To the Members of M/s. Flora Textiles Limited Report on the Standalone Financial
Statements Opinion
We have audited the accompanying standalone financial statements of Flora Textiles
Limited ("the Company"), which comprise the balance sheet as at 31st
March 2023, 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 (herein 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 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
Indian Accounting Standards prescribed under Section 133 of the Act read with the
Companies (Indian Accounting Standards) Rules 2015, as amended, ("Ind AS") and
other accounting principles generally accepted in India, of the state of affairs of the
Company as at March 31, 2023, and Loss and total comprehensive income, changes in equity
and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone 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.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Managements Responsibility for the Standalone 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 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 implementation
and maintenance of 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. The Board of Directors are also responsible for overseeing the
Companys financial reporting process.
Auditors Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
a) Identify and assess the risks of material misstatement of the financial statements,
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.
b) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
c) Conclude on the appropriateness of managements u se 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 Companys
ability 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 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 Company to cease to continue as
a going concern.
d) Evaluate the overall presentation, structure and content of the financial
statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements
that, individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the financial statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) planning the scope of our audit
work and in evaluating the results of the results of our work; and (ii) to evaluate the
effect of any identified misstatements in the financial statements.
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 safeguards.
From the matters communicated to those charged with governance, we determine those
matters that were of most significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters. We describe these matters
in our auditors report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because of adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors Report) Order, 2020 ("the Order"),
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Companies Act, 2013, we give in the "Annexure A" a statement on the matters
specified in paragraphs 3 and 4 of the Order, tothe extent applicable.
As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive
income), and Statement of Changes in Equity and the Cash Flow Statement dealt with by this
Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014.
e) In terms of Notification no. G.S.R. 463 (E) dt. 05.06.2015 issued by the Ministry of
Corporate Affairs, the provisions of Section 164(2) of the Companies Act, 2013 in respect
of disqualification of directors are not applicable to the Company.
f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in "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 our opinion
and to the best of our information and according to the explanations given to us:
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 derivative contracts for
which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief,
no funds (which are material either individually or in the aggregate) have been advanced
or loaned or invested (either from borrowed funds or share premium or any other sources or
kind of funds) by the Company to or in any other person or entity, including foreign
entity ("Intermediaries"), with the understanding, whether recorded in writing
or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest
in other persons or entities identified in any manner whatsoever by or on behalf of the
Company ("Ultimate Beneficiaries") or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no
funds (which are material either individually or in the aggregate) have been received by
the Company from any person or entity, including foreign entity ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the
Company shall, whether, directly or indirectly, lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the Funding
Party("Ultimate Beneficiaries") or provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate
in the circumstances, nothing has come to our notice that has caused us to believe that
the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under(a)and
(b) above, contain any material misstatement.
v. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books
of account using accounting software which has a feature of recording audit trail (edit
log) facility is applicable to the Company with effect from April 1, 2023, and
accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is
not applicable for the financial year ended March 31, 2023.
Annexure A to the Independent Auditors Report
(Referred to in paragraph 2 under Report on Other Legal and Regulatory Requirements
section of our report to the members of Flora Textiles Limited of even date)
To the best of our information and according the explanations provided to us by the
Company and books of accounts and records examined by us in the normal course of audit, we
state that:
i. In respect of the Companys Property, Plant and Equipment and Intangible assets:
a. The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
b. The Company has a program of verification to cover all the items of fixed assets in
a phased manner which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. Pursuant to the program, certain fixed assets were
physically verified by the Management during the year. According to the information and
explanations given to us, no material discrepancies were noticed on such verification.
c. According to the information and explanations given to us, the records examined by
us and based on the examination of the copies of the conveyance deeds provided to us, we
report that, the title deeds, comprising all the immovable properties of land and
buildings which are freehold, are held in the name of the Company as at the Balance Sheet
date.
d. The Company has not revalued its Property, Plant and Equipment (including Rights of
use)
e. No proceedings have been initiated or pending against the Company for holding any
benami property under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and
rules made thereunder
ii. a. The inventories have been physically verified by the management at reasonable
intervals during the year. In our opinion, the frequency of such verification is
reasonable and no discrepancies were noticed at the time of verification.
b. According to the information and explanations given to us, and relevant records
produces, the Company has not been sanctioned any working capital limits from any
banks/financial institutions on the basis of security of assets.
iii. According to the information and explanations given to us, the Company has not
granted any loans or advances in the nature of loans, secured or unsecured to Companies,
Firms, Limited Liability Partnership or other parties listed in the register maintained
under Section 189 of the Companies Act, 2013. Consequently, the provisions of Clause (iii)
(a-A,B), (iii) (b), (iii) (c), (iii) (d). (iii) (e) and (iii) (f) of Paragraph 3 of the
order are not applicable to the company.
iv. In our opinion and according to the information and explanations given to us, the
Company has complied with the provisions of Sections 185 and 186 of the Act in respect of
grant of loans, making investments and providing guarantees and securities, as applicable.
