TO
THE MEMBERS OF ASIAN STAR COMPANY LIMITED
Report on the Audit of the Standalone Ind AS Financial Statements
Opinion
We have audited the standalone Ind AS financial statements of Asian
Star Company Limited (“the Company”), which comprise the balance sheet as at
31st March 2022, and the statement of Profit and Loss (including Other Comprehensive
Income), Statement of changes in equity and statement of cash flows for the year then
ended, and notes to the financial statements, including a summary of significant
accounting policies and other explanatory information (hereinafter referred to as
“the standalone financial statements”)
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, of the state of
affairs of the Company as at March 31, 2022, and profit/loss, changes in equity and its
cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in
accordance with the Standards on Auditing (SAs) specified under section 143(10) of the
Companies Act, 2013. Our responsibilities under those Standards are further described in
the Auditors Responsibilities for the Audit of the Financial Statements 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 financial statements under the provisions of the
Companies Act, 2013 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 we have obtained is sufficient and appropriate to provide a basis
for our opinion on the standalone Ind AS financial statements.
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 donot provide
a separate opinion on these matters. We have determined the matters described below to be
the key audit matters to be communicated in our report.
| Sr. No. Key Audit Matter |
Auditors Response |
| 1. Gems & Jewellery is highly working capital-intensive
industry and Inventory is a major component of it. |
|
| Inventory mainly consists of Rough Diamonds, Cut &
Polished diamonds, Jewellery, Gold and other precious metal and precious and semi-precious
stones. |
In view of the significance of the matter,
we have applied the following audit procedures in this area, among other procedures to
obtain sufficient audit evidence: |
| Cut & Polished Diamonds not being a standardized product
requires specialized skill and knowledge for valuation. The assessment of its Net
Realisable value is based on the assessment by the management and valuation done by the
government approved valuer based on various parameters of diamonds and marketable
conditions. |
- We assessed the appropriateness of the
inventories accounting policies and its compliances with the applicable accounting
standards. |
|
- We evaluated the key controls with respect
to the movement of inventory and its recording. There are sufficient and effective
controls in the IT systems recording movement from manufacturing to sales. |
|
- Inventory of cut & polished diamonds
is valued using Specific Identification method to the extent possible and where it is not
possible, due to vast variety, quality and peculiarity of goods, the valuation is done
using Retail Method. |
| Because of the above reasons we have identified inventory as
Key audit matter. |
|
|
- We evaluated reasonableness of the
managements assessment of net realizable value which is substantiated by the valuation
done by a government approved valuer. |
|
- We have also obtained a documentation of
the verification of Inventory done by the company. The same has been assessed and
effective control seems to be in place with regards to Inventory. |
Responsibility of Management for Standalone Ind AS Financial Statements
The Companys 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 that give a true and fair view
of the financial position, financial performance, (changes in equity) 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. 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 statement that give
a true and fair view and are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is responsible for
assessing the Companys 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.
That Board of Directors is also responsible for overseeing the
companys financial reporting process.
Auditors Responsibilities for the Audit of Standalone Ind AS
Financial Statements
Our objectives are to obtain reasonable assurance about whether the
standalone Ind AS financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors 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 these standalone Ind AS financial
statements.
As part of an audit in accordance with SAs, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the
standalone financial statements, whether due to fraud and 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 one resulting from error, as fraud may
involve collusion ,forgery, intentional omissions ,misrepresentations ,or the override of
internal control.
2. Obtain an understanding of internal financial controls relevant to
the audit in order to design audit procedures that are appropriate in the circumstances ,
Under section 143(3)(i) of the Act, We are also responsible for expressing our opinion on
whether the company has adequate internal financial control system in place and the
operating effectiveness of such controls.
3. Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by management.
4. Conclude on the appropriateness of managements 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
ability of the Group to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors report to the
related disclosures in the standalone financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditors report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the
standalone financial statements, including the disclosures, and whether the standalone
financial statements represent 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
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 safeguards.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors Report) Order, 2016 ("the
Order"), issued by the Central Government of India in terms of subsection (11) of
section 143 of the Companies Act, 2013, we give in the "Annexure- A" statement
on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
As required by Section 143(3) of the Act, we report that:
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.
a 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.
b The Balance Sheet, the Statement of Profit and Loss (including other
comprehensive income), statement of change in equity and the Cash Flow Statement dealt
with by this Report are in agreement with the books of account.
c 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.
