To
THE MEMBERS OF,
HARIAAPPARELS LIMITED.
Report on the Audit of Financial Statements
Opinion
We have audited the accompanying financial statements of Haria Apparels Limited,
which comprise the Balance Sheet as at 31st March 2023, 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 financial statements,
including a summary of the significant accounting policies and other explanatory
information. (hereinafter referred to as "financial statements") In our opinion
and to the best of our information and according to the explanations given to us, the
aforesaid financial statements give the information required by the Companies Act,
2013("the Act") in the manner so required and give a true and fair view in
conformity with the Accounting Standards prescribed under section 133 on 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 31st March, 2023, and its profit, other comprehensive income, the
changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under
those SAs are further described in the Auditors Responsibility 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 (ICAI) together with the ethical requirements
that are relevant to our audit of the financial statements under the provisions of the act
and the rules made thereunder, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the ICAIs 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 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 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. We
have determined there are no key audit matters to be communicated in our report
Information Other Than the Financial Statements and Auditors Report Thereon
The Companys management and Board of Directors are responsible for the other
information. The other information comprises the information included in the Companys
annual report, but does not include the financial statements and our auditors report
thereon.
Our opinion on the financial statements does not cover the other information and we do
not and will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements, or our knowledge obtained during
the course of our audit or otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this
regard.
Managements Responsibility for the Financial Statements
The Companys management and Board of Directors are responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the
preparation and presentation of these financial statements that give a true and fair view
of the financial position, financial performance including other comprehensive income,
cash flows and changes in equity of the Company in accordance with Indian Accounting
Standards (Ind AS) prescribed under Section 133 of the Act, read with Companies (Indian
Accounting Standards) Rules, 2015, as amended and other accounting principles generally
accepted in India. This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments and estimates that are
reasonable and prudent; and design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and presentation of
the financial statements 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 and Board of Directors are
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.
Board of Directors is also responsible for overseeing the Companys financial reporting
process.
Auditors Responsibility for 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:
• 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.
• Obtain an understanding of internal control 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 controls with reference to financial statements in place and
the operating effectiveness of such controls
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
• 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 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.
• 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.
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 with those charged with governance, we determine those
matters that were of most significance in the audit of the 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 the 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
1. 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 Act, we give in the "Annexure A" a statement on the matters specified in the
paragraph 3 and 4 of the order.
2. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the 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), statement of changes in equity and statement of cash flow dealt with by this
Report are in agreement with the books of account;
d. In our opinion, the aforesaid financial statements comply with the Indian Accounting
Standards prescribed under Section 133 of the Act
e. On the basis of the written representations received from the directors as on 31st
March 2023 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March 2023 from being appointed as a director in terms
of Section 164 (2) of the Act;
f. With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in "Annexure B"; and
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 as om 31st March, 2023
which would impact its financial position;
ii. 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.
iii. There has been no delay in transferring amounts required to be transferred to the
Investor Education and Protection Fund.
iv. The management has represented that, to the best of its knowledge and belief, no
funds 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 persons
or entities, including foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall:
- directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or
- Provide any guarantee, security, or the like to or on behalf of the Ultimate
Beneficiaries.
v. The management has represented, that, to the best of its knowledge and belief, no
funds have been received by the Company from any persons or entities, including foreign
entities ("Funding Parties"), with the understanding, whether recorded in
writing or otherwise, that the Company shall:
- directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding
Party or
- provide any guarantee, security, or the like from or on behalf of the Ultimate
Beneficiaries; and
vi. Based on such audit procedures as considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the
representations under subclause (g) (iv) and (v) contain any material misstatement.
For RAK CHAMPS & CO LLP.
Chartered Accountants
Firm Registration No. 131094W
RAMANATHA SHETTY
PARTNER
M. No. 218600
UDIN: 23218600BGQJTI7004
Place: MUMBAI
Date: 30/05/2023
ANNEXURE - A TO THE INDEPENDENT AUDITORS REPORT
The Annexure referred to in Independent Auditors Report to the members of the Company
on the financial statements for the year ended 31st March 2023, according to
the information and explanations given to us and on the basis of our examination of the
records of the Company, we report that:
i. Fixed Assets:
a. (A) The Company has maintained proper records showing full particulars, including
quantitative details and situation of Property, Plant and Equipment.