v. According to the information and explanations given to us and based on our audit
procedure, the Company has not accepted deposits during the year within the meaning of
section 73 to 76 of the Act or any other relevant provisions of the Companies Act, 2013
and the Companies (Acceptance of Deposit) Rules 2014.
vi. 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.
vii. According to the information and explanations given to us, in respect of statutory
dues:
a. The Company has generally been regular in depositing undisputed statutory dues,
including Provident Fund, Employees State Insurance, Income Tax, Goods and Service Tax,
Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with
the appropriate authorities.
b. There were no undisputed amounts payable in respect of Provident Fund, Employees
State Insurance, Income Tax, Goods and Service Tax, Customs Duty, Excise Duty, Cess and
other material statutory dues in arrears as at March 31, 2023 for a period of more than
six months from the date they became payable.
c. The company does not have any disputes in respect of Provident Fund, employees state
insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty,
cess, Goods and Service Tax and any other material statutory dues applicable to the
company.
viii. According to the records of the Company examined by us and the information and
explanations given to us, no transactions have been recorded in the books of accounts
which have been surrendered or disclosed as income during the year in the tax assessments
under the Income-tax Act, 1961
ix. According to the records of the Company examined by us and the information and
explanations given to us:
a. The Company has not defaulted in repayment of loans or other borrowings or in the
payment of interest thereon to any lender
b. The Company is not a declared wilful defaulter by any bank or financial institution
or other lender
c. The term loans have been utilized for the purposes for which they were obtained
d. According to the information and explanations given to us, and the procedures
performed by us, and on overall examination of the financial statements of the company, we
report that the no funds raised on short-term basis have been used for long-term purposes
of the company
e. According to the information and explanations given to us and on overall examination
of the financial statements of the company, we report that the company has not taken any
funds
from any entity or person on account of or to meet the obligations of its subsidiaries,
associates or joint ventures
f. According to the information and explanations given to us and procedures applied by
us, we report that the company has not raised any loans during the year on the pledge of
securities held in its subsidiaries, associates or joint ventures
x. The Company has not raised moneys by way of initial public offer or further public
offer (including debt instruments) and hence reporting under Clause 3(x) (a) of the Order
is not applicable to the Company.
xi. a. During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing practices in India and
according to the information and explanations given to us, we have neither come across any
instance of fraud by the Company or on the Company by its officers oremployees, noticed or
reported during the year.
b. No report under sub-section 12 of section 143 of the Companies Act, 2013 has been
filed 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 whistleblower complaints during the year.
xii. The Company is not a nidhi company and hence, reporting under Clause 3(xii) of the
Order is not applicable to the Company.
xiii. In our opinion and according to the information and explanations given to us, the
Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where
applicable, for all transactions with the related parties and the details of related party
transactions have been disclosed in thestandalone financial statements as required by the
applicable accounting standards.
xiv. (a) In our opinion and based on our examination, the company has an internal audit
system commensurate with the size and nature of its business
(b) We have considered the internal audit report of the company issued till date, for
the period under audit
xv. In our opinion and according to the information and explanations given to us,
during the year the Company has not entered into any non-cash transactions with its
directors or persons connected to its directors and hence provisions of Section 192 of the
Companies Act, 2013 are not applicable to the Company.
xvi. (a) The Company is not required to be registered under Section 45-IA of the
Reserve Bank of India Act, 1934. Hence, reporting under clause 3(xvi) (a), (b) and (c) of
the Order is not applicable
(b) In our opinion, the Company is not Core Investment Company and hence reporting
under clause 3 (xvi) (b) is not applicable
xvii. The company has incurred any cash loss of Rs. 62.42 lakhs in the current year and
has not incurred any cash loss in the immediately preceding financial year
xviii. There has been no resignation of the statutory auditors during the year
xix. Based on our examination and the information and explanations given to us with
respect to financial rations, ageing and expected dates of realization of financial assets
and payment of financial liabilities, other information accompanying the financial
statements, and our knowledge of the Board of Directors and management plans, no material
uncertainty exists as on the date of audit report that company is capable of meeting its
liabilities existing as on 31st March 2023 as and when they fall due within a
period of one year
xx. According to the records of the company examined by us and the information and
explanations given to us, the company is not required to spend any amount towards
Corporate Social Responsibility (CSR)
Annexure B to the Independent Auditors Report
(Referred to in paragraph 1 (f) under Report on Other Legal and Regulatory
Requirements section of our report to the members of Flora Textiles 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 Flora
Textiles Limited (the Company) as of March 31, 2023 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 Board of Directors of the Company is responsible for establishing and maintaining
internal financial controls based on the internal control over financial reporting
criteria established by the Company considering the essential components of internal
control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the Institute of Chartered Accountants of India. These
responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, 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
Our responsibility is to express an opinion on the internal financial controls over
financial reporting of the Company 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) issued by the Institute of Chartered Accountants of India
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 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 judgement, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or
error.
We believe that the audit evidence we have obtained, is sufficient and appropriate to
provide a basis for ouraudit 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 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 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 the
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 of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given
to us, the Company has, in all material respects, an adequate internal financial controls
system over financial reporting and such internal financial controls over financial
reporting were operating effectively as at March 31, 2023, 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.
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