We have audited the accompanying Standalone financial statements of Beardsell Limited(the Company) which comprise the Balance sheet as at March 31 2021 theStatement of Profit and Loss including the statement of Other Comprehensive Income theCash Flow Statement and the Statement of Changes in Equity for the year then ended andnotes to the Standalone financial statements including a summary of significantaccounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone financial statements give the information requiredby the Companies Act 2013 as amended (the Act) in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2021 its loss includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.
Basis for Opinion
We conducted our audit of the Standalone financial statements in accordance with theStandards on Auditing (SAs) as specified under Section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements' section of ourreport. 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 ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the Standalone financial statements.
Emphasis of Matter
We draw attention to Note 2.2 of the Standalone financial statements which describesthe continuing impact of Covid-19 pandemic and its possible consequential implicationsif any on the Company's operations and the carrying value of its assets as at March 312021. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone financial statements for the financial yearended March 31 2021. These matters were addressed in the context of our audit of theStandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the Standalone financial statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Standalone financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying Standalone financial statements.
|Key audit matters ||How our audit addressed the key audit matter |
|Appropriateness of timing of Revenue recognition (as described in Note 2.3.h of the Standalone Ind AS financial statements) ||In order to address the risk of misstatement related to timing of revenue recognition our audit response included the following: |
|The Company has revenue from sale of products from multiple locations geographically spread across India and it currently has a decentralized accounting system. Revenue is recognized based on the accounting policies disclosed in the note 2.3.h to the Standalone financial statements. ||We read and assessed that the accounting policy for recognition of revenue is in compliance with Ind AS 115 |
|As part of our overall response to the risk of fraud when identifying and assessing the risks of material misstatement due to fraud we evaluate the revenue transactions that might give rise to potential fraud risks. Bonus payouts for employees are determined based various metrices including the financial performance of each location. ||We understood the Company's revenue process across all product segments in each location to gain an understanding of revenue recognition process including the design and implementation of controls to address the relevant risks in relation to revenue recognition and tested the operating effectiveness of these controls. |
|Hence we consider there to be a risk of misstatement of the financial statements related to transactions occurring close to the year end as such transactions could be recorded in the incorrect financial year. In view of the above discussed matters appropriateness of timing of revenue recognition has been considered as a key audit matter. ||We read on a sample basis the terms of the Company's contracts with customers to determine the timing of transfer of control and the timing of revenue recognition in respect of such contracts and performing sample tests of individual sales transactions with purchase orders / contracts issued by customers and sales invoices raised by the Company. |
| ||We performed analytical review procedures to identify any unusual trends close to year end to decide the nature and extent of our testing at each location. |
| ||We performed location-wise testing for sales made near the reporting date including considerations due to closure of operations on account of COVID-19 to assess whether the revenue was recognized in the appropriate period with reference to shipping records sales invoices etc. for sample transactions. |
|Physical verification of Inventories (as described in Note 2.3.g of the Standalone Ind AS financial statements) ||Our audit response consisted of audit procedures includes the following: |
|Total Inventory of Rs 1245.03 lakhs which represents 11.19% of total assets of the Company as at March 31 2021. Inventory is held across 6 factories and 9 branches as at the reporting date. ||We understood the Company's process for establishing the existence of inventories including the design and implementation of monthly controls in relation to physical verification of inventories performed by management at various locations and tested the operating effectiveness of such controls. |
|Considering the number of locations and the level of inventory held across its factories and branches the criticality of inventory physical verification to the Company's financial reporting processes as well as the conducting of physical verification of inventory at these locations on different dates due to COVID-19 and consequential lockdown restrictions this is a significant area of audit importance. Accordingly the above issue has been considered as a key audit matter. || |
| ||We observed the physical verification of Inventory conducted by management in certain significant locations selected by us. Our procedures in this regard included |
| ||- Inquiring that the stock count instructions were sent by management to appropriate personnel in the relevant location and steps taken by management to ascertain the existence inventory on the date of the count (including identification of non-moving obsolete / damaged inventory); |
| ||- Performing independent inventory counts on sample basis and reconciling the same to the management counts; |
| ||- On a sample basis testing the reconciliation of the differences in inventory quantity between the physical count and the books of accounts including accounting of such variances basis management approval; and |
| ||- Performing roll-forward or roll-backward procedures on sample basis (as applicable) from date of count to the reporting date as the physical verification of inventory was undertaken by management on different dates across various locations during the year in line with the guidance issued by Institute of Chartered Accountants of India (ICAI) on key audit considerations amid COVID- 19. |
| ||We performed analytical reviews of purchases and inventory during the audit period to identify any unusual trends for further testing. |
| ||On a sample basis we performed tests of purchase and sales transactions made near the reporting date to assess whether transactions are recorded in the correct period by testing shipping records sales / purchase invoices (as applicable). |
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe Standalone financial statements and our auditor's report thereon.
Our opinion on the Standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone financial statements our responsibilityis to read the other information and in doing so consider whether such other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. When we read the if we concludethat there is a material misstatement there in we are required to communicate the matterto those charged with governance.
