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Auditor Report of R&B Denims Ltd.

Mar 31, 2023

R & B Denims Limited Report on the audit of the Standalone Financial Results

Opinion

We have audited the accompanying statement of quarterly and year to date standalone financial results of R & B Denims Limited (the "Company") for the quarter ended March 31, 2023 and for the year ended March 31, 2023 ("Statement"), attached herewith, being submitted by the Company pursuant to the requirement of Regulation 33 and 52 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the "Listing Regulations").

In our opinion and to the best of our information and according to the explanations given to us, the statement:

a. is presented in accordance with the requirements of Regulation 33 of the Listing Regulations; and

b. gives a true and fair view in conformity with the applicable accounting standards and other accounting principles generally accepted in India, of the net profit and other comprehensive income and other financial information of the Company for the quarter ended March 31, 2023 and for the year ended March 31,2023.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013, as amended ("the Act"). Our responsibilities under those Standards are further described in the "Auditor''s Responsibilities for the Audit of the Standalone financial Results" section of our report. We are independent of the Company in accordance with the Code of Ethics Issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have no key audit matters to communicate in our report.

Management''s Responsibility for the Standalone Financial Statements

The Statement has been prepared on the basis of the standalone annual financial statements. The Board of Directors of the Company are responsible for the preparation and presentation of the Statement that gives a true and fair view of the net profit and other comprehensive income of the Company and other financial Information in accordance with the applicable accounting standards prescribed under Section 133 of the Act read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the listing Regulations. 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 accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 Statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Results

Our objectives are to obtain reasonable assurance about whether the Statement as a whole is free from material misstatement, whether due to fraud or error, and to Issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material If, individually or in the aggregate, they could reasonably be expected to Influence the economic decisions of users taken on the basis of the Statement.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Statement, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.

• Conclude on the appropriateness of the Board of Directors'' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s

ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial results or, If such disclosures are inadequate, to modify our opinion.

• Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Statement, including the disclosures, and whether the Statement represents the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in Internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguard.

Other Matters

The Statement includes the results for the quarter ended March 31, 2023 being the balancing figure between the audited figures in respect of the full financial year ended March 31, 2023 and the published unaudited year-to-date figures up to the third quarter of the current financial year, which were subjected to a limited review by us, as required under the listing Regulations.

For, Pradeep K. Singhi & Associates Chartered Accountants ICAI FRN: 126027W

Place: Surat Sd/-

Date: 10th May, 2023

(Pradeep Kumar Singhi) Partner M. No. 024612 UDIN:23024612BGQQIG7789


Mar 31, 2018

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

I have audited the accompanying standalone financial statements of R & B Denims Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the Year ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “standalone Ind AS financial statements”).

Management’s Responsibility for the Standalone IND AS 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 of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with relevant rules issued thereunder.

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.

Auditors’ Responsibility

My responsibility is to express an opinion on these standalone Ind AS financial statements based on my audit.

I 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.

I conducted my 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 I 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 auditor’s 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 Company’s 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 Company’s Board of Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion on the standalone Ind AS financial statements.

Opinion

In my opinion and to the best of my information and according to the explanations given to me, 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, of the state of affairs of the Company as at March 31, 2018, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Our opinion is not modified in respect of above said matters.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in paragraph 3 and 4 of the order, to the extent applicable.

As required by Section 143 (3) of the Act, I report that:

a. I have sought and obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purposes of my audit;

b. In my opinion, proper books of account as required by law have been kept by the Company so far as it appears from my examination of those books;

c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account;

d. In my opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act read with relevant rules issued thereunder;

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 my separate Report in “Annexure B” and

g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in my opinion and to the best of my information and according to the explanations given to me:

1. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements. Refer note 26- Contingent liabilities to the standalone Ind AS financial statements.

2. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

I have audited the internal financial controls over financial reporting of R & B Denims Limited (“the Company”) as of 31 March, 2018 in conjunction with my audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls:

The Company’s management is responsible for establishing and maintaining 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 (the “Guidance Note”) 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 Company’s 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 Companies Act, 2013.

Auditors’ Responsibility:

My responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on my audit. I conducted my audit in accordance with the Guidance Note and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that I 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.

My audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. My 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 auditor’s judgement, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting:

A company’s 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 company’s 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 authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting:

Because of the inherent limitations of internal financial controls over 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 my opinion, to the best of my information and according to the explanations given to me, 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 31st March, 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.

