The Members of
Orosil Smiths India Limited
Report on the Audit of Financial statements
We have audited the accompanying financial statements of Orosil Smiths India Limited("the Company") which comprises the Balance Sheet as at 31st March 2019the Statement of Profit and Loss (including Other Comprehensive Income) and cash flowstatement and the statement of change of Equity for the year then ended and notes to thefinancial statements including a summary of signi icant accounting policies and otherexplanatory information.
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 theCompany Act 2013 (the 'Act') in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India including IndianAccounting Standards ('Ind AS') speci ied under Section 133 of the Act of the state of aairs (financial position) of the Company as at 31st March 2019 and Loss (financialperformance including other comprehensive income) its cash flows and the changes inequity for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) speci iedunder section 143(10) of the Company's Act 2013. Our responsibilities under thoseStandards are further described in the Auditors Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have ful illed our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is suf icient and appropriate to provide a basis for our opinion.
Information other than the Financial Statements and Auditor's Report thereon
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 financial statements and our auditor's report thereon.
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.
Responsibility of Management and those charged with Governance for the FinancialStatements
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 state of a airs(financial position) pro it or loss (financial performance including other comprehensiveincome) change in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Ind AS speci ied under section 133of the Act. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the
Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating e ectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements the Board of Directors are 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 Responsibility 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 in luence 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 skepticim throughout the audit. We also:
a. 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 suf icient 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.
b. 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operating eectiveness of such controls.
c. Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
d. Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast signi icant 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.
e. 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 signi icant audit _indings including any signiicant de iciencies 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 signi icance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's 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 bene its of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under Section 197 read with Schedule V to the Act.
2. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the Annexure "A a statement on thematters speci ied in paragraphs 3 and 4 of the Order to the extent applicable.
3. As required by Section 143(3) of the Act we report that:
We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit.
a. 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.
b. 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.
c. In our opinion the aforesaid financial statements comply with the IndianAccounting Standards (Ind AS) speci ied under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014.
d. On the basis of the written representations received from the directors as on31st March 2019 taken on record by the Board of Directors none of the directors isdisquali ied as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.
e. With respect to the adequacy of the internal financial controls over financialreporting (IFCoFR) of the Company as on 31 March 2019 in conjunction with our audit offinancial statement of the for the year ended on that date and on the operating eectiveness of such controls refer to our separate Report in "Annexure B".
f. 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 litigation which may impact itsfinancial position in its financial statements.
ii. The Company has made provision as required under the applicable law or Ind-ASfor the material foreseeable losses if any any long-term contract including derivativecontracts
iii. There has no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended 31 March 2019.
Annexure - A to the Independent Auditors' Report
Referred to in paragraph under "Report on Other Legal and Regulatory Requirementsof our report of even date to the members of Orosil Smiths India Limited on theaccounts of the company for the year ended 31st March 2019.
On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:
1. In respect of Property Plant and Equipment
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. The Company has a regular program of physical veri ication of its fixedassets by which fixed assets are veri ied in a phased manner during the year. Inaccordance with this program all fixed assets were veri ied during the year and nomaterial discrepancies were noticed on such veri ication. In our opinion this periodicityof physical veri ication is reasonable having regard to the size of the Company and thenature of its assets.
c. According to the information and explanations given to us and on the basis ofour examination of the records of the Company the company has held any immovableproperties in the name of the Company.
2. In respect of Inventories
The physical veri ication of inventory has been conducted at reasonable intervals bythe management during the year. The discrepancies noticed on physical veri ication ofinventory as compared to book records were not material and have been appropriately dealtwith in the books of accounts.
3. In respect of Loans given by the company
According to the information and explanations given to us the Company has not grantedloans secured and unsecured to companies firms limited liability partnerships or otherparties in the register maintained under section 189 of the Companies Act 2013 ("theAct ) therefore reporting under paragraph 3(iii) is not applicable.
4. In respect of Loans to Directors and Investments made by the Company
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 Act with respectto the loans and investments made.
5. In respect of Deposits
In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public to which the directives issued bythe Reserve Bank of India and the provisions of Section 73 to Section 76 or any otherrelevant provisions of the Act and the rules framed thereunder apply. Thus paragraph 3(v)of the Order is not applicable to the Company.
6. In respect of maintenance of Cost Records
The Central Government has not prescribed the maintenance of cost records undersub-section (1) of section 148 of the Act for any of the company's products. Thusparagraph 3(vi) of the order is not applicable.
7. In respect of Statutory Dues
a. According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income-taxgoods and service taxes cess and other material statutory dues have been regularlydeposited during the year by the Company with the appropriate authorities
b. According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax and other material statutory dues werein arrears as at 31st March 2019 for a period of more than six months from the date theybecame payable. c. According to the information and explanations given to us thereare no material dues of provident fund income-tax and other material statutory dueswhich have not been deposited with the appropriate authorities on account of any dispute.
8. In respect of Repayment of Loan
According to the records of the company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingto any financial institution or bank or Government or dues to debenture holder as at thebalance sheet date.
9. In respect of utilization of IPO further public o er & term loans
According to the information and explanations given by management during the year thecompany has not raised money by way initial public o er or further public o er (includingdebt instrument) and term loans and money utilized for that purpose they raised. Thusthis clause not applicable.
10. In respect of Reporting of Fraud
On the basis of veri ication of records and according to the information andexplanations given to us no fraud by the Company or on the Company by its of icers oremployees has been noticed or reported during the course of our audit.
11. In respect of approval of Managerial Remuneration
Managerial remuneration has been paid and provided by the Company in accordance withthe requisite approvals mandated by the provision of Section 197 of the Act read withSchedule V to the Act.
12. In respect of reporting in a Nidhi Company
In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly reporting under paragraph 3(xii) of the Orderis not applicable.
13. In respect of Related Party Transactions
According to the information and explanations given to us and based on our examinationof the records of the Company transactions with the related parties have been enteredinto by the company in its ordinary course of business on an arm's length basis andtherefore the provisions of section 177 and 188 of the Act are not applicable to thecompany however the details of such transactions have been disclosed in the financialstatements as required under Accounting Standard (Ind AS) 24 related party disclosuresspeci ied under section 133 of the Act read with rule 7 of the Companies ( Accounts)Rules 2014.
14. In respect of reporting of Private placement / preferential allotment of shares /debentures
According to the records of Company the Company has not made preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review. Thus compliance with provisions of clause (xiv) of paragraph 3 of the Ordernot applicable.
15. In respect of reporting of Non-Cash Transactions
According to the information and explanations given to us and based on our examinationof the records of the Company the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly reporting under paragraph 3(xv) ofthe Order is not applicable
Annexure - B to the Independent Auditors' Report
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 OrosilSmiths India Limited as of 31st March 2019 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating e ectively as at 31st March2019 based on theinternal financial control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants 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 control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India ("ICAI). These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating e ectively for ensuring the orderly and eficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
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") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated e ectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operating eectiveness. 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 e ectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment 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 suf icient 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
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles.
A company's internal financial control over financial reporting includes those policiesand procedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly re lect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition use or disposition of the company's assets that could have a material e ecton the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
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.
In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting and such internal financial controls over financialreporting were operating e ectively as at 31 March 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the ICAI.
For PNG & Co.
Firm Registration No.: 021910N
Membership No.: 087257