The members of
SHREE WORSTEX LIMITED
Report on the Audit of Financial Statements I
We have audited the accompanying financial statements of SHREE WORSTEX LIMITED ("the'
Company") which comprise the balance sheet as at 31st March 2020 thestatement of profit and loss statement of changes in equity and the statement of cashflows for the year then ended and notes to the financial statements including a summaryof significant accounting policies and other explanatory information.
In our opinion and to the best of our information and explanations given to us theaforesaid financial statements give the information required by the Companies 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 of the state ofaffairs of the Company as at 31st March 2020 and the net loss (includingother I comprehensive income) changes in equity and its cash flows for the year ended onthat date.
Basis for Opinion I
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 further described inthe '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 (ICAI) together with ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the rules thereunder and we havefulfilled our ethical I responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidences we have obtained are sufficient andappropriate to provide a basis for our opinion. 1
Key Audit Matters 1
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context Iof our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described hereunder to . be key audit matters to becommunicated in our report.
|s. No. Key audit matters ||Auditor's response |
|1. Loans and advances: - ||Our audit procedure inter- alia includes the following: - |
|In current year Indian Accounting Standards under Division III of Schedule III of the Companies Act 2013 have become applicable upon the Company with transition effect from 1st April 2018. ||1. We evaluated the control environment including authorization sanctioning and disbursement of significant loans advanced during the year. |
|Due to this all the loans whether given or obtained are to be disclosed at Amortised Cost using Effective Interest Method prescribed under Ind AS 109 on 'Financial Instruments'. ||2. We have obtained external confirmations from third parties in respect of transactions and closing balance for significant loans advanced by the company. |
|We focused on the conditions of disbursement and appropriateness of sanctioning process of the loan granted by the Company. ||3. We tested all material entries recorded in connection with the loan advanced and interest thereon to determine whether the accounting was appropriate. |
|2. Compliance of RBI directions and circulars: ||Our audit procedure inter- alia includes the following: - |
|The recent RBI regulations increased the responsibility of auditors of NBFCs. ||We have reviewed the conditions for prudential norms prescribed by the RBI including: - |
|As Company is an NBFC it is responsibility of Company to duly follow the directions and circulars. ||a) Provision on standard assets. |
|We focused on the requisite compliance and disclosure as per the requirements in the norms. ||b) Transfer of 20% profit to reserve maintain under section 45-IC of the RBI Act. |
| ||c) Holding of at least 50% of the financial assets and 50% of the financial income respectively. |
| ||d) Maintaining minimum Net Owned Fund of Rs. 200 Lakhs. |
Information other than the Financial Statements and Auditor's Report thereon I
The Company's Board of Directors is responsible for the preparation of the otherinformation. The .other information comprises the information included in the ManagementDiscussion and Analysis
Board's Report including Annexure to Board's Report Business Responsibility ReportCorporate .
Governance and Shareholder's Information but does not include the financial statementsand the auditor's report thereon.
Our opinion on the financial statement 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 is materiallyinconsistent with the financial statements or our knowledge obtained during the course ofour audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this I other information; we are required to report that fact. We havenothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements I
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 financial statements that givea true and fair view of the financial position financial performance changes in equityand cash flows of the Company in accordance with the AS and the other accountingprinciples generally accepted in India. 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 accounting policies; makingjudgments and .estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that are operating effectively forinsuring the accuracy and completeness of I the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatements whether due to fraud or error. *
In the financial statements management is responsible for assessing the Company'sability 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 is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain a reasonable assurance about whether the financialstatements as a whole I are free from material misstatement whether due to fraud orerror and to issue our report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an 1 audit conducted inaccordance with SAs will always detect a material misstatement when it exists. I
Misstatements can arise due to fraud or error and are considered material ifindividually or in aggregate they could reasonably be expected to influence the economicdecisions of users taken on the I basis of these financial statements.
As part of an audit in accordance with the SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also: .
(i) Identify and assess the risks of material misstatement of the financial statementswhether Idue to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion.
The risk of not detecting a material misstatement resulting from fraud is higher thanone Iresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control. I
(ii) Obtain an understanding of the internal controls 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.
(iii) Evaluate the appropriateness of accounting policies used and the reasonablenessofaccounting estimates and related disclosures made by management.
(iv) Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant 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 upto the date of our auditor'sreport. However future .events or conditions may cause the Company to cease to continueas a going concern.
(v) Evaluate the overall presentation structure and content of the financialstatementsincluding the disclosures and whether the financial statements represent theunderlying *transactions and events in a manner that achieves fair presentation.IMateriality is the magnitude of misstatements in the financial statement individually orin aggregate Imakes it probable that the economic decision of reasonable knowledgeableuser of the financial istatement may be influenced. I
We consider quantitative materiality and qualitative factors in (i) Planning the scopeof our audit work and in evaluating the results of our work; and (ii) to evaluate theeffect of any identified misstatements I in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope 1 and timing of the audit and significant audit findingsincluding any significant deficiencies in internal I controls that we identify during ouraudit.
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 reasonable be thought to bear on ourindependence and where applicable relevant safeguards. .
From the matters communicated with those charged with governance we determine thosematters that Iwere 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 aboutthe matter or when or when in extremely rare Icircumstances we determine that a mattershould not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
We draw your attention to Note 29 of the financial statement which explains theuncertainties and I management's assessment of the financial impact due to the lockdown/restrictions related to COVID-19 pandemic imposed by the Government for which definitiveassessment of the impact is dependent upon the future economic conditions. Our opinion isnot modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ('the Order') asamended issued by the Central Government of India in terms of sub-section (11) of section143 of the Act we give in the Annexure A a statement on the matters specified inparagraphs 3 and 4 of the .order to the extent applicable.
2. The Company is a Non-Banking Financial Company not accepting public deposits andholding certificate of Registration No. 14.00233 dated 31/07/2000 from Reserve Bank ofIndia has I been issued to the Company.
a) The Board of Directors has passed resolution for the non-acceptance of any publicdeposits.
b) The Company has not accepted any public deposits during the relevant year.
c) The Company has complied with the prudential norms relating to income recognitionaccounting standards assets classification and previously for bad and doubtful debts asapplicable to it.
3. 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 1
as it appears from our examination of those books;
c. the Balance Sheet the Statement of Profit and Loss Statement of Changes in Equityand the I
Cash Flow Statement dealt with by this report are in agreement with the books ofaccount;
d. In our opinion the aforesaid financial statements comply with the accountingstandards specified under Section 133 of the Act; .
e. On the basis of the written representations received from the directors as on 31stMarch 2020 I taken on record by the Board of Directors none of the directors isdisqualified as on 31stMarch2020 from being appointed as a director interms 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 refer to our separate Reportin
Annexure B. Our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over financialreporting.
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 ofour I information and according to the explanations given to us:
i. The Company has disclosed the impact if any of pending litigations on its financialIposition in its financial statements (Refer Note 28 of the financial statements). 1
ii. The Company did not have any long-term contracts including derivative contracts forIwhich there were any material foreseeable losses. I
iii. The Company is not required to transfer any amount to the Investor Education and .
FