during
the year, SEZ Loss u/s 10A
& 80HHC deduction.
IncomeTax Act Disallowances in respect
of Share 2.66 1.33
Capital Subscribed during
the year.
IncomeTax Act Disallowances in respect
of Share 12.73 Nil
Capital Subscribed during
the year.
IncomeTax Act Disallowances in respect
of SEZ Loss 6.03 Nil
u/s 10 A.
IncomeTax Act Departmental Appeal against
penalty 1.45 -NA-
order decided in Company''s
favor by ITAT
IncomeTax Act Departmental Appeal against
appeal 6.58 -NA-
allowed by ITAT in case of
Investment made by certain
companies in Equity
Capital of Company and
also against deduction allowed
under Section 80 IB in
Company''s favor by ITAT
IncomeTax TDS Non Deduction of TDS
on payment of 0.71 NIL
Lease Rent to MPAKVN and
Interest thereon.
M.P. Entry Tax Act, Entry tax levied on job
work done for 2.41 1.35
1976 SEZ unit
(U/s 21 Re-open)
M.P. commercial Tax Assessing Office has levied
the tax on 3.83 0.98
Act, 1994 sale by SEZ unit in
Domestic Area
(U/s 21 Re-open)
Central Sales
Tax Act, Assessing Office has
levied the tax on 0.0002 0.00
(U/s 21 Re-open) sale by SEZ unit in
Domestic Area
M.P. Entry Tax Act, Entry tax levied on job
work done for 1.68 1.61
1976 SEZ unit
M.P. Entry Tax Act, Entry tax levied on job
work done for 1.09 0.11
1976 (U/s 21 Re- SEZ unit
open)
Name of the Statute Period to Forum where dispute is
which the pending
Amount relates
Income Tax Act A.Y. 2004-05 CIT (A)
Income Tax Act A.Y. 2004-05 CIT (A)
Income Tax Act A.Y. 2005-06 CIT (A)
Income Tax Act A.Y. 2005-06 CIT (A)
Income Tax Act A.Y. 2006-07 CIT (A)
Income Tax Act A.Y. 2003-04 M.P.HIGH COURT
Income Tax Act A.Y. 2003-04 M.P.HIGH COURT
Income Tax TDS A.Y. 2005-06 to CIT(A)
A.Y. 2007-08
M.P. Entry Tax Act, 1976 F.Y. 2006-07 The Appellate Board,
M.P. Tax Tribunal Bhopal /
(U/s 21 Re-open) Indore
M.P. commercial Tax
Act, 1994 F.Y. 2006-07 The Appellate Authority
and Additiona Commissioner
(U/s 21 Re-open) of Commercial Tax, Indore
Division
Central Sales Tax Act, F.Y. 2006-07 The Appellate Authority and
Additiona Commissioner of
(U/s 21 Re-open) Commercial Tax, Indore
Division
M.P. Entry Tax Act, 1976 F.Y. 2007-08 The Appellate Board,
M.P. Tax Tribunal Bhopal /
Indore
M.P. Entry Tax Act, 1976 F.Y. 2007-08 The Appellate Authority
and Additiona Commissioner
(U/s 21 Re- open) of Commercial Tax, Indore
Division
Name of the statute Nature of dues Demand Amount
(Rs. in million) Paid
(Rs. in
million)
M.P. commercial Tax Assessing Office has
levied the tax on 1.96 1.96
Act, 1994 sale by SEZ unit in
Domestic Area
M.P. Entry Tax Act, Entry tax levied on
job work done for 2.89 0.88
1976 SEZ unit
M.P. Entry Tax Act, Assessing Office has
levied the tax on 1.73 0.43
1976 (U/s 21 Re- sale by SEZ unit in
open) Domestic Area
M.P. commercial Tax Assessing Office has
levied the tax on 1.06 1.06
Act, 1994 sale by SEZ unit in
Domestic Area
M.P. Entry Tax Act, Entry tax levied on
job work done for 3.72 1.04
1976 SEZ unit
M.P. commercial Tax Tax Imposed on (a)
sale by SEZ unit 4.30 1.20
Act, 1994 in Domestic Area Rs.18.17
mln (b) Assessing Officer
has not given the
benefit of VAT out put
Rs.1.58 million (c) ITR Amt.
Disallowed Rs.0.07 mln (d)
Tax Imposed on non
receipts of form
"H"Rs.1.60mln
Central Sales
Tax Act, Tax imposed on non
receipts of Form 0.08 0.08
-H
M.P. commercial Tax VAT ITR Reversal on
Job Work & Stock 0.61 0.61
Act, 1994 Transfer
M.P. Entry Tax Act, Entry tax levied on
job work done for 0.37 0.09
1976 SEZ unit
Central Sales
Tax Act, Tax imposed on non
receipts of Form 0.31 0.31
-H
Name of the Statute Period to Forum where dispute is
which the pending
Amount relates
M.P. commercial Tax Act, 1994 F.Y. 2007-08 The Appellate Board,
M.P. Tax Tribunal Bhopal /
Indore
M.P. Entry Tax Act, 1976 F.Y. 2008-09 The Appellate Board,
M.P. Tax Tribunal Bhopal /
Indore
M.P. Entry Tax Act, 1976 F.Y. 2008-09 The Appellate Authority
and Additiona Commissioner
(U/s 21 Re- open) of Commercial Tax, Indore
Division
M.P. commercial Tax Act, 1994 F.Y. 2008-09 The Appellate Board,
M.P. Tax Tribunal Bhopal /
Indore
M.P. Entry Tax Act, 1976 F.Y. 2009-10 The Appellate Board,
M.P. Tax Tribunal Bhopal /
Indore
M.P. commercial Tax Act, 1994 F.Y. 2009-10 The Appellate Board,
M.P. Tax Tribunal Bhopal /
Indore
Central Sales Tax Act, F.Y. 2009-10 The Appellate Board,
M.P. Tax Tribunal Bhopal
M.P. commercial Tax Act, 1994 F.Y. 2010-11 The Appellate Authority
and Additiona
Commissioner of
Commercial Tax, Indore
Division
M.P. Entry Tax Act, 1976 F.Y. 2010-11 The Appellate Authority
and Additiona
Commissioner of
Commercial Tax, Indore
Division
Central Sales Tax Act, F.Y. 2010-11 The Appellate Authority
and Additiona
Commissioner of
Commercial Tax, Indore
Division
Name of the statute Nature of dues Demand Amount
(Rs. in million) Paid
(Rs. in
million)
Uttarakhand VAT Tax imposed on non
receipts of C form 22.19 NIL
Act, 2005
Uttarakhand VAT Demand u/s 10(A)/
10(B)/10(D)/ & 10.66 3.33
Act, 2005 24(3)
Name of the Statute Period to Forum where dispute is
which the pending
Amount relates
Uttarakhand VAT Act, 2005 F.Y. 2009-10, The Joint Commissioner
2010-11 Appeal-1 Uttarakhand
Uttarakhand VAT Act, 2005 F.Y. 2009-10, The Joint Commissioner
2010-11& 2011- Appeal-1 Uttarakhand
12
(x) The Company neither has accumulated losses at the end of the
financial year nor has incurred cash losses during the year and in the
immediately preceding year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution or bank.
(xii) Based on our examination and according to the information and
explanations given to us, the company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund
/ society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the Company.
(xiv) The company is not dealing or trading in shares, securities,
debentures and other investments
(xv) According to the information and explanations given to us, the
Company has given corporate guarantee on behalf of M/s Satguru Polyfab
Private Limited for Rs.60.00 million to State Bank of Patiala, Indore,
and on behalf of Nanofil Technologies Private Limited for Rs.0.02 million
to Governor of Uttarakhand, which are not prima facie prejudicial to
the interest of the company.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained
(xvii) On the examination of books of accounts and the information and
explanations given to us, in our opinion the funds raised on short term
basis have not been used for long term investment and vice versa,
(xviii) During the year, the Company has not made any allotment of
preferential shares to parties or Companies covered in the register
maintained under section 301 of the Companies Act, 1956
(xix) The Company has not issued any Debenture therefore the provision
of clause 4(xix) of the companies (Auditor''s Report) Order, 2003 are
not applicable
(xx) The company has not raised any money by way of public issue during
the year.