d On the basis of the written representations received from the
directors as on 31st March, 2022 taken on record by the Board of Directors, none of the
directors is disqualified as on 31st March, 2022 from being appointed as a director in
terms of Section 164 (2) of the Act.
e With respect to the adequacy of the internal financial control over
the financial reporting of the company and the operating effectiveness of such controls,
refer to our separate Report in "Annexure-B". Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of the Companys Internal Financial
Controls over financial reporting.
f 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
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 which
would impact its financial position in its standalone Ind AS financial statements -Refer
Note 36 to the standalone Ind AS financial statements.
ii. The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any, and as required on
long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the Company.
|
For Mahendra Doshi & Associates |
|
Chartered Accountants |
|
FRNo. 105765W |
|
Mahendra Doshi |
|
Proprietor |
| Place : Mumbai |
Membership No.41316 |
| Date: May 30, 2022 |
UDIN: 22041316AKQKAB9465 |
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements
section of our report of even date to the Members of Asian Star Company Limited)
1. In respect of the Companys fixed assets:
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. As informed to us,
no material discrepancies have been noticed upon such verification.
c. The title deeds of immoveable properties are held in the name of the company
d. During the year none of the Assets of the Company is revalued.
e. There have not been any proceeding initiated, or are pending against the company for
holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of
1988) and rules made there under.
2. a. The stocks of finished goods and raw-materials have been physically verified by
the management at the end of the accounting year. In our opinion, the Company has
maintained proper records of inventory. No material discrepancies were noticed on physical
verification as compared to the book records.
b. The company is having working capital limits in excess of Five Crore Rupees in
aggregate from Bank on the basis of security of assets; Quarterly statements filed by the
Company are in agreement with the books of accounts of the Company.
3. During the year, the company has not made investments in, provided any guarantee or
security or granted any loans or advances in the nature of loans, secured / unsecured, to
Companies, firms, Limited Liability Partnership or any other parties.
As per records provided to us, the terms and conditions of guarantee provided are not
prejudicial to the interest of the company.
a. The Company has not provided any loan or advances in the nature of loan. As the
Company has not provided any loans or advances in the natue of loan, the other clauses (b)
to (d) are not applicable.
4. In our opinion and according to the information and explanations given to us, the
Company has not entered into any transaction, which attract provisions of section 185 and
186, in respect of loans, investments, guarantees and securities.
5. The Company has not accepted any deposits from the public during the year.
6. The maintenance of cost records has not been specified by the Central Government
under section 148(1) of the Companies Act, 2013 for the business activities carried out by
the Company. Thus reporting under clause 3(vi) of the order is not applicable to the
Company.
7. a. According to the records of the Company and as per information and explanation
given to us, the Company is generally regular in depositing undisputed statutory dues
including Provident Fund, Employees State Insurance, Income-Tax, Goods and Service Tax,
Duty Of Customs, Duty of Excise, Value Added Tax, and any other statutory dues applicable
to it with appropriate authorities and there were no undisputed dues outstanding as on
31st March, 2022 for a period of more than six months from the date they become payable.
b. Details of statutory dues referred to in subclause (a) which have not been deposited
as at March 31, 2022 on account of dispute are given below:
| Nature of the statute |
Nature of dues |
Forum where the dispute is pending |
Period to which dispute relates |
Amount in Rs. Crores |
Remarks (if any) |
| The Income Tax Act, 1961 |
Income Tax |
Commissioner of Income Tax (Appeals) |
A. Y.2012-13, A.Y. 2014-15 & A.Y.
2019-20 |
11.12 |
Rectification filedfor Rs. 0.75 cr and
Appeal filed for Rs. 10.37 cr |
| The Customs Act, 1962 |
Custom Duty and Interest |
Commissioner of Customs |
December 2009 to September 2013 |
3.32 |
Demand is stayed by order of Gujarat High
court |
8. During the year under consideration the company does not have any transaction which
have been surrendered or disclosed as non-recorded income during the year in the tax
assessments under the Income Tax Act, 1961;
9. a. In our opinion and according to the information and explanations given to us the
Company has not defaulted in repayment of dues to Government, any Financial Institution or
Bank or Debenture holders.
b. According to the information and explanation provided to us by the Management and on
the basis of our examination of the records of the company, the Company has not been
declared as Willful defaulter by any bank or financial institution during the year.
c. During the year the Company has not availed any term loan for the purpose of
business.
d. From the records available we have not found any transaction where the funds raised
for short term have been used for long term purposes.
e. The company has not taken any funds from the entity or person on account of or to
meet the obligation of its subsidiaries, associates, or joint ventures.
f. the Company has not raised loans during the year on the pledge of securities held in
its subsidiaries, joint ventures or associate companies.