FOR, PRADEEP SINGHI & ASSOCIATES

Chartered Accountants

FRN: 108029W

Place: Surat

Date: 28/05/2018 Sd/-

PRADEEP KUMAR SINGHI

Proprietor

M. NO. 024612


Mar 31, 2017

INDEPENDENT AUDITORS’ REPORT

Independent Auditor''s Report On Standalone Half yearly Financial Results and Standalone Year to Date Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

TO THE MEMBERS OF THE R & B DENIMS LIMITED REPORT ON THE STANDALONE FINANCIAL STATEMENTS

1. I have audited the accompanying standalone financial statements of The R & B Denims Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

2. 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 of these standalone financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

3. My responsibility is to express an opinion on these standalone financial statements based on my audit.

4. I have taken into account the provisions of the Act and the Rules made there under including the accounting standards and matters which are required to be included in the audit report.

5. I conducted my audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors'' 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 financial control relevant to the Company''s preparation of the 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 Company''s Directors, as well as evaluating the overall presentation of the financial statements.

7. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion on the standalone financial statements.

8. Opinion

a. The balances for Sundry Debtors, Sundry creditors, loans & advances, bank balances, statutory and other liabilities as on 31st March'' 2017 are subject to confirmation. The figures reported in the financial statement are as per the ledger account.

b. I have relied on the information & documents submitted to me by management for physical verification of stores & spares, Fixed assets.

Subject to above paragraph (a) and (b) and paragraph mentioned under Report on Other Legal and Regulatory Requirements under paragraph 10(d) relating to non-compliance of Accounting Standard, in my opinion and to the best of my information and according to the explanations given to me, 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,

a. in the case of the Balance Sheet, of the state of affairs of the Company for the year ended on 31st March, 2017;

b. in the case of the Profit and Loss Account, of the profit/ loss for the year ended on 31st March, 2017; and

c. in the case of the Cash Flow Statement, of the cash flows for the period from 1st April, 2016 to 31st March, 2017 on that date

Report on Other Legal and Regulatory Requirements

9. As required by ''the Companies (Auditor''s Report) Order, 2016'', issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the “Order”), and on the basis of such checks of the books and records of the Company as I considered appropriate and according to the information and explanations given to me, I give in the “Annexure-A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. As required by Section 143 (3) of the Act, I report that:

a. I have sought and obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purposes of my audit.

b. In my opinion, proper books of account as required by law have been kept by the Company so far as it appears from my 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 my 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. On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 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 my separate Report in “Annexure B”.

g. With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in my opinion and to the best of my knowledge and belief and according to the information and explanations given to me:

1. As per the information provided to me, the Company did not have any provision as at March 31, 2017, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts.

2. There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund by the Company.

ANNEXURE A TO THE AUDITOR’S REPORT

As required by the Companies (Auditor''s Report) Order, 2016 and according to the information and explanations given to us during the course of audit and on the basis of such checks as were considered appropriate, I report that:

Sr. No.

Particulars

Auditors Remark

(i)

(a).Whether the company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

Yes company is maintaining proper records.

(b).Whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account;

Yes

(c). Whether title deeds of immovable properties are held in the name of the company. If not, provide details thereof

Yes

(ii)

(a).Whether physical verification of inventory has been conducted at reasonable intervals by the management and whether any material discrepancies were noticed and if so, how they have been dealt with in the books of account.

Yes physical verification of inventory has been conducted at reasonable intervals by the management. No material discrepancies were noticed.

(iii)

Whether the company has granted any loans, secured or unsecured to companies, firms or other parties covered by clause (76) of Section 2 of the Companies Act, 2013. If so

No such loans granted by the Company during the year under audit.

(a).Whether the terms and conditions of the grant of such loans are not prejudicial to the company''s interest

Not Applicable

(b). Whether receipt of the principal amount and interest are regular. If not provide details thereof; and

Not Applicable

(c). If overdue amount is more than rupees five lakhs, whether reasonable steps have been taken by the company for recovery of the principal and interest

Not Applicable

(iv)

In respect of loans, investments and guarantees, whether provisions of Section 185 and 186 of the Companies Act, 2013 have been complied with. If not, provide details thereof

Not Applicable

(v)

In case the company has accepted deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under, where applicable, have been complied with? If not, the nature of such contraventions be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not?

No. Company has not accepted any deposits. Directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under have been complied.

(vi)

Where maintenance of cost records has been specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013 and whether such accounts and records have been made and maintained;

Yes maintained

(vii)

1. Whether the company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-Lax, , service tax, duty of customs, duty of excise, value added tax, and any other statutory dues with the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated by the auditor

Yes

2. Where dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not be treated as a dispute).

1) Appeal is pending before Commissioner of Appeals for F.Y. 2012-13 for tax demand of Rs. 7,335,180/- and for F.Y. 2013-14 for tax demand of Rs. 18,825,700/2) Appeal with CESTAT is pending for levy of Custom Duty for Rs. 193,179/- for import of Coal.