Responsibilities of Management for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the Standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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 auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the Standalone financialstatements including the disclosures and whether the Standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone financial statementsfor the financial year ended March 31 2021 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 (the Order)issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified inparagraphs 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 bestof 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 theCompany so far as it appears from our examination of those books;
(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid Standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;
(e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct;
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Standalone financial statements and theoperating effectiveness of such controls refer to our separate Report in Annexure2 to this report;
(g) In our opinion the managerial remuneration for the year ended March 31 2021 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofSection 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone financial statements Refer Note 49b to the Standalone financialstatements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. Following are the instances of delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
|Nature of amount ||Amount involved ||Due date ||Transfer date |
|Unclaimed dividend relating to financial year 2012-13 ||218132 ||December 31 2020 ||June 30 2021 |
Annexure 1 referred to under paragraph 1 of the Report on Other Legal and RegulatoryRequirements of the Auditors' Report
Re: Beardsell Limited ('the Company')
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment and investmentproperty.
(b) All property plant and equipment have not been physically verified by themanagement during the year but there is a regular programme of verification which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are pledged withthe bank and not available with the Company. The same has been independently confirmed bythe bank.
(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to usthere are no loans and securities given in respect of which provisions of section 185 and186 of the Companies Act 2013 are applicable and hence not commented upon. In our opinionand according to the information and explanations given to us provisions of section 186of the Act in respect of investments made and guarantee given have been complied with bythe company.
(v) In respect of deposits accepted in our opinion and according to the informationand explanations given to us directives issued by the Reserve Bank of India and theprovisions of section 73 to 76 or any other relevant provisions of the Companies Act2013 and the rules framed there under to the extent applicable have been complied withexcept for delay in filing return of public deposits with registrar as required under rule16 of the Companies (Acceptance of Deposits) Rules 2014 (as amended). We are informed bythe management that no order has been passed by the Company Law Board National CompanyLaw Tribunal Reserve Bank of India or any Court or any other Tribunal.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the manufacture of Plastics andPolymers and are of the opinion that prima facie the specified accounts and records havebeen made and maintained. We have not however made a detailed examination of the same.
(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund income-tax cess and other statutorydues although there have been slight delays in few cases in respect of provident fund.With respect to the undisputed goods and services tax employees' state insurance andincome tax the dues have not been regularly deposited with appropriate authorities andthere have been serious delays in large number of cases.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax goods andservices tax cess and other statutory dues were outstanding at the year end for aperiod of more than six months from the date they became payable.
(c) According to the records of the Company the dues of income-tax sales-tax servicetax duty of custom duty of excise value added tax and cess on account of any disputeare as follows:
|Name of the ||Nature of ||Amount ||Period to which ||Forum where |
|Statute Sales Tax Acts of various States ||Dues Sales Tax ||(Rs. in lakhs)* 15.01 ||the amount relates 1995-96 2000-01 2001-02 2003-04 2015-16. ||Dispute is pending Deputy Commissioner Assistant Commissioner and other appellate authorities |
|Central Sales Tax Act 1956 ||Central Sales Tax ||536.01 ||1995-96 2003-04 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2016-17 ||High Court Deputy Commissioner and Commercial Tax Officer of various states |
* Net of Rs.1.92 Lakhs sales tax and Rs.58.15 lakhs central sales tax paid underprotest.
(viii) In our opinion and according to information and explanations given by themanagement the Company has not defaulted in repayment of dues to a bank during the year.The Company did not have any outstanding loans or borrowing dues in respect of a financialinstitution or to government or dues to debenture holders during the year.
(ix) In our opinion and according to the information and explanations given by themanagement and audit procedures performed by us the Company has utilized the moniesraised by way of term loans for the purposes for which they were raised. According to theinformation and explanations given by the management the Company has not raised any moneyway of initial public offer / further public offer / debt instruments.
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or on the company by theofficers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013.
(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with sections 177 and 188 of
Companies Act 2013 where applicable and the details have been disclosed in the notesto the financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.
(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.
(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of BeardsellLimited (the Company) as of March 31 2021 in conjunction with our audit ofthe 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these standalone financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the Guidance Note)and the Standards on Auditing as specified under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls and both issuedby the Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these standalone financial statements was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting with reference to thesestandalone financial statements and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting with reference to these standalonefinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the standalone financial statementswhether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls over financialreporting with reference to these standalone financial statements.
Meaning of Internal Financial Controls Over Financial Reporting with reference to theseStandalone Financial Statements
A company's internal financial control over financial reporting with reference to thesestandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of standalonefinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financial reportingwith reference to these standalone financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting withreference to these Standalone Financial Statements
Because of the inherent limitations of internal financial controls over financialreporting with reference to these standalone financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these standalone financial statements to future periods are subject to the risk thatthe internal financial control over financial reporting with reference to these standalonefinancial statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting with reference to these standalonefinancial statements and such internal financial controls over financial reporting withreference to these standalone financial statements were operating effectively as at March31 2021 based on the internal control over financial reporting criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.
For S.R. Batliboi & Associates LLP
ICAI Firm Registration Number: 101049W/E300004
| ||per Aravind K |
| ||Partner |
|Place of Signature: Chennai ||Membership Number: 221268 |
|Date: June 30 2021 ||UDIN: 21221268AAAADV2631 |