10. a. To the best of our knowledge and belief and according to the information and
explanations given to us, the Company has neither obtained any term loans nor has raised
money by way of initial public offer or further public offer during the year. (including
debt instruments).
b. The Company has not made any preferential allotment or private placement of shares
or convertible debentures (fully, partially or optionally convertible) during the year.
11. a. In our opinion and according to the information and explanations given to us no
fraud by the Company or any fraud on the Company by its officers or employees has been
noticed or reported during the year.
b. There has been no report under sub-section (12) of section 143 of the Companies Act
has been filed, by the auditors in Form ADT-4 as prescribed under rule 13 of Companies
(Audit and Auditors) Rules, 2014 with the Central Government
c. The Company has not received any whistle blower complaints during the year
12. The Company is not a Nidhi Company and hence reporting under clause 3(xii) of the
Order is not applicable.
13. 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 notes to accounts of the financial statements as
required by the applicable accounting standards
14. The company has an adequate internal audit system commensurate with the size and
nature of its business. According to the information and explanations given to us and
based on our examination of the internal Audit reports submitted by the Internal Auditors,
it can be ascertained that the internal audit system exists and is functioning
effectively.
15. In our opinion and according to the information and explanations given to us the
Company has not entered into any non-cash transactions with the directors or persons
connected with him.
16. a The company is not required to obtain registration under section 45-IA of the
Reserve Bank of India Act 1934.
b As per records available the company has not conducted any Non-Banking Financial or
Housing Finance activities.
c The company is not a Core Investment Company (CIC) as defined in the regulations made
by the Reserve Bank of India,
17. The company has not incurred cash losses in the financial year and in the
immediately preceding financial year.
18. There has been no resignation of the statutory auditors during the year.
19. On the basis of the financial ratios, ageing and expected dates of realization of
financial assets and payment of financial liabilities, other information accompanying the
financial statements, the auditors knowledge of the Board of Directors and management
plans, the auditor is of the opinion that no material uncertainty exists as on the date of
the audit report that company is capable of meeting its liabilities existing at the date
of balance sheet as and when they fall due within a period of one year from the balance
sheet date
We, however, state that this is not an assurance as to the future viability of the
company. We further state that our reporting is based on the facts up to the date of the
audit report and we neither give any guarantee nor any assurance that all liabilities
falling due within a period of one year from the balance sheet date, will get discharged
by the company as and when they fall due.”
20. In our opinon and according to the information and explanation given to us with
respect to obligations under Corporate Social Responsibility, the company has spent the
amount it is liable to spend on account of Corporate Social Responsibility as required
under sub-section (5) of Section 135 of the Companies Act, 2013 and there are no amounts
unspent in that regard.
|
For Mahendra Doshi & Associates |
|
Chartered Accountants |
|
FRNo. 105765W |
|
Mahendra Doshi |
|
Proprietor |
| Place : Mumbai |
Membership No.41316 |
| Date: May 30, 2022 |
UDIN: 22041316AKQKAB9465 |
ANNEXURE “B” TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2(e) under Report on Other Legal and
Regulatory Requirements section of our report to the Members of
Asian Star Company Limited of even date)
Report on the Internal Financial Controls Over Financial Reporting
under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the
Act”)
We have audited the internal financial controls over financial
reporting of ASIAN STAR COMPANY LIMITED (“the Company”) as of March 31, 2022 in
conjunction with our audit of the standalone financial statements of the Company for the
year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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 companys 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 Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys 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 “Guidance Note”) and the Standards on Auditing, issued by the
Institute of Chartered Accountants of India. Those Standards and 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 auditors judgment, including the assessment of the
risks of material misstatements 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 for a basis for our audit opinion on the Companys internal
financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a
process designed to provide a 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 companys internal financial control over
financial reporting includes those policies and procedures that: 1) pertain to 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 to 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
companys 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 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 system over financial reporting were operating effectively as at 31st March,
2022, 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 Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India.
|
For Mahendra Doshi & Associates |
|
Chartered Accountants |
|
FRNo. 105765W |
|
Mahendra Doshi |
|
Proprietor |
| Place : Mumbai |
Membership No.41316 |
| Date: May 30, 2022 |
UDIN: 22041316AKQKAB9465 |
+91-9892691696