(xxi) We have been informed that the one of the staff of the company
had misappropriated funds amounting to Rs.4.67 million during the year
under audit. Investigations are in progress and the staff has been
dismissed, arrested and matter is under prejudice. The company has
provided for the amount involved in books of account. Apart from above,
as per the information and explanation given to us and examination of
books of accounts carried by us in accordance in the generally accepted
audit practices in India, no other fraud on or by the company has been
noticed or reported during the course of our audit.
For L.K.Maheshwari & Co.
Chartered Accountants
FRN No. 000780C
(Abhay Singi)
Place: Indore Partner
Dated : 27th May 2014 Membership No 079873
Mar 31, 2013
We have audited the accompanying financial statements of M/s Flexituff
International Limited , which comprise the Balance Sheet as at March
31, 2013, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Principle Generally Accepted in India including
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
b) In the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
As required by the Companies (Auditor''s Report) Order, 2003 issued by
the Central Government of India in terms of sub- section (4A) of
Section 227 of the Act, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said order.
As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which 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 been
kept by the Company so far as appears from our examination of those
books
c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in sub section (3C) of section 211 of the Act;
e) On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets on the basis of available information.
(b) The fixed assets have been physically verified by the management
during the year and there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. As informed, no material discrepancies
were noticed on such verification.
(c) In our opinion, there was no disposal of substantial part of fixed
assets during the year, therefore, does not affect the going concern
assumption.
(ii) (a) As explained to us, the management has conducted physical
verification of inventory at reasonable intervals during the year other
than those kept with third parties.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) The company has not taken Inter Corporate Deposit from
companies covered in the register maintained under section 301 of the
Act.
(b) According to the information and explanation given to us, Company
has, during the year, not granted any loans, security or unsecured, to
companies, firm and other parties covered in the register maintained
under Section 301 of the Act.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods.
During the course of our audit, no major weakness has been noticed in
the internal controls in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the transactions that need to be
entered into the register maintained under section 301 of the Act have
been so entered.
(b) In our opinion and according to information and explanations given
to us, the register is maintained the transactions made in pursuance of
contracts or arrangements entered in the register maintained under
Section 301 of the Act, an exceeding the value of Rupees Five Lacs in
respect of any one party during the year have been made at prices which
are reasonable having regard to the prevailing market at relevant time.
(vi) The Company has not accepted any deposits from public. Therefore,
the provision of Clause of (vi) of paragraph 4 of the Order are not
applicable to the company.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act , 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have however not made
a detailed examination of the cost records with a view to determine
whether they are accurate or complete.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
employees'' state insurance, income- tax, sales-tax, wealth-tax, custom
duty, excise duty, VAT, cess and other material statutory dues
applicable to it.
(b) According to the records of the Company, the dues outstanding of
taxes on account of any dispute are as follows:
Name of the Nature of dues Demand
statute (Rs. in Million)
Income Tax Act Disallowances in respect of Share 7.00
Capital Subscribed during the year.
Income Tax Act Disallowances in respect of Share 10.13
Capital Subscribed during the year,
SEZ Loss u/s 10A & 80HHC deduction.
Income Tax Act Disallowances in respect of Share 2.66
Capital Subscribed during the year.
Income Tax Act Disallowances in respect of Share 12.73
Capital Subscribed during the year.
Income Tax Act Disallowances in respect of SEZ 6.03
Loss u/s 10 A.