3) The case of the Company stands pending before Appellate Tribunal for the Sales Tax Penalty levied for F.Y. 2012-13. The amount of Penalty is Rs. 57,074/- which is contingent in nature.

(viii)

Whether the company has defaulted in repayment of dues to a financial institution or bank or debenture holders? If yes, the period and amount of default to be reported (in case of banks and financial institutions, lender wise details to be provided).

No.

Not Applicable

(ix)

Whether moneys raised by way of public issue/ follow-on offer (including debt instruments) and term loans were applied for the purposes for which those are raised. If not, the details together with delays / default and subsequent rectification, if any, as may be applicable, be reported;

No Money has been raised by way of Public issue / follow-on offer during the period. However, disbursement of Term Loan has been made by the Bank directly to the vendors. And there is no delay or default.

(x)

Whether any fraud by the company or any fraud on the Company by its officers/ employees has been noticed or reported during the year; if yes, the nature and the amount involved be indicated

No.

Not Applicable

(xi)

Whether managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act? If not, state the amount involved and steps taken by the company for securing refund of the same

Yes. Managerial Remuneration has been paid / provided in accordance with provisions of section 197 and under other rules.

(xii)

Whether the Nidhi Company has complied with the Net Owned Fund in the ratio of 1: 20 to meet out the liability and whether the Nidhi Company is maintaining 10% liquid assets to meet out the unencumbered liability

Not Applicable

(xiii)

Whether all transactions with the related parties are in compliance with Section 188 and 177 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc. as required by the accounting standards and Companies Act, 2013.

Yes

(xiv)

Whether the company has made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review and if so, as to whether the requirement of Section 42 of the Companies Act, 2013 have been complied and the amount raised have been used for the purposes for which the funds were raised. If not, provide details thereof

The Company has not made any preferential allotment / private placement of shares or fully / partly convertible debentures during the year. Hence compliance for utilization of funds are not applicable.

(xv)

Whether the company has entered into any non-

No.

cash transactions with directors or persons connected with him and if so, whether provisions of Section 192 of Companies Act, 2013 have been complied with.

Not Applicable

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act”)

I have audited the internal financial controls over financial reporting of R & B Denims Limited (“the Company”) as of 31 March 2017 in conjunction with my audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls:

The Company''s management is responsible for establishing and maintaining 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''). 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 company''s 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 Companies Act, 2013.

Auditors’ Responsibility:

My responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on my audit. I conducted my audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, 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 I 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.

My audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. My 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 auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting:

A company''s 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 company''s 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 company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting:

Because of the inherent limitations of internal financial controls over 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:

Subject to our qualification & other comments of my main report, in my 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 31 March 2017, 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.

FOR, PRADEEP SINGHI & ASSOCIATES

Chartered Accountants FRN: 108029W

Place: Surat

Date: 27/05/2017 Sd/-

PRADEEP KUMAR SINGHI

Proprietor M. NO. 024612


Mar 31, 2016

INDEPENDENT AUDITORS’ REPORT

Independent Auditor''s Report On Standalone Half yearly Financial Results and Standalone Year to Date Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

To The Members Of R & B DENIMS LIMITED

I have audited the standalone half yearly financial results of R & B Denims Limited (“the company”) for the half year ended 31st March, 2016 and the standalone financial results for the year ended 31st March, 2016, attached herewith, being submitted by the company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Attention is drawn to the fact that the figures for the Standalone half year ended March 31, 2016 and the corresponding Standalone half year ended in the previous year as reported in these Standalone financial results are the balancing figures between audited figures in respect of the full Standalone financial year and the published year to date figures up to the end of the Standalone half year of the relevant Standalone financial year. These Standalone half yearly financial results as well as the Standalone year to date financial results have been prepared on the basis of the interim Standalone financial statements, which are the responsibility of the company''s management.

My responsibility is to express an opinion on these Standalone financial results based on my audit of such interim financial statements, which have been prepared in accordance with the recognition and measurement principles laid down in Accounting Standard for Interim Financial Reporting (AS 25 / Ind AS 34), prescribed, under Section 133 of the Companies Act, 2013 read with relevant rules issued there under; or by the Institute of Chartered Accountants of India, as applicable and other accounting principles generally accepted in India.

I conducted my audit in accordance with the auditing standards generally accepted in India. Those standards require that I have plan and perform the audit to obtain reasonable assurance about whether the Standalone financial results are free of material misstatement(s). An audit includes examining, on a test basis, evidence supporting the amounts disclosed as Standalone financial results. An audit also includes assessing the accounting principles used and significant estimates made by management. I believe that my audit provides a reasonable basis for my opinion.

