To the Members of M/s. Shree Manufacturing Company Limited Report on the standaloneFinancial Statements Opinion
We have audited the accompanying Standalone financial statements of M/s. ShreeManufacturing Company Limited ("the Company") which comprisesthe Balance Sheet as at March 31 2019 the Statement of Profit and Loss and statement ofcash flows for the year then ended and notes to the financial statements including asummary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2019 and profit/loss 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
Companies Act 2013. Our responsibilities under those Standards are further describedin the Auditor s
Responsibilities for the Audit of the Financial Statements section of our report. Weare independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India together with the ethical requirements thatare relevant to our audit of the financial statements under the provisions of theCompanies Act 2013 and the Rules there under 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.
Key Audit Matters
We draw the attention to the fact that the company is having accumulated loss of Rs 979Lakhs as at the year ended 31-03-2019 which is more than its net worth the company has tobe treated as sick as per the provision of SICA 1985. The company does not have anyparticular business and as the company has sold all its fixed assets and there are norevenue generated during the year along with other matters set out in the notes of thefinancial statements the substantial doubt arise whether the company will be able tocontinue as going concern.
Further 287000 12% Cumulative preference shares of Rs. 100 Each fully paid up wasredeemable in three equal installments during the year 2004-05 2005-06 and 2006-07. Butsame has not been redeemed till date.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effect of the matter described in the basis for qualifiedopinion paragraph the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India including the IndAS of the financial position of the Company as at 31 March 2019 and its financialperformance including its cash flows and the changes in equity for the year ended on thatdate.
Responsibility of Management for the Standalone 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate implementation and maintenance ofaccounting 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 statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
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.
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 high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. 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 financial statements.
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 of the Companies Act 2013 we givein the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Orderto 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 standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e. On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (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 A". i
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 opinion and to the best of ourinformation and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financialposition.
ii. The Company has not made provision as required under the applicable law oraccounting standards for material foreseeable liability on redemption of preferenceshares. Refer note 3 C
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company
For DPSY & Associates Chartered Accountants
Firm s registration number: 135764W
Membership number: 407205
Date: May 27 2019
Annexure - A to the Auditors' Report
The Annexure referred to in Independent Auditors Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2019 we report that:
I. As the Company does not hold any fixed assets for the year the requirement ofclause (i) of paragraph 3 of the order is not applicable to the company.
II. As the Company does not hold any inventories for the year the requirement ofclause (ii) of paragraph 3 of the order is not applicable to the company.
III. The company has not granted any loans secured or unsecured to/from companiesfirms or other parties covered in the register-maintained u/s 189 of the Act. The Companyhas not purchased any goods or fixed assets and affected any sales during the year thusrequirement of clause (iv) of the Order are not applicable to the Company.
IV. The company has not granted any loans secured or unsecured under section 185 madeany investment provided any guarantee or security. Hence the question of reporting underthe cause 3(iv) of the order does not arise.
V. In our opinion and according to the information and explanation given to us theCompany has compiled with the directives issued by the Reserve Bank of India and theprovision of section 73 to 76 or any other relevant provision of the Companies Act and therules framed there under to the extent applicable. We are informed by the Management thatno order has been passed by the Company Law Board or National Company Law Tribunal orReserve Bank of India or any court or any Tribunal in this regard.
VI. As informed to us the Central Government has not prescribed maintenance of CostRecords under subsection (1) of the section 48 of the Act.
VII. a. According to the information and explanation given to us and according torecords of the Company examined by us in our opinion the Company is generally regular indepositing with the appropriate authorities undisputed statutory dues including Providentfund employees state insurance income tax sales tax wealth tax customs duty exciseduty cess and other material statutory dues wherever applicable. According to theinformation and explanation given to us no undisputed amount payable in respect ofaforesaid dues were outstanding as at March 31 2019 for more than six months from thedate they became payable.
b According to the information and explanation given to us there are no disputedamounts payable in respect of Income tax Sales tax Wealth tax Customs duty Excise dutyand Cess outstanding as at the year end.
VIII. As per explanation given to us no fraud on or by the company has been noticedfor reported We have been informed that the Company has not defaulted in repayment of loanor borrowings to financial institution banks and Government The Company has not raisedany funds through debentures.
IX. The Company has not raised money by the way of initial public offer or furtherpublic offer (including debt instrument).
X. The Company has not raised money by the way of initial public offer or furtherpublic offer (including debt instrument).
XI. The managerial remuneration has been paid in accordance with the requisiteapprovals mandated by the provision of section 197 read with schedule V to the Act.
XII. The Company is not a chit fund or a Nidhi company. Hence the question ofreporting under clause 3(xii) of the order does not arise.
XIII. The Company has compiled with the provision of section 177 and 188 of the inrespect of transaction with the related parties and the details have been disclosed in theFinancial Statement etc as required by the applicable accounting standards.
XIV. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year.
XV. The Company has not entered into any non-cash transaction with directors or personconnected with him covered under the provision of section 192 of the Act.
XVI. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For DPSY & Associates
Firm s registration number: 135764W
Membership number: 407205
Date: May 27 2019
Annexure - B to the 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 ShreeManufacturing Company limited ("the Company") as of 31 March 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 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 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 standalone Ind AS financial statements whether due to fraudor 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 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 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 an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For DPSY & Associates
Firm s Registration Number: 135764W
Swati Sethia Partner
Membership Number: 407205
Date: May 27 2019