Income Tax Act Departmental Appeal against 1.45
penalty order decided in
Company''s favor by ITAT
Income Tax Act Departmental Appeal against 6.58
appeal allowed by ITAT in case of
Investment made by certain companies
in Equity Capital of Company and
also against deduction allowed under
Section 80 IB in Company''s
favor by ITAT
Income Tax Non Deduction of TDS on 0.71
TDS payment of Lease Rent to
MPAKVN and Interest thereon.
M.P. Entry Tax Entry Tax levied on Job Work for 1.68
Act, 1976 SEZ unit
M.P. Entry Tax Entry Tax levied on Job Work for 2.89
Act, 1976 SEZ unit
Name Amount Period to which Forum where
Paid the Amount dispute is
(Rs. in
Million) relates pending
Income Tax Act 3.00 A.Y. 2004-05 CIT (A)
Income Tax Act 3.90 A.Y. 2004-05 CIT (A)
Income Tax Act 1.33 A.Y.2005-06 CIT (A)
Income Tax Act NIL A.Y.2005-06 CIT (A)
Income Tax Act NIL A.Y.2006-07 CIT (A)
Income Tax Act -NA- A.Y.2003-04 M.P.HIGH
COURT
Income Tax Act -NA- A.Y.2003-04 M.P.HIGH
COURT
Income Tax Act NIL A.Y.2005-06 to CIT(A)
A.Y. 2007-08
Income Tax Act 1.61 F.Y. 2007-08 M.P.Commercial
Tax Tribunal,
Bhopal
Income Tax Act 0.88 F.Y. 2008-09 M.P.Commercial
Tax Tribunal,
Bhopal
Name of the Nature of dues Demand
statute (Rs. in Million)
M.P.VAT Act, Assessing Officer has levied 1.96
2002 the tax on sale by SEZ unit in
Domestic Area
M.P.VAT Act, Assessing Officer has levied 1.06
2002 the tax on sale by SEZ unit in
Domestic Area
M.P.VAT Act, Tax Imposed on 4.30
2002 (a) sale by SEZ unit in Domestic
Area Rs.181.70 Lacs
(b) Assessing Officer has not
given the benefit of VAT out
put Rs.15.82 Lacs
(c) ITR Amt.Disallowed Rs.0.75 Lacs
(d) Tax Imposed on non receipts
of form "H" Rs.16.06 Lacs
M.P. Entry Tax Entry tax levied on job work 3.51
Act, 1976 done for SEZ unit
M.P. Entry Tax Entry tax levied on Job work 10.86
Act, 1976 done for SEZ unit
Uttarakhand Demand u/s 10(A)/ 10(B)/10(D)/ 10.66
VAT Act,2005 & 24(3)
Name Amount Period to which Forum where
Paid the Amount dispute is
(Rs. in
Million) relates pending
M.P.VAT Act, 1.96 F.Y. 2007-08 M.P.Commercial
Tax Tribunal, Bhopal
M.P.VAT Act, 1.06 F.Y. 2008-09 M.P.Commercial
Tax Tribunal, Bhopal
M.P.VAT Act, 0.43 F.Y. 2009-10 Additional
Commissioner (Appeals)
of Commercial Taxes,
Zone Indore
M.P.VAT Act, 0.37 F.Y. 2009-10 Additional Commissioner
(Appeals) of Commercial
Taxes, Zone Indore
M.P.VAT Act, 1.09 F.Y. 2006-07 Additional Commissioner
(Appeals) of Commercial
Taxes, Zone Indore
M.P.VAT Act, 3.33 F.Y. 2009- The Joint 10,2010-11&
Commissioner
2011-12 Appeal -1
Uttarakhand
(x) The Company neither has accumulated losses at the end of the
financial year nor has incurred cash losses during the year and in the
immediately preceding year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution or bank.
(xii) Based on our examination and according to the information and
explanations given to us, the company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund
/ society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the Company.
(xiv) The company is not dealing or trading in shares, securities,
debentures and other investments.