In my opinion and to the best of my information and according to the explanations given to me these Standalone half yearly financial results as well as the Standalone year to date results:

i. are presented in accordance with the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in this regard; and

ii. give a true and fair view of the net profit/ loss and other financial information for the Standalone half year ended 31st March, 2016 as well as the standalone financial results for the year ended 31stMarch, 2016.

ANNEXURE A TO THE AUDITOR’S REPORT

As required by the Companies (Auditor''s Report) Order, 2016 and according to the information and explanations given to us during the course of audit and on the basis of such checks as were considered appropriate, I report that:

Sr. No.

Particulars

Auditors Remark

(i)

(a).Whether the company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

Yes company is maintaining proper records.

(b).Whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account;

Yes

(c). Whether title deeds of immovable properties are held in the name of the company. If not, provide details thereof

Yes

(ii)

(a).Whether physical verification of inventory has been conducted at reasonable intervals by the management and whether any material discrepancies were noticed and if so, how they have been dealt with in the books of account.

Yes physical verification of inventory has been conducted at reasonable intervals by the management. No material discrepancies were noticed.

(iii)

Whether the company has granted any loans, secured or unsecured to companies, firms or other parties covered by clause (76) of Section 2 of the Companies Act, 2013. If so

No such loans granted by the Company during the year under audit.

(a). Whether the terms and conditions of the grant of such loans are not prejudicial to the company''s interest

Not Applicable

(b). Whether receipt of the principal amount and interest are regular. If not provide details thereof; and

Not Applicable

(c). If overdue amount is more than rupees five lakhs, whether reasonable steps have been taken by the company for recovery of the principal and interest

Not Applicable

(iv)

In respect of loans, investments and guarantees, whether provisions of Section 185 and 186 of the Companies Act, 2013 have been complied with. If not, provide details thereof

Not Applicable

(v)

In case the company has accepted deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other

No. Company has not accepted any deposits. Directives issued by the Reserve Bank of India and

relevant provisions of the Companies Act, 2013 and the rules framed there under, where applicable, have been complied with? If not, the nature of such contraventions be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not?

the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under have been complied.

(vi)

Where maintenance of cost records has been specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013 and whether such accounts and records have been made and maintained;

Yes maintained

(vii)

1. Whether the company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-Lax, , service tax, duty of customs, duty of excise, value added tax, and any other statutory dues with the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated by the auditor

Yes

2. Where dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not be treated as a dispute).

1) Appeal is pending with Income Tax Appellate Tribunal for tax demand of Rs. 7,335,180/- for Assessment Year 2013-14.

2) Appeal with CESTAT is pending for levy of Custom Duty for Rs. 193,179/- for import of Coal

(viii)

Whether the company has defaulted in repayment of dues to a financial institution or bank or debenture holders? If yes, the period and amount of default to be reported (in case of banks and financial institutions, lender wise details to be provided).

No.

Not Applicable

(ix)

Whether moneys raised by way of public issue/ follow-on offer (including debt instruments) and term loans were applied for the purposes for which those are raised. If not, the details together with delays / default and subsequent rectification, if any, as may be applicable, be reported;

No Money has been raised by way of Public issue / follow-on offer during the period. However, disbursement of Term Loan has been made by the Bank directly to the vendors. And there is no delay or default.

(x)

Whether any fraud by the company or any fraud on the Company by its officers/ employees has been noticed or reported during the year; if yes, the nature and the amount involved be indicated

No.

Not Applicable

(xi)

Whether managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act? If not, state the amount involved and steps taken by the company for securing refund of the same

Yes. Managerial Remuneration has been paid / provided in accordance with provisions of section 197 and under other rules.

(xii)

Whether the Nidhi Company has complied with the Net Owned Fund in the ratio of 1: 20 to meet out the liability and whether the Nidhi Company is maintaining 10% liquid assets to meet out the unencumbered liability

Not Applicable

(xiii)

Whether all transactions with the related parties are in compliance with Section 188 and 177 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc. as required by the accounting standards and Companies Act, 2013.

Yes

(xiv)

Whether the company has made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review and if so, as to whether the requirement of Section 42 of the Companies Act, 2013 have been complied and the amount raised have been used for the purposes for which the funds were raised. If not, provide details thereof

The Company has not made any preferential allotment / private placement of shares or fully / partly convertible debentures during the year. Hence compliance for utilization of funds are not applicable.

(xv)

Whether the company has entered into any noncash transactions with directors or persons connected with him and if so, whether provisions of Section 192 of Companies Act, 2013 have been complied with.

No.

Not Applicable

FOR, PRADEEP SINGHI & ASSOCIATES

Chartered Accountants

FRN: 108029W

Place: Surat

Date: 20/05/2016 Sd/-

PRADEEP KUMAR SINGHI

Proprietor

M. NO. 024612


Mar 31, 2015

Report on the Financial Statements

I have audited the accompanying financial statements of R & B DENIMS LIMITED, ("the company"). which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year 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 in section 134(5] of the Companies Act, 2013 ("the Act") with respect to 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 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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.

