To the Members of Brady & Morris Engineering Co. Limited
Report on the Audit of the Financial Statements
We have audited the financial statements of Brady & Morris Engineering Co. Limited("the Company") which comprise the balance sheet as at March 31 2020 and thestatement of profit and loss (including other comprehensive income) statement of changesin equity and statement of cash flows for the year then ended and notes to the financialstatements including a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "the financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics 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 opinion on the financial statements.
Emphasis of Matter
We draw attention to Note 46 of the standalone financial statements as regards to themanagement evaluation of COVID - 19 impacts on the future performance of the Company. Ouropinion 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 financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters:
We have determined that there are no key audit matters to be communicated in ourreport.
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information; weare required to report that fact. We have nothing to report in this regard.
Management's and Board of Directors' Responsibility for the Financial Statements
The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the state of affairs profit and other comprehensiveincome changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring accuracy and completenessof the accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements the Management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.
The Company's Management and Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these 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 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 todesign 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 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 reasonablenessof accounting estimates and related disclosures in the financial statements made by theManagement and Board of Directors.
Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
a) As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
b) 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 other comprehensiveincome) the statement of changes in equity and the statement of cash flows dealt with bythis Report are in agreement with the books of account;
d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder section 133 of the Act;
e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".
c) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
a) The Company has disclosed the impact of pending litigations as at March 31 2020 onits financial position in its financial statements - Refer note 38 to the financialstatements;
b) The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.
c) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
d) With respect to the matter to be included in the Auditors' Report under section197(16) of the Act:
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under section 197(16) of the Act whichare required to be commented upon by us.
| ||For S S Rathi & Co. |
| ||Chartered Accountants |
| ||Firm Registration No : 108726W |
| ||Brijesh Mathur |
| ||Partner |
| ||Membership No: (039565) |
| ||ICAI UDIN: 20039565AAAABC2318 |
|Mumbai || |
|July 09 2020 || |
Annexure "A" to the Independent Auditors' Report
The Annexure referred to in our report of even date to the members of Brady &Morris Engineering CO Limited on the financial statements for the year ended March 312020. We report that:
Based on the audit procedures performed for the purpose of reporting a true and fairview on the Financial Statements of the Company and taking into considerations theinformation and explanations given to us and the books of accounts and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) Some of the Fixed Assets were physically verified during the year by the managementin accordance with a phased programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. No materialdiscrepancies between the books records and physical inventory have been noticed.
(c) According to the records of the Company examined by us and the information andexplanations given to us the title deeds of immovable properties are held in the name ofthe company.
2. In our opinion physical verification of inventories has been conducted by themanagement at reasonable intervals. The discrepancies noticed on such verification by themanagement have been properly dealt with in the books of accounts.
3. In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the Register maintained under section189 of the Act. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of the Orderare not applicable to the Company and hence not commented upon.
4. In our opinion and according to the information and explanations given to us thecompany has not given any loans or made investments or issued any guarantee or providedany security covered under section 185 and 186 of the Act hence our comments on thecompliance are not given.
5. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits within the meaning of Sections 73 to 76 of the Actand the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordingly theprovisions of clause 3(v) of the Order are not applicable.
6. We have broadly reviewed the books of account maintained by the Company as specifiedunder Section 148(1) of the Act for maintenance of cost records in respect of productsmanufactured by the Company and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.
7. (a) According to the records of the Company the Company is generally regular indepositing with appropriate authorities undisputed statutory dues including ProvidentFund Employees' State Insurance Income-Tax Sales-Tax Service Tax Customs Duty ExciseDuty Value Added Tax Goods and Service Tax Cess and other material statutory duesapplicable to it though there has been a slight delay in a few cases. According to theinformation and explanations given to us there are no arrears of undisputed amountspayable in respect of above statutory dues which were outstanding as on the last day ofthe financial year for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us there are no cases ofnon-deposit appropriate authorities of disputed dues of income-tax sales-tax servicetax customs duty excise duty value added tax or cess except the following:
|Name of the statute ||Nature of dues ||Amount (in lakhs) ||Period to which the amount relates ||Forum where the dispute is pending |
|Central Sales Tax Act 1956 ||Central Sales tax ||3.22 ||2010-11 ||Before tribunal Ahmedabad |
|Central Sales Tax Act 1956 ||Central Sales tax ||2.64 ||2012-13 ||Before tribunal Ahmedabad |
|Central Sales Tax Act 1956 ||Central Sales tax ||23.90 ||2013-14 ||Before Commissioner Ahmedabad |
|Central ExciseAct 1944 ||Excise Duty ||11.26 ||2011-12 ||Before tribunal Ahmedabad |
|Central Excise Act 1944 ||Excise Duty ||2.31 ||2012-13 ||Before tribunal Ahmedabad |
|Income-tax Act 1961 ||Income Tax Demand ||1.99 ||2010-11 ||CPC |
|Income-tax Act 1961 ||Dividend Tax Demand ||11.53 ||2011-12 ||CPC |
8. According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loan or borrowingsto financial institutions and banks during the year. The company has not taken any loansfrom Government or by way of Issue of Debentures.
9. In our opinion on an overall basis and according to the information and explanationsgiven to us the term loans were applied for the purpose for which the same were obtained.The Company has not raised any money by way of Initial Public Offer or further publicoffer (including debt instruments) during the year.
10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeeshas been noticed or reported during the course of our audit.
11. According to the records of the Company examined by us and the information andexplanations given to us managerial remuneration has been paid / provided by the Companyin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.
12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company hence our comments as required under clause 3(xii) of theOrder are not given.
13. According to the information and explanations given to us and based on ourexamination of the records of the Company all transactions with the related parties arein compliance with sections 177 and 188 of Companies Act 2013 where ever applicable andthe details whereof have been stated in the Financial Statements etc. as required by theapplicable accounting standards.
14. According to the information and explanations given to us and based on ourexamination of the records of the Company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review.
15. According to the records of the Company examined by us and the information andexplanations given to us the Company has not entered into any non- cash transactionsreferred to in section 192 of the Act with directors of the Company or persons connectedwith them during the year.
16. According to the information and explanations given to us the Company is notrequired to be registered under section 45- IA of the Reserve Bank of India Act 1934.
| ||For S. S. Rathi & Co |
| ||Chartered Accountants |
| ||Firm Regn. No. 0108726W |
| ||Brijesh Mathur |
| ||Partner |
| ||M. No. 039565 |
|Place: Mumbai || |
|Date: July 09 2020 || |
Annexure "B" to the Independent Auditors' Report
The Annexure referred in our Report of even date to the members of Brady & MorrisEngineering Co Ltd on the financial statements for the year ended March 31 2020.
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 Brady &Morris Engineering Co Ltd ("the Company") as of March 31 2020 in conjunctionwith our audit of financial statements of the Company for the year ended on that date.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at March 31 2020 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").
Management's Responsibility for Internal Financial Controls:
The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (hereinafter referred to as"the Act").
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. 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 with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether 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 Company's internal financial controls withreference to financial statements.
Meaning of Internal Financial Controls over Financial Reporting:
A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that:
1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; 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 financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting:
Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
| ||For S. S. Rathi & Co |
| ||Chartered Accountants |
| ||Firm Regn. No. 0108726W |
| ||Brijesh Mathur |
|Place: Mumbai ||Partner |
|Date: July 09 2020 ||M. No. 039565 |