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Safari Industries (India) Ltd.

BSE: 523025 Sector: Consumer
NSE: SAFARI ISIN Code: INE429E01023
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OPEN 765.80
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VOLUME 1024
52-Week high 841.25
52-Week low 350.10
P/E
Mkt Cap.(Rs cr) 1,677
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Safari Industries (India) Ltd. (SAFARI) - Auditors Report

Company auditors report

To

The Members

SAFARI INDUSTRIES (INDIA) LIMITED.

Opinion

We have audited the standalone financial statements of Safari Industries (India)Limited ("the Company") which comprise of Balance Sheet as at 31stMarch 2020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedand notes to the financial statements including a summary of significant accountingpolicies and other explanatory information. In our opinion and to the best of ourinformation and according to the explanations given to us the aforesaid standalonefinancial statements give the information required by the Companies Act 2013 (the Act) inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2020 and profits (including other comprehensive income) changes in equity and itscash 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 Standards 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 (ICAI) together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone financial statements.

Emphasis of Matter

We draw your attention to the Note 30(d) of the standalone financial statements withregard to Management's assessment of inter-alia realisibility of inventories of Rs.16003.38 lakhs and recoverability of trade receivables of Rs. 14766.93 lakhs due toCOVID 19 pandemic outbreak. The Management apart from considering the internal andexternal information up to the date of approval of these standalone financial statementsthe Company has also performed sensitivity analysis on the assumptions used and based oncurrent indicators of future economic conditions the Company expects to recover thecarrying amount of these assets.

The impact of the global health pandemic may be different from that estimated as at thedate of approval of these standalone financial statements. Considering the continuinguncertainties the Management will continue to closely monitor any material changes to infuture economic conditions as may pan out in future. Our report is not modified in respectof 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 of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Sr. No. Key Audit Matters Auditor's response
1. Inventory - existence and valuation Audit procedures performed:
As at March 31 2020 the Company held inventories of Rs. 16003.38 Lakhs. [Also refer Note no. 10 of the standalone financial statements] We have performed following alternative audit procedures over inventory existence and valuations.
Inventories existence and valuation was an audit focus area because of nationwide lockdown imposed by the Government of India in view of pandemic coronavirus (COVID 19). (a) Ensuring the effectiveness of the design imple- mentation and maintenance of controls over changes in inventory to determine whether the conduct of physical inventory verification at a date other than the date of the financial statement is appropriate and testing of those controls whether those have operated effectively.

 

As explained by the Management due to COVID 19 related restriction on account of nationwide lockdown physical verification of inventories of Rs. 6414 lakhs at certain locations as on the Balance sheet date couldn't be carried out by the Company. In view of the above the matter has been determined to be a key audit matter. (b) Performing procedures to ensure that the changes in inventory are properly recorded.
(c) Performing substantive analytical procedures to test the correctness of inventory existence and valuation
(d) Testing of accuracy of inventory reconciliations with the general ledgers at period end including test of reconciling items.
The procedures performed gave us a sufficient evidence to conclude about the inventory existence and valuation.
Reference is also invited to Opinion para of internal financial control report in Annexure "B"
2. Trade receivables-collectability and certainty Audit procedures performed:
As at March 31 2020 the Company held trade receivables of Rs. 14766.93 lakhs. [Also refer Note no. 11 of the standalone financial statements] We have performed following alternative audit procedures over trade receivables :
Trade receivables collectability and certainty was an audit focus area because of nationwide lockdown imposed by the Government of India in view of pandemic coronavirus (COVID 19). (a) Performing procedures to ensure that the changes in trade receivables between the last confirmation receipt and date of the Balance sheet are properly recorded (Roll forward procedures)
As explained by the Management due to COVID 19 related restriction on account of nationwide lockdown resulted in non receipt of direct confirma- tions and reconciliations from the customers. In view of the above the matter has been determined to be a key audit matter. (b) Performing substantive analytical procedures to test the correctness of receivables valuation
(c) Testing of accuracy of trade receivables reconcili- ations with the general ledgers during the year including test of reconciling items
(d) We obtained a list of long outstanding receivables and assessed the recoverability of these through inquiry with management.
The procedures performed gave us a sufficient evi- dence to conclude about the collectability and certainty of trade receivables.
Reference is also invited to Opinion para of internal finan- cial control over financial reporting report in Annexure "B"
3. Allowance for sales returns Audit procedures performed:
The Company sells its products through various chan- nels like retailers institutions modern trade etc. • Our audit approach consisted testing of design and operating effectiveness of internal controls and sub- stantive testing for sales returns.
The Company makes the allowance for sales returns based on the past experience in various channels and determines the quantum of allowance which requires significant estimation and judgment particularly in COVID 19 situation. We also performed sufficient test of details as a part of our audit.
In view of the above the matter has been determined to be a key audit matter. • Ensured the completeness of liability recognized by evaluating the actual returns in the past.
• We have also assessed the reasonableness of the estimates and judgment applied to determine the quantum of the allowance interalia considering the present COVID 19 situation.
The combination of these tests of controls and proce- dures performed gave us a sufficient evidence to rely on the assessment made by the management in respect of allowance for sales returns.