Auditors'' Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I 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.

I conducted my audit in accordance with the Standards on Auditing specified under section 143(10] of the Act. Those Standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable

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 financial control relevant to the Company''s preparation of the financial statements that give true and fair view 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 Company''s Directors, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion on the financial statements.

Auditor''s Opinion:

In my opinion and to the best of my information and according to the explanations given to me, 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 Profit and Loss Account, of the profit/ loss for the year ended on 31st March, 2015; and

c] in the case of the Cash Flow Statement, of the cash flows for the period from 1st April, 2014 to 31st March, 2015 on that date

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report] Order, 2004 issued by the Company Law Board in terms of Section 143(11] of the Companies Act, 2013,1 enclose in the "Annexure A" a statement on the matters specified there in.

2. As required by section 143(3] of the Act, I report that:

a] I have obtained all the information and explanations, which to the best of my knowledge and belief were necessary for the purpose of my audit.

b] In my opinion proper books of accounts as required by Law have been kept by the company, so far as it appears from my examination of the books.

c] The Balance Sheet, Profit & Loss Account and cash flow referred to in the report are in agreement with the books of accounts.

d] In my opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub section (3C] of section 211 of the Companies Act, 1956 read with General Circular 15/2013 dated 13.09.2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

e] There is nothing to disclose which is having adverse effect on the functioning of the company.

f] According to the information and explanations given to me and on the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015, from being appointed as a director in terms of sub-section (2] of section 164 of the Act.

g] With respect to the other matters included in the Auditor''s Report and to my best of my information and according to the explanations given to me:

I. The Company does not have any pending litigations which would impact its financial position

II. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses

III. There were no amounts which required to be transferred, to the Investor Education and Protection Fund by the Company.

As required by the Companies (Auditor''s Report] Order, 2004 and according to the information and explanations given to us during the course of audit and on the basis of such checks as were considered appropriate, I report that:

ANNEXURE "A" TO THE AUDITORS REPORT

Sr. Particulars Auditors Remark No.

(i) (a) whether the company is maintaining Yes the company is proper records showing full particulars, maintaining Prpoer including quantitative details and records situation of fixed assets;

(b) whether these fixed assets have been Yes physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account;

(ii) (a) whether physical verification of Yes inventory has been conducted at reasonable intervals by the management;

(b) are the procedures of physical Yes procedure of verification of inventory Yes procedures physical of physical verification of followed by verification of the management reasonable and adequate in inventory followed inventory followed by the management is by the management reasonable relation to the size of the is responsible company and the nature of its and and adequate adequate business. If not, the inadequacies in such procedures should be reported;

(c) whether the company is maintaining Yes Company is proper records of inventory and whether maintaining any material discrepancies were noticed proper records on physical verification and if so, and no material whether the same have been properly discrepancy was dealt with in the books of account; noticed.

(iii) (iii) whether the company has granted No. any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. If so,

(a) whether receipt of the principal N.A. amount and interest are also regular; and

(b) if overdue amount is more than rupees N.A. one lakh, whether reasonable steps have been taken by the company for recovery of the principal and interest;

(iv) is there an adequate internal control Yes internal system commensurate internal control system control system is adequate, with the size of the company inadequate and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Whether there is a continuing failure to correct major weaknesses in internal control system.

(v) in case the company has accepted No. Company has not deposits, whether the accepted any directives issued by the Reserve deposits, by the Bank of India and the Directives issued Reserve Bank of provisions of sections 73 to 76 India and or any other relevant provisions the provisions of there under, where relevant provisions sections 73 to 76 of the Companies Act and the applicable, or any have been complied with If not, other of the the nature of rules framed contraventions Companies should be stated; If an order has been Act and passed by Company Law Board or National the rules framed Company Law Tribunal or Reserve there under have Bank of India or any court or any other been complied. tribunal, whether the same has been complied with or not?

(vi) where maintenance of cost records has been Yes maintained. specified by the Central Government under sub-section (1) of section 148 of the Companies Act, whether such accounts and records have been made and maintained;

(vii) (a) is the company regular in depositing Yes. undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated by the auditor.

(b) in case dues of income tax or sales N.A. tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not constitute a dispute).

(c) whether the amount required to be N.A transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund within time.