(B) The Company does not have any intangible asset. Accordingly, clause 3(i)(a)(B) of
the order is not applicable.
b. The Company has a regular programme of physical verification of its Property, Plant
and Equipments by which Property, Plant and Equipments are verified in a phased manner
over a period of three years. In accordance with this programme, certain Property, Plant
and Equipments were verified during the year and no material discrepancies were noticed
on such physical verification. In our opinion, this periodicity of physical verification
is reasonable having regard to the size of the Company and the nature of its assets.
c. The title deeds of immovable properties (other than immovable properties where the
Company is the lessee, and the lease agreements are duly executed in favour of the lessee)
disclosed in the financial statements are held in the name of the Company except for the
following:
| Description of Property |
Gross carrying value |
Held in name of |
Whether promoter, director or their relative or employee |
Period held – indicate range, where appropriate |
Reason for not being held in name of company |
| LAND (PLOT 129/130 ASHWINI & DARSHAN) VAPI |
8,68,250/- |
Haria Exports Limited |
No |
NA |
Refer note c.1 below |
| PLOT (VAPI) |
4,34,201/- |
Haria Exports Limited |
No |
NA |
Refer note c.1 below |
C.1. Haria Apparels Ltd was formed on demerging of the Garment division of Haria
Exports Ltd. Company is in the process of getting the title deed transferred in the name
of the company
d. The Company has not revalued any of its property, plant and equipment (including
Right-of-use assets) or Intangible assets or both during the year.
e. There are no proceedings initiated or pending against the Company for holding any
benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules
made thereunder.
ii. Inventory: a. As informed to us, the inventory, has been physically verified
by the management during the year. In our opinion, the frequency of such verification is
reasonable. No material discrepancies were noticed on such physical verification as
compared to the books records.
b. Company does not have any working capital facility in excess of Rs 5 crores.
Accordingly, the provision of this clause of the Order is not applicable to the Company.
iii. Loans, Guarantees, Security and Investment: a. The Company has provided
unsecured loans to its group companies covered in the register maintained under section
189 of the Act. Details are as follows:
| Particulars |
Amount |
| Aggregate amount granted /provided during the year- Related parties |
36,00,000/- |
| Balance outstanding as at balance sheet date in respect of above cases- Related
parties |
8,01,40,726/- |
b. The investments made, guarantees provided, security given and the terms and
conditions of the grant of all loans and advances in the nature of loans and guarantees
provided are not prejudicial to the companys interest.
c. The Company has not stipulated any repayment schedule of principal and interest, but
company is receiving yearly interest.
d. There is no overdue amount for more than more than 90 days in respect of loan given.
e. There is no loan given falling due during the year, which has been renewed or
extended or fresh loans given to settle the overdue of existing loans given to the same
party.
f. The Company has given loans to its related party without specifying any terms or
period of repayment, details are as follows:
| Particulars |
Amount |
% |
| Aggregate amount granted /provided during the year |
|
|
| - Related parties other than promoter |
26,00,000/- |
72.22% |
| - Promoters |
10,00,000/- |
27.78% |
| Balance outstanding as at balance sheet date in respect of above cases |
|
|
| - Related parties other than promoter |
7,91,40,726/- |
98.74% |
| - Promoters |
10,00,000/- |
1.26% |
iv. Loans and Investment to Directors:
The Company has in respect of unsecured loans, complied with the provisions of section
185 and 186 of the Act.
v. Public Deposit:
The Company has not accepted any deposits from the public within the meaning of the
directives issued by the Reserve Bank of India, provisions of section 73 to 76 of the Act,
any other relevant provisions of the Act and the relevant rules framed thereunder.
vi. Cost Records:
The Central Government of India has not prescribed the maintenance of cost records
under sub-section (1) of section 148 of the Act for any of the activities of the company
and accordingly paragraph 3 (vi) of the order is not applicable.
vii. Statutory dues:
a. According to the information and explanations given to us and on the basis of our
examination of the records of the Company, amounts deducted/ accrued in the books of
account in respect of undisputed statutory dues including income-tax, GST, duty of
customs, cess and other material statutory dues have been regularly deposited during the
year by the Company with the appropriate authorities except for TDS where there has been
considerable delays in number of cases.
b. According to the information and explanations given to us, no undisputed amounts
payable in respect of income tax, GST, duty of customs, cess, professional tax and other
material statutory dues were in arrears as at 31 March 2023 for a period of more than six
months from the date they became payable.