Information Other than the Standalone Financial Statements and Auditor's report thereon

The Company's Board of Directors is responsible for the preparation of otherinformation. The Other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to the Board report Businessresponsibility report Corporate Governance report and Shareholder's information but doesnot include the standalone financial statement 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 the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information; we required to report that fact. We have nothing to report inthis regard.

Management responsibilities 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) changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the accountingStandards specified under Section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The 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 can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.As part of an audit in accordance with SAs we exercise professional judgment and maintainprofessional 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 system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management.

• 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 significant doubt on the entity'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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work and (ii) to evaluate the effect of antidentified misstatements in the financial statements.

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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 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 benefits of such communication.

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 Act we give in the Annexure "A" a statement on the matters specifiedin paragraphs 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 and records.

(c) The Balance sheet the Statement of Profit & Loss (including othercomprehensive income) Statement of Changes in Equity and the Statement of Cash Flowsdealt 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 Rule 7 of theCompanies (Account) Rules 2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on records by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a Director in termsof 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 refer to ourseparate Report in Annexure "B".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Sec 197(16) of the Act as amended: In our opinion andto the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of Section 197 of the Act.

(h) With respect to the other matters to be included in the Auditor's report inaccordance with the Rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion and 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 standalone financial statements. Refer Note No. 34 to the standalonefinancial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts to be transferred to the InvestorEducation and Protection Fund by the Company.

For LODHA & CO.
Chartered Accountants
(Firm Regn. No. 301051E)
Mumbai R. P. Baradiya
Date : 04th June 2020 Partner
(Membership No. 044101)
UDIN 20044101AAAADC8830

ANNEXURE A

ANNEXURE REFERRED TO IN PARAGRAPH "REPORT ON OTHER LEGAL AND REGUALTORYREQUIREMENTS" OF OUR REPORT TO THE MEMBERS OF "THE COMPANY"FOR THE YEARENDED 31ST MARCH 2020

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 state that:

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment (fixed assets).

(b) The Company has a regular programme of physical verification of its property plantand equipment (fixed assets) by which all assets are verified in a phased manner over aperiod of three years. However due to COVID 19 related nationwide lockdown theManagement was not able to perform year end physical verification of fixed assets as perthe phased programme. According to the information and explanations given to usmanagement does not expect any material discrepancy as an when the physical verificationis carried out.

(c) Based on the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

2. The inventories have been physically verified by the management at reasonableintervals during the year. As per the information and explanations given to us nomaterial discrepancies were noticed on physical verification of inventories as compared tobook records. Due to COVID 19 related nationwide lockdown the Management was not able toperform year end physical verification of inventory aggregating to Rs. 6414 lakhs atcertain locations. According to the information and explanations given to us managementdoes not expect any material discrepancy as an when the physical verification is carriedout.

3. 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. Accordingly the provisions of clause 3(iii) of the Order are notapplicable to the Company.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 186 of the Act with respect to theinvestments made. The Company has not granted any loans provided guarantees and securityduring the year and therefore reporting of compliance of Section 185 of the Act doesn'tarise.