(xv) According to the information and explanations given to us, the
Company has given corporate guarantee on behalf of Entertainment World
Developers Limited, Mumbai for Rs.4.55 million to State Bank of India,
Commercial Branch, Indore., and on behalf of M/s Satguru Polyfab
Private Limited, Gandhidham for Rs.60.00 million to State Bank of
Patiala, Indore, and on behalf of Nanofil Technologies Pvt.Ltd.,
Kashipur for Rs.0.20 million to Governor of Uttarakhand, which are not
prima facie prejudicial to the interest of the company.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) On the examination of books of accounts and the information and
explanations given to us, in our opinion the funds raised on short term
basis have not been used for long term investment and vice versa;
(xviii) During the year, the Company has not made any allotment of
preferential shares to parties or Companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) The Company has not issued any Debenture therefore the provision
of clause 4(xix) of the companies (Auditor''s Report) Order, 2003 are
not applicable.
(xx) The company has not raised any money by way of public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For L.K.Maheshwari & Co.
Chartered Accountants
FRN No. 000780C
(Abhay Singi)
Place : Indore Partner
Dated : 27th May 2013 Membership No 079873
Mar 31, 2012
We have audited the attached Balance Sheet of M/s Flexituff
International Limited as at March 31, 2012 and also the Profit and Loss
account for the year ended on March 31, 2012 annexed thereto. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditor's Report) Order, 2003 issued by
the Central Government of India in terms of sub- section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
Further to our comments in the Annexure referred to above, we report
that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The Balance Sheet and Profit and Loss account statement dealt
with by this report are in agreement with the books of account;
iv. In our opinion, the Balance Sheet, and Profit and Loss account
dealt with by this report comply with the accounting standards referred
to in sub-section (3C) of section 211 of the Companies Act, 1956.
v. On the basis of the written representations received from the
directors, as on March 31, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2012 from being appointed as a director in terms of clause
(g) of sub- section (1) of section 274 of the Companies Act, 1956.
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2012.
b) in the case of the profit and loss account, of the profit for the
year ended March 31, 2012.
ANNEXURE TO THE AUDITORS' REPORT of even date to the Members of
Flexituff International Ltd.
i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) The fixed assets have been physically verified by the management
during the year and there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. As informed, no material discrepancies
were noticed on such verification.
c) There was no disposal of fixed assets during the year and therefore
does not affect the going concern assumption.
ii) a) The management has conducted physical verification of inventory
at reasonable intervals during the year other than those kept with
third parties.
b) The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
iii) a) The company has not taken Inter Corporate Deposit from
companies covered in the register maintained under section 301 of the
Companies Act, 1956
b) According to the information and explanation given to us, Company
has, during the year, not granted any loans, security or unsecured, to
companies, firm and other parties covered in the register maintained
under Section 301 of the Companies Act 1956.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods. During the course of our audit, no major weakness has
been noticed in the internal controls in respect of these areas.
v) a) According to the information and explanations provided by the
management, we are of the opinion that the transactions that need to be
entered into the register maintained under section 301 have been so
entered.
b) In our opinion and according to information and explanations given
to us, the register is maintained the transactions made in pursuance of
contracts or arrangements entered in the register maintained under
Section 301 of the Companies Act, 1956, an exceeding the value of
Rupees Five Lacs in respect of any one party during the year have been
made at prices which are reasonable having regard to the prevailing
market at relevant time.
vi) The Company has not accepted any deposits from public. Therefore,
the provision of Clause of (vi) of paragraph 4 of the Order are not
applicable to the company.
vii) In our opinion, the Company has an Internal Audit System
commensurate with the size and nature of its business.
viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act , 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
ix) a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including Provident Fund, ESI,
Income-Tax, Sales-Tax, Wealth-Tax, Custom Duty, Service Tax, Excise
Duty, VAT, Cess and other statutory dues applicable to it.
b) According to the records of the Company, the dues outstanding of
taxes on account of any dispute are as follows:
Name of the statute Nature of dues Demand Amount paid
(Rs. In million) (Rs. In
million)
Income Tax Act Disallowances in
respect of 7.00 3.00
Share Capital
Subscribed during
the year.