(viii) whether in case of a company which has been N.A. as company registered for a period not less than five have no accumulated years, its accumulated losses at the end of losses. the financial year are not less than fifty per cent of its net worth and whether it has incurred cash losses in such financial year and in the immediately preceding financial year;

(ix) whether the company has defaulted in No. repayment of dues to a financial institution or bank or debenture holders If yes, the period and amount of default to be reported;

(x) whether the company has given any guarantee No. for loans taken by others from bank or financial institutions, the terms and conditions whereof are prejudicial to the interest of the company;

(xi) whether term loans were applied for the Yes. purpose for which the loans were obtained;

(xii) whether any fraud on or by the company has No. been noticed or reported during the year; If yes, the nature and the amount involved is to be indicated.

NOTE 1

R&B Denims is a Limited Company incorporated in November 2010 by the RawatKhedia and the Borana group, two amongst the most influential textile houses in the polyester hub at Surat. Both of these companies have a long lineage of more than 30 years each, in the textile industry, and are very well known in their areas of expertise. The commercial production of the Company had been started in financial year 2012-13

The Company is engaged in to the business of manufacturing and sale of quality Denim Textile Products. Today the Company is manufacturing various types of Denim ranging from 9 to 14 Oz/Sq. yd. with Open End Spun Yarns, Multi Count, Cottons and Polyester Spandex with Indigo Bottom Sulphur Toppings and Sulphar Bottom and Indigo Toppings with both Foam and Wet Finishes.

Since inception, growth of the company has been remarkable and company created itself a prime position among others. The brand has achieved nationwide recognision and image of its own. To enhance corporate image and brand name. Company has got listed on SME platform of Bombay Stock Exchange on 22nd April 2014.

NOTE 2

1. Basis of Accounting (AS 1)

I. The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India ("Indian GAAP") to comply with the Accounting Standards notified under Section 211(3C] of the Companies Act, 1956 ("the 1956 Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs] and the relevant provisions of the 1956 Act / 2013 Act, as applicable, and guidelines issued by the Securities Exchange Board of India.

II. These accounts are prepared on the historical cost basis and the accounting principles of a going concern.

III. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

2. Use of Estimates (AS 1]

The preparation of financial statement require estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

3. Inventories (AS 2]

Stock of Raw Material and WIP is valued at cost. Finished goods are valued at cost or market value whichever is less. Cost of Raw Material and Finished Goods includes the purchase cost (Net of any taxes on which credits are received or receivable] and other incidental cost, to bring such material to its present location and condition.

4. Cash Flows (AS 3)

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing and financing activities of the Company are segregated, accordingly.

5. Depreciation (AS 6)

Depreciation is provided on Written Down Value Method in the manners prescribed in Schedule II of Companies Act 2013 (In previous years as per Schedules XIV to the Companies Act, 1956], on the basis of shifts / manners of utilization of the assets. Depreciation on additions/ disposals during the year has been provided on pro-rata basis with reference to the nos. of days utilized.

The useful life of assets has been changed in Companies Act 2013 and accordingly depreciation rates are taken as per life of assets provided in Part C of Schedule II of Companies Act 2013. For the opening balances of fixed assets as on 1st April 2014, the rates for depreciation have been applied as mentioned in Note 7 of Part C of Schedule II of the Companies Act 2013. Accordingly the opening balances of Fixed Assets as on 1st April 2014 have been written off in the remaining life of respective assets as per New Companies Act.

6. Revenue Recognition (AS 9)

Revenue is recognised when it is earned and no significant uncertainty exists as to its realisation or collection. Revenue from sale of goods is recognised on delivery of the products, when all significant contractual obligations have been satisfied, the property in goods is transferred for a price, significant risks and rewards of ownership are transferred to the customers and no effective ownership is retained. Sales are net off taxes and accounted on mercantile basis.

7. Fixed Assets (AS 10)

(i] Fixed assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition and also include cost of installation wherever incurred. All pre-operative costs, including specific financing cost till commencement of commercial production, net charges on foreign exchange contracts and adjustment arising from foreign exchange rate variations attributable to the fixed assets are capitalised.

(ii] (ii] Depreciation on fixed assets has been charged on written down value basis, pro-rata for the period of use, by adopting the revised rates of depreciation specified in Schedule II of the Companies Act,2013.

8. Foreign Currency Transactions fAS 11)

(i) The reporting currency of the company is Indian rupees.

(ii) Transactions in foreign currencies are recognized at the prevailing exchange rates on the transaction dates. Realize gain and losses on settlement of foreign currency transactions are recognized in the profit and loss account under the natural revenue heads of accounts. Exchange differences relating to fixed assets are capitalised to respective Fixed Asset.

(iii] Foreign Currency assets and liabilities at the year end are translated at the year end exchange rates, and the resultant exchange difference is recognized in the profit and loss account.

(iv) In case of forward contract, foreign currency derivatives or other financial instruments that are in substance forward exchange contracts, the premium or discount arising at the inception of the contract transactions are included in determining the net profit for the year.