5. No deposits within the meaning of directives issued by RBI (Reserve Bank of India)and Sections 73 to 76 or any other relevant provisions of the Act and rules framed thereunder have been accepted by the Company.

6. According to the information and explanations given to us the Central Governmenthas not prescribed maintenance of cost records under clause (d) of sub-section (1) ofSection 148 of the Act in respect of Company's products. Accordingly the provisions ofclause 3(vi) of the Order are not applicable to the Company.

7. a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company is generally regular in depositingundisputed statutory dues including provident fund employees' state insurance income-tax goods and service tax service tax duty of customs and other statutory duesapplicable to the Company with appropriate authorities. No undisputed amounts in respectof the aforesaid statutory dues were outstanding as at the last day of the financial yearfor a period of more than six months from the date they became payable.

b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no dues of income tax sales taxgoods and service tax service tax duty of customs duty of excise and value added taxwhich have not been deposited on account of any dispute except the following:

Name of the Statute Nature of the dues Rs. in lakhs Period to which the amount relates Forum where dispute is pending
Uttar Pradesh Value Added Tax 2008 Value Added Tax 2.36 2014-15 Commercial Tax Dept. Uttar Pradesh
Uttar Pradesh Value Added Tax 2008/ Central Sales Tax Act 1956 Value Added Tax/ Central Sales Tax 1.32 2007-08 Commercial Tax Tribunal Uttar Pradesh
Kerala Value Added Tax Act 2003 Value Added Tax 4.65 2012-13 Deputy Commissioner appeal Kerala
Bihar Value Added Tax Act 2005 Value Added Tax 4.49 2013-14 Commissioner appeal Bihar

8. The Company has not defaulted in repayment of loans or borrowings to banks duringthe year. The Company has not taken any loans or borrowings from financial institutiongovernment and debenture holders during the year.

9. In our opinion and according to the information and explanations given to us theterm loans have been applied for the purpose for which they were raised. The Company hasnot raised any money by way of Initial public offer or further public offer (Includingdebt instrument) 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 fraud by or on the Company by its officers or employees noticed or reportedduring the year nor have we been informed of such case by the management.

11. According to the information and explanations given to us and based on examinationof records of the Company managerial remuneration has been paid or provided for duringthe year is in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore the provisions of clause 3(xii) of the Orderare not applicable to the Company.

13. During the course of our examination of the books of accounts and other records ofthe Company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us all transactions withthe related party are in compliance with Section 177 and 188 of the Act and the detailshave been disclosed as required by the applicable Ind AS in Note 37 to the StandaloneFinancial Statements.

14. The Company has not made preferential allotment or private placement of shares orfully or partly convertible debentures referred to in Section 42 of the Act during theyear. Therefore the provisions of clause 3(xiv) of the Order are not applicable to theCompany.

15. Based on the information and explanations given to us the Company has not enteredinto any non-cash transactions prescribed under Section 192 of the Act with directors orpersons connected with them during the year. 16. In our opinion the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

For LODHA & CO.
Chartered Accountants
(Firm Regn. No. 301051E)
Mumbai R. P. Baradiya
Date : 04th June 2020 Partner
(Membership No. 044101)
UDIN 20044101AAAADC8830

ANNEXURE B

Report on the Internal Financial Controls under Clause

(i) of sub-section 3 of Section 143 of the Act

We have audited the internal financial controls over financial reporting of SafariIndustries (India) Limited ("the Company") as of 31st March 2020in conjunction with our audit of the Standalone Financial Statements of the Company forthe 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 (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.

Auditors' Responsibility

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 deemed tobe prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe 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 Standalone financial statements whether due to fraud orerror.

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

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 financialreporting includes 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 authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 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.

Opinion

In our opinion the Company has broadly in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2020except certain year end controls related to inventory and receivables due to prevailingpandemic condition reference is also invited to Key audit Matters para in our mail auditreport based on "the internal control over financial reporting criteria establishedby the 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 LODHA & CO.
Chartered Accountants
(Firm Regn. No. 301051E)
Mumbai R. P. Baradiya
Date : 04th June 2020 Partner
(Membership No. 044101)
UDIN 20044101AAAADC8830

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