Marshall Machines Limited Ludhiana
1. We have audited the accompanying financial statements of M/s Marshall MachinesLimited("The Company") which comprise the Balance Sheet as at 31stMarch 2019 the Statement of Profit and Loss the cash flow statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.
2. Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial position financial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
3. Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based onour audit.
In conducting our audit We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on 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 the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India: i. In case of the Balance Sheet of State ofAffairs of the Company as at 31st March 2019 ii. In the case of theProfit and Loss Statement of the Profit of the Company for the year endedon that date iii. In the case of the Cash Flow Statement of the Cash Flowsforthe yearended on that date.
4. Report on Other Legal and Regulatory Requirements
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 Companies Act 2013 we give in Annexure-A a statement on the mattersspecified in paragraph 3 and 4 of the order to the 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 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 and the cash flow statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on31/03/2019 taken on record by the Board of Directors none of the directors isdisqualified as 31/03/2019 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 financialreporting of the Company and the operating effectiveness of such controls clause (i) ofsection 143(3) of Companies Act 2013 refer Annexure B of our report.
(g) 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 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts.
FOR S. SOOD & CO.
Firm Regn. No. : 010801N
Date: 30th May 2019
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
i. In respect of Fixed Assets
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) All the fixed assets have been physically verified during the year by theManagement. According to the information and explanation given to us no materialdiscrepancies were noticed on such verification.
c) As per the information & explanation given to us and the examination of recordsof the company the title deeds of immovable properties are held in the name of thecompany.
ii. In respect of Inventory
Physical Verification of Inventory has been conducted at reasonable intervals by themanagement of the company. The discrepancies noticed on verification between the physicalstocks and book records were not material and have been properly dealt with in the booksof accounts.
iii. Compliance under section 189 of The Companies Act 2013
The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Act.
Compliance under section 185 and 186 of The Companies Act 2013
In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013with respect to loans and investments made.
iv. Compliance under section 73 to 76 of The Companies Act 2013 and Rules framedthereunder while accepting Deposits
In our opinion and as per information available to us the company has not accepted anyDeposits within the meaning of provisions of section 73 to 76 of the Companies Act 2013and the rules framed thereunder.
v. Maintenance of cost records
We have broadly reviewed the books of accounts relating to materials labour and otheritems of cost maintained by the company pursuant to the Rules made by the CentralGovernment for the maintenance of cost records under subsection (1) of section 148 of theCompanies Act 2013 and we are of the opinion that prima-facie the prescribed accounts andrecords have been made and maintained. We have not made however a detailed examination ofthe record with a view to determine whether they are complete or accurate.
vi. Deposit of Statutory Dues
According to the information and explanations given to us in respect of statutorydues:
a) The Company is by and large regular in depositing with appropriate authoritiesundisputed statutory dues including Provident Fund Employees' State InsuranceIncome-tax Service Tax Cess and other material statutory dues applicable to it. TheCompany did not have dues in arrears as at 31st March 2019 for a period of morethan six months from the date they became payable except for Excise duty of Rs.11095619 /- which is outstanding for more than six months.
b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Service Tax Cess and other material statutory dues inarrears as at 31st March 2019 for a period of more than six months from thedate they became payable.
c) There are no dues of Income Tax and Service Tax which have not been deposited as on31st March 2019 on account of disputes.
vii. Repayment of Loans and Borrowings
In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to banks financialinstitutions or debenture holders.
viii. Utilization of Money Raised by Public Offers and Term Loan For which they Raised
During the year ended 31.03.2019 the Company has raised moneys by way of initialpublic offer (IPO) and has taken term loans from the financial Institutions during theyear. In our opinion and according to the information and explanations given to us thecompany has applied the amounts for their business for which they have been raised.
For the details of money raised through IPO and its utilization refer Part A(General Information) of Note 1: Significant Accounting Policies
ix. Reporting of Fraud During the Year
To the best of our knowledge and according to the information and explanations given tous no fraud by the Company and no material fraud on the Company by its officers oremployees has been noticed or reported during the year.
x. Managerial Remuneration
In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
xi. Compliance by Nidhi Company Regarding Net Owned Fund to Deposits Ratio
The Company is not a Nidhi Company and hence reporting under clause 3(xii) of the Orderis not applicable to the Company.
xii. Related party compliance with Section 177 and 188 of companies Act - 2013
Based on the explanations provided to us all transactions with the related parties arein compliance with section 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the Financial Statements etc. as required by theapplicable accounting standards.
xiii. Compliance under section 42 of Companies Act - 2013 regarding Private placementof Shares or Debentures
During the year the Company has made the preferential allotment and private placementof shares. In our Opinion & as per explanation given to us the company has compliedwith the requirements of Section 42 of the Companies Act 2013.
xiv. Compliance under section 192 of Companies Act - 2013
In our opinion and according to the information and explanations given to us duringthe year the Company has not entered into any non-cash transactions with its directors orpersons connected with them and hence provisions of section 192 of the Act are notapplicable.
xv. Requirement of Registration under 45-IA of Reserve Bank of India Act 1934
The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For S. Sood & Co.
(Firm Regn No. 010801N)
(Membership No. 089457)
Date: 30th May 2019
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 (f) under Report on Other Legal and RegulatoryRequirements' of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
1. We have audited the internal financial controls over financial reporting of M/sMarshall Machines Limited ("the Company") as of 31st March 2019 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 Act.
3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls
Over Financial Reporting (the "Guidance Note") issued by the Institute ofChartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing 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.
5. 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 systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
7. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
8. In our opinion to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2019 based on the internalcontrol over financial reporting 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.
For S. Sood & Co.
(Firm's Registration No.010801N)
(Membership No. 089457)
Date: 30th May 2019