Income Tax Act Disallowances in
respect of 10.13 3.00
Share Capital
Subscribed during
the year, SEZ Loss
u/s 10A & 80HHC
deduction.
Income Tax Act Disallowances in
respect of 2.66 1.33
Share Capital
Subscribed during
the year.
Income Tax Act Disallowances in
respect of 12.73 NIL
Share Capital
Subscribed during
the year.
Income Tax Act Disallowances in
respect of SEZ
Loss u/s 10 A. 6.03 NIL
Income Tax Act Departmental Appeal
against penalty
order 1.45 -NA-
decided in Company's
favor by ITAT
Name of the Statue Period to which Forum where
the Amount dispute is
relates pending.
Income Tax Act A.Y. 2004-05 CIT (A)
Income Tax Act A.Y. 2004-05 CIT (A)
Income Tax Act A.Y.2005-06 CIT (A)
Income Tax Act A.Y.2005-06 CIT (A)
Income Tax Act A.Y.2006-07 CIT (A)
Income Tax Act A.Y.2003-04 M.P.
HIGH COURT
Name of the statute Nature of dues Demand Amount paid
(Rs. In million) (Rs. In
million)
Income Tax Act Departmental Appeal
against appeal allowed 6.58 -NA-
by ITAT in case of
Investment made by certain
companies in Equity
Capital of Company and
also against deduction
allowed under Section
80 IB in Company's favor
by ITAT
Income Tax TDS Non Deduction of TDS on
payment of 0.71 NIL
Lease Rent to MPAKVN and
Interest thereon.
M.P. Commercial Difference in Sales tax
exemption .02 .004
Tax Act, 1994 Caping calculation
Central Sales Difference in Sales tax
exemption 1.96 1.54
Tax Act, 1956 Caping calculation
M.P. Entry Tax
Act, 1976 Entry Tax levied on Job
Work for SEZ unit 1.68 1.61
M.P. Entry Tax
Act, 1976 Entry Tax levied on Job
Work for SEZ unit 2.89 0.88
Utarakhand Assessment FY 2010-11 u/s
10(A)/ 10(B) and 10(D) 1.56 NIL
Commercial Tax
Name of the Statue Period to which Forum where
the Amount dispute is
relates pending.
Income Tax Act A.Y.2003-04 M.P.
HIGH COURT
Income Tax TDS A.Y.2005-06 to CIT(A)
A.Y. 2007-08
M.P. Commercial
Tax Act, 1994 F.Y. 2005-06 The Appellate
Board, M.P.Tax
Tribunal Bhopal
Central Sales
Tax Act, 1956 F.Y. 2005-06 The Appellate
Board, M.P. Tax
Tribunal Bhopal
M.P. Entry Tax Act, 1976 F.Y. 2007-08 The Appellat
Board, M.P. Tax
Tribunal Bhopal
M.P. Entry Tax Act, 1976 F.Y. 2008-09 The Appellate
Board, M.P. Tax
Tribunal Bhopal
Utarakhand
Commercial Tax F.Y. 2010-11 The Joint
Commissioner
(Appeal)-I
x) The Company neither has accumulated losses at the end of the
financial year nor has incurred cash losses during the year and in the
immediately preceding year.
xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution or bank.
xii) Based on our examination and according to the information and
explanations given to us, the company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
xiii) The Company is not a chit fund or a nidhi / mutual benefit fund /
society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor's Report) Order, 2003 are not applicable to the Company.
xiv) The company is not dealing or trading in shares, securities,
debentures and other investments.
xv) According to the information and explanations given to us, the
Company has given corporate guarantee on behalf of EWDPL for Rs.4.55
million to State Bank of India, and on behalf of M/s Satguru Polyfab
Private Limited, for Rs.60.00 million to State Bank of Patiala, and on
behalf of Nanofil Technologies Pvt.Ltd. for Rs. 0.2 million to Governor
of Uttarakhand, which are not prima facie prejudicial to the interest
of the company.
xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
xvii) On the examination of books of accounts and the
information and explanations given to us, in our opinion the funds
raised on short term basis have not been used for long term investment
and vice versa;
xviii)During the year, the Company has not made any allotment of
preferential shares to parties or Companies covered in the register
maintained under section 301 of the Companies Act, 1956.
xix) The Company has not issued any Debenture therefore the provision
of clause 4(xix) of the companies (Auditor's Report) Order, 2003 are
not applicable.
xx) During the year the Company has issued 4500000 Equity share of Rs.
10/- each at a premium of Rs. 145/- each through IPO and an Offer for
sale of 2250000 equity share by Clearwater Capital Partners (Cyprus)
Ltd. & 19700 Equity Shares of Rs. 10/- each at a premium of Rs. 85/-
per Share under ESOP Scheme. The end use of money raised by IPO has
been disclosed in Financial Statements and the same has been verified.
xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For L.K. Maheshwari & Co.
Chartered Accountants
FRN No. 000780C
Abhay Singi
Place : Indore Partner
Dated : 30th May 2012 Membership No 079873
Mar 31, 2011
We have audited the attached Balance Sheet of M/s Flexituff
International Limited as at March 31,2011 and also the Profit and Loss
account for the year ended on March 31,2011 annexed thereto. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditor's Report) Order, 2003 issued by
the Central Government of India in terms of sub- . section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
Further to our comments in the Annexure referred to above, we report
that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of
our audit;
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The Balance Sheet and Profit and Loss account statement dealt
with by this report are in agreement with the books of account;
iv. In our opinion, the Balance Sheet, and Profit and Loss account
dealt with by this report comply with the accounting standards referred
to in sub-section (3C) of section 211 of the Companies Act, 1956.
v. On the basis of the written representations received from the
directors, as on March 31, 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31,2011 from being appointed as a director in terms of clause (g)
of sub-section (1) of section 274 of the Companies Act, 1956.
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
a) in case of the balance sheet, of the state of affairs of the Company
as at March 31,2011.
b) in case of the profit and loss account, of the profit for the year
ended March 31,2011.
Annexure to the Auditors report of even date to the Members of
Flexituff International Ltd.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets have been physically verified by the management
during the year and there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. As informed, no material discrepancies
were noticed on such verification.
(c) There was no disposal of fixed assets during the year and therefore
does not affect the going concern assumption.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year other than those kept
with third parties.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) The company has not taken Inter Corporate Deposit from
companies covered in the register maintained under section 301 of the
Companies Act, 1956
(b) According to the information and explanation given to us, Company
has, during the year, not granted any loans, security or unsecured, to
companies, firm and other parties covered in the register maintained
under Section 301 of the Companies Act 1956.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods. During the course of our audit, no major weakness has
been noticed in the internal controls in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the transactions that need to be
entered into the register maintained under section 301 have been so
entered.
(b) In our opinion and according to information and explanations given
to us, the register is maintained the transactions made in pursuance of
contracts or arrangements entered in the register maintained under
Section 301 of the Companies Act, 1956, an exceeding the value of
Rupees Five Lacs in respect of any one party during the year have been
made at prices which are reasonable having regard to the prevailing
market at relevant time.
(vi) The Company has not accepted any deposits from public
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) To the best of our knowledge and as explained, the Central
Government has not prescribed maintenance of cost records under clause
(d) of sub-section (1) of section 209 of the Companies Act, 1956 for
the products of the Company.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
employees' state insurance, income-tax, sales-tax, wealth-tax, custom
duty, excise duty, VAT, cess and other material statutory dues
applicable to it.
(b) According to the records of the Company, the dues outstanding of
taxes on account of any dispute are as follows:
Name of the
statute Nature of dues Demand
(Rs. in
million)
Income Tax Act Disallowances in respect of 7.00
Share Capital Subscribed
during the year.