According to the information and explanations given to us and the records of the
company examined by us, there are no statutory dues which are not paid on account of any
dispute.
viii. Previously Unrecorded Income:
The Company has not surrendered or disclosed any transactions, previously unrecorded as
income in the books of account, in the tax assessments under the Income-tax Act, 1961 as
income during the year.
ix. Defaulter Company: a. The Company has not defaulted in repayment of its loans
or borrowings or in the payment of interest thereon to any lender.
b. The Company has not been declared a wilful defaulter by any bank or financial
institution or government or government authority.
c. The Company has not taken any term loan therefore, Clause 3(ix)(c) of the order is
not applicable.
d. We report that no funds have been raised on short-term basis by the Company during
the year. Accordingly, clause 3(ix)(d) of the Order is not applicable
e. 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 as defined under the Companies
Act, 2013. Accordingly, clause 3(ix)(e) of the Order is not applicable.
f. We report that the Company has not raised loans during the year on the pledge of
securities held in its subsidiaries as defined under the Companies Act, 2013. Accordingly,
clause 3(ix)(f) of the Order is not applicable.
x. Utilization of issue proceeds: a. The Company has not raised any moneys by way
of initial public offer, further public offer (including debt instruments) or term loans
during the year. Accordingly, paragraph 3(x)(a) of the Order is not applicable to the
Company.
b. The Company has not made any preferential allotment or private placement of shares
or fully or partly convertible debentures during the year. Accordingly, clause 3(x)(b) of
the Order is not applicable.
xi. Fraud: a. According to the information and explanations given to us, no
material fraud by the Company or on the Company by its officers or employees has been
noticed or reported during the course of our audit.
b. According to the information and explanations given to us, no report under
sub-section (12) of Section 143 of the Companies Act, 2013 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. We have not received any whistle blower complaints against the company.
xii. Nidhi Company:
In our opinion and according to the information and explanations given to us, the
Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not
applicable.
xiii. Related Party Disclosure:
Transactions with the related parties are in compliance with sections 177 and 188 of
the Act where applicable and details of such transactions have been disclosed in the
financial statements as required by the applicable Indian Accounting Standards.
xiv. Internal Audit
a. Based on information and explanations provided to us and our audit procedures, in
our opinion, the Company has an internal audit system commensurate with the size and
nature of its business.
b. We have considered the internal audit reports of the Company issued till date for
the period under audit.
xv. Non-Cash Transaction:
The Company has not entered into non-cash transactions with directors or persons
connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi. Registration under RBI Act
The Company is not required to be registered under section 45-IA of the Reserve Bank of
India Act 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the
Company.
xvii. Cash Losses:
The Company has not incurred cash losses in the current year as well as in previous
year.
xviii. Auditor Resignation:
There has been no resignation of the statutory auditors during the year. Accordingly,
clause 3(xviii) of the Order is not applicable.
xix. Going Concern:
According to the information and explanations given to us and on the basis of the
financial ratios, ageing and expected dates of realisation of financial assets and payment
of financial liabilities, other information accompanying the standalone financial
statements, our knowledge of the plans of the Board of Directors and management and based
on our examination of the evidence supporting the assumptions, nothing has come to our
attention, which causes us to believe that any material uncertainty exists as on the date
of the audit report that Company is not 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.
xx. CSR Spent:
The company is not liable for spending amount under CSR under sub-section (5) of
Section 135 of the Companies Act, 2013 pursuant to any project. Accordingly, clauses 3(xx)
of the Order are not applicable.
xxi. Qualified CARO in Group Companys Financial Statements:
The company has no subsidiary companies. Accordingly, clause 3(xxi) of the Order is not
applicable.
For RAK CHAMPS & CO LLP.
Chartered Accountants
Firm Registration No. 131094W
RAMANATHA SHETTY
PARTNER
M. No. 218600
UDIN: 23218600BGQJTI7004
Place: MUMBAI
Date: 30/05/2023
ANNEXURE - B TO THE AUDITORS REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act")
Opinion
We have audited the internal financial controls over financial reporting of Haria
Apparels Limited ("the Company") as of 31st March 2023 in conjunction
with our audit of the Ind AS financial statements of the Company for the year ended on
that date.
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at 31st March 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.
Managements Responsibility for Internal Financial Controls
The Companys management and the Board of Director are responsible for establishing and
maintaining internal financial controls based on the internal financial controls with
reference to financial statements 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 the
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 have 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 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 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
misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls with reference to Financial Statements
A companys internal financial controls with reference to financial statements 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 controls
with reference to financial statements include 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 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.
Chartered Accountants
Firm Registration No. 131094W
RAMANATHA SHETTY
PARTNER
M. No. 218600
UDIN: 23218600BGQJTI7004
Place: MUMBAI
Date: 30/05/2023
+91-9892691696
