) issued by Institute of CharteredAccountants of India and the Standards on Auditing prescribed under section 143(10) of theCompanies Act 2013 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.
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 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 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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
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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2018 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
ANNEXURE B TO THE AUDITORS' REPORT
Referred to in paragraph 2 under the heading 'Report on Other Legal & RegulatoryRequirement' section of our report to the members of Sheetal Cool Products Limited of evendate we report that:
(i) In respect of fixed Assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets
(b) The Company has a program of verification to cover all the items of fixed assets ina phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanation given to us no material discrepancies were noticed on such verification.
(c) According to 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.
(ii) (a) The Management has conducted the physical verification of inventory atreasonable intervals.
(b) The discrepancies noticed on physical verification of the inventory as compared tobooks records which has been properly dealt with in the books of account were notmaterial.
(iii) According to the information and explanation given to us the Company has grantedUnsecured loans to one of the Promoter Shareholder covered in the register maintainedunder section 189 of the Companies Act 2013 in respect of which:
(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the company's interest.
(b) The schedule of repayment of principal and payment of interest has been stipulatedand repayment or receipts of principal amounts and interest have been regular as perstipulations.
(c) There is no overdue amount remaining outstanding as at the year end.
(iv) 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 in respect ofgrant of loans making investments and providing guarantees and securities as applicable
(v) The Company has not accepted deposits during the year therefore the provisions ofthe clause 3 (V) of the order are not applicable to the company.
(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act in respect of the activities carried on by the Company. Thusreporting under clause 3(vi) of the order is not applicable to the company.
(vii) According to the information and explanations given to us In respect ofstatutory dues
(a) The company has generally been regular in depositing undisputed statutory duesincluding provident fund income-tax sales tax value added tax duty of customs Goodsand service Tax service tax cess and other material statutory dues applicable to it withthe appropriate authorities.
(b) There are no undisputed amounts payable in respect of provident fund income taxsales tax value added tax duty of customs goods and service tax service tax cess andother material statutory dues were in arrears as at 31 March 2018 for a period of morethan six months from the date they became payable.
(c) According to the information and explanations given to us there are no materialdues of duty of Income Tax sales tax service tax duty of customs duty of excise valueadded Tax Goods and service tax outstanding on account of any dispute.
(viii) The company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued any debentures. Hence reporting under clause3(viii) of the order is not applicable to the company.
(ix) In our opinion and according to the information and explanation given by themanagement we report that monies raised by way of initial public offer in the nature ofequity shares and terms loans were applied for the purposes for which those were raised.
(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations give 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 and hence reporting under clause 3 (xiv) of the order is not applicable to thecompany.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.