9. Investments (AS 13)

Long term Investments are valued at cost. Provision for diminution is made to recognise a decline, other than temporary, in the value of investments. Current investments are stated at lower of cost or market value.

10. Employee benefits (AS 15)

Defined- contrihution plans:

i) Provident fund and pension scheme are Defined Contribution Plans in the Company. The Company is a member of recognized Provident Fund scheme established under The Provident Fund & Miscellaneous Act, 1952 by the Government of India. The Company is contributing 12% of Salary & Wages of eligible employees under the scheme every month. The amount of contribution is being deposited each and every month. The contribution paid or payable under the scheme is recognized during the period under which the employee renders the related services.

(ii) Employee Gratuity Fund Scheme is the Defined Benefit Plan. Provision for gratuity has been made in the accounts, in case of those employees who are eligible for the retirement benefits. Gratuity is paid at the time of retirement of employees. Provision for gratuity liability is provided based on Actuarial Valuation made.

11. Foreign exchange transactions

i) Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transaction. Gains and losses resulting from the settlement of such transactions are recognised in the profit and loss account. Exchange differences relating to fixed assets are adjusted in the cost of the asset.

(ii] Amount payable and receivable in the foreign currency as at the year end are translated at the year end exchange rate. Gains and losses thereon are recognised in the profit and loss account.

12. Borrowing costs (AS 16)

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of that asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use.

13. Earnings per share (AS 20)

Basic and Diluted earnings/(loss) per share are calculated by dividing the net profit / (loss) for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes] by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for any bonus shares issued during the year and also after the balance sheet date but before the date the financial statements are approved by the board of directors.

14. Taxes on income (AS 22]

Current tax - Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions.

Deferred tax - Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are recognised and carried forward to the extent that there is a reasonable or virtual certainty, as may be applicable, that sufficient future taxable income will be available against which such deferred tax asset can be realised.

15. Impairment of assets (AS 28)

An impairment loss is charged to the Statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

16. Provisions and contingent liabilities (AS 29)

A provision is recognised when the company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably.

17. Preliminary Expenses (AS 26)

Preliminary Expenditure is written off fully during the year under its occurance as per As 26.

FOR, PRADEEP SINGHI & ASSOCIATES Chartered Accountants FRN. 108029W

SD/-

PRADEEP KUMAR SINGHI Proprietor Date: 20/05/2015 M. NO. 024612 Place: Surat


Mar 31, 2014

I have audited the accompanying financial statements of R & B DENIMS LIMITED, which comprise the Balance Sheet for the year ended on 31st March, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the same period, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with General Circular 15/2013 dated 13.09.2013 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 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

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that I 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.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Auditor''s Opinion:

In my opinion and to the best of my information and according to the explanations given to me, 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, 2014;

b) in the case of the Profit and Loss Account, of the profit/ loss for the year ended on 31st March, 2014; and

c) in the case of the Cash Flow Statement, of the cash flows for the period from 1st April, 2013 to 31st March, 2014 on that date

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2004 issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, I enclose in the "Annexure A" a statement on the matters specified in paragraphs 4 and 5 of the said order.

2. As required by section 227(3) of the Act, we report that:

a) I have obtained all the information and explanations, which to the best of my knowledge and belief were necessary for the purpose of my audit.

b) In my opinion proper books of accounts as required by Law have been kept by the company, so far as it appears from my examination of the books.

c) The Balance Sheet, Profit & Loss Account and cash flow referred to in the report are in agreement with the books of accounts.

d) In my opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956 read with General Circular 15/2013 dated 13.09.2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

e) According to the information and explanations given to me and 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 31st March, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

As required by the Companies (Auditor''s Report) Order, 2004 and according to the information and explanations given to us during the course of audit and on the basis of such checks as were considered appropriate, I report that:

ANNEXURE "A" TO THE AUDITORS REPORT

1 Fixed Assets :

a) The company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to me, the assets have been physically verified by the management in accordance with a phased program of verification, which in my opinion is reasonable, considering, the size and nature of its business. The frequency of verification is reasonable and no material discrepancies have been noticed on such physical verification.

c) The Company has not disposed of the substantial part of fixed assets during the period covered under Audit, which affect the going concern assumption.

2 Inventory:

a) As informed to me, the stock of finished goods, work-in-progress, stores, spare-parts & raw materials have been physically verified by the management at reasonable intervals during the period covered under Audit, except material lying with third parties, where confirmations are obtained. In my opinion the frequency of verification is reasonable.

b) In my opinion the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c) The Company has maintained proper records of inventories. The discrepancies noticed on the verification of stocks as compared to book records were not material and these have been properly dealt with in the books of accounts.