Income Tax Act Disallowances in respect of 2.66
Share Capital Subscribed
during the year.
Income Tax Act Departmental Appeal against -NA-
penalty order decided in
Company's favor by 1TAT
Income Tax Act Departmental Appeal against -NA-
deduction allowed under
Section 80 IB in Company's
favor by ITAT
Income Tax Act Departmental Appeal against -NA-
appeal allowed by ITAT in
case of Investment made by
certain companies in Equity
Capital of Company
Income Tax TDS Non Deduction of TDS on 0.71
payment of Lease Rent to
MPAKVN and Interest thereon
Income Tax TDS Short Deduction of TDS and 1.58
Interest thereon
M.P Commercial Tax Difference in sales tax 0.02
Act 1994 exemption caping calculation
Central Sales Tax Difference in sales tax 1.96
Act 1956 exemption caping calculation
M.P. Entry Tax
Act, 1976 Tax imposed on Job Work for 1.68
SEZ unit
Name of the statute Amount Paid Period to Forum where
(Rs. in which the dispute is
million) Amount pending.
relates
Income Tax Act 3.00 A.Y. 2004-05 CIT (A)
Income Tax Act 1.33 A.Y.2005-06 CIT (A)
Income Tax Act -NA- A.Y.2003-04 M.P. HIGH
COURT
Income Tax Act -NA- A.Y.2003-04 M.P.HIGH
COURT
Income Tax Act -NA- A.Y.2003-04 M.P.HIGH
COURT
Income Tax TDS Nil A.Y.2005-06 to CIT (A)
A.Y.2007-08
Income Tax TDS Nil A.Y.2009-10 CIT (A)
M.P.Commercial Tax 0.00 F.Y. 2005-06 The Appellate
Act,1956 Board, M.P.
Tax Tribunal
Bhopal
Central Sales Tax 0.55 F.Y. 2005-06 The Appellate
Act,1956 Board, M.P
Tax Tribunal
Bhopal
M.P. Entry Tax Act,1976 0.47 F.Y. 2007-08 The Appellate
Board, M.P.
Tax Tribunal
Bhopal
(x) The Company neither has accumulated losses at the end of the
financial year nor has incurred cash losses during the year and in the
immediately preceding year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion thatthe
Company has not defaulted in repayment of dues to a financial
institution or bank.
(xii) Based on our examination and according to the information and
explanations given to us, the company has not granted any loans and
advances on the basis of security byway of pledge of shares, debentures
and other securities.
(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund/
society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor's Report) Order, 2003 are not applicable to the Company.
(xiv) The company is not dealing or trading in shares, securities,
debentures and other investments.
(xv) According to the information and explanations given to us, the
Company has given corporate guarantee on behalf of Entertainment World
Developers Limited, Mumbai for Rs.4.55 million to State bank of India,
Commercial Branch, , Indore., and on behalf of M/s Satguru Polyfab
Private Limited, Gandhidham for Rs.60.00 million to State Bank of
Patiala,' Orbit Mall Branch, A.B.Road, Indore, and on behaif of Nanofil
Technologies Pvt.Ltd., Kashipur for Rs.0.20 million to Governor of
Uttarakhand, which are not prima facie prejudicial to the interest of
the company.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) On the examination of books of accounts and the information and
explanations given to us, in our opinion the funds raised on short term
basis have not been used for long term investment and vice versa;
(xviii) During the year, the Company has not made any allotment of
preferential shares to parties or Companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) 92 Nos. of Zero Percent Fully Convertible Debentures of Rs. 5.00
million each issued to M/s Clearwater Capital Partners (Cyprus)
Limited, Cyprus are converted into 44,86,492 equity shares during the
year;
(xx) The company has not raised any money by public issues during the
year;
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For L.K.Maheshwari & Co.
Chartered Accountants
FRN No. 000780C
Place : Indore
Partner
Dated : 18.6.2011 Membership No 079873