3 Loans & Advances:

a) The company has taken unsecured loans from companies, Firms or other parties mentioned under the register maintained u/s. 301 of the companies Act, 1956. There are four such parties and amount of loan accepted during the period under audit is Rs. 240 lacs. The amount of loan repaid to eight such parties during the period under audit is Rs. 385 lacs.

b) As per information and explanations given to me, the rate of interest wherever applicable and other terms and conditions, if applicable on loan taken are not prima facie prejudicial to the interest of the Company.

c) The company has not granted loans to companies, Firms or other parties mentioned under the register maintained u/s. 301 of the companies Act, 1956.

d) As per information and explanation given to me, no interest is charged on any loan granted by the company wherever applicable. Other terms and conditions, if applicable on loan given are not prima facie prejudicial to the interest of the company.

e) The parties to whom advances in the nature of loans have been given are repaying the principles amounts as stipulated wherever applicable.

f) There are no overdue amounts of loans taken or granted by the company.

4 Internal control procedure :

In my opinion and according to the information and explanations given to me, internal control procedure for the purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods are adequate with the size of the company and nature of its business. During the course of my audit, no major weakness has been noticed in the internal controls.

5 Transaction with Parties u/s. 301:

a) The Transaction made in pursuance of contracts or arrangements that need to be entered into the register maintained u/s. 301 of the companies act, 1956 have been recorded in register.

b) In my opinion and according to the information and explanation given to me, the transaction exceeding Rs.5 Lacs each have been made at price, which are reasonable having regards to prevailing market price at the relevant time.

6 Public Deposits:

The company has not accepted deposits from public; hence the clause is not applicable.

7 Internal Audit System:

In my opinion, the company has an adequate internal audit system commensurate with its size and nature of its business.

8 Cost Records :

I have reviewed the books of accounts maintained by the Company as prescribed by the Central Government for maintenance of cost records u/s. 209(1)(d) of the Companies Act, 1956 and I am of the opinion that prima facia the prescribed accounts and records have been made and maintained. However, I have not carried out a detail examination of the accounts and records.

9 Statutory Dues:

i) According to the information and explanation given to me and the records examined by me, the company is generally regular in depositing undisputed statutory dues including Income tax, Service Tax, Wealth tax, Sales tax, Custom duty, Excise Duty, Provident Fund, Cess and any other statutory dues with appropriate authorities. According to the information and explanations given to me, there are no undisputed amounts payable in respect of Statutory dues which has remained outstanding as at 31st March, 2014 for a period more than six months from the date they became payable.

ii) According to the information and explanation given to me, there is no undisputed amount payable in respect of such statutory dues.

10 Accumulated/Cash Losses :

The company has accumulated losses at the end of the period covered under Audit and it has not incurred any cash losses in the current and immediate preceding financial year.

11 Default in Repayment of Dues to Banks/Financial Institution etc :

The company has not defaulted in repayment of dues to the Financial Institution or Banks.

12 Granting of Loan & Advances :-

According to the information and explanations given to me, the Company has not granted any unsecured or secured Loan & Advances on the basis of securities by way of pledge of shares, debentures and other securities.

13 Chit Fund/Nidhi/Mutual Fund:

The provisions of any Special Statute applicable to Chit Fund, Nidhi, Mutual Benefit Fund/ Societies are not applicable to the company.

14 Dealing or Trading in Shares etc :

As explained to me by the management, the company has not purchased securities / shares of the Govt. and other companies for investment purpose.

15 Guarantee Given by Company :

As explained to me, the company has not given any guarantee.

16 Utilization of Term Loans:

In my opinion and according to the information and explanations given to me, the term loans are applied for the purpose for which the loans were obtained.

17 Application of Short Term Fund for Long Term Investment and vice versa :

According to the information and explanations given to me and on an overall examination of the balance sheet of the company, I report that short term funds have not been used to finance long term investments and vice versa.

18 Preferential Allotment of Shares :

During the period covered under Audit, the company has issued 5,00,000 equity shares at Rs. 10 each with securities Premium Rs. 20 each on 29-04-2013 and 15,00,000 equity shares at Rs. 10 each with securities Premium Rs. 20 each on 28-06-2013.

19 Creation of Securities for Debenture Issued:

The Company has not issued any Debenture during the period covered under Audit.

20 End Use of Money:

The Company has not raised any money by way of public issues during the period covered under Audit.

21 Fraud noticed or Reported :

As per information & explanation given to me, no fraud on or by the company has been noticed or reported during the course of my audit.

FOR, PRADEEP SINGHI & ASSOCIATES Chartered Accountants FRN. 108029W

PRADEEP KUMAR SINGHI Proprietor Date: 25/08/2014 M. NO. 024612 Place: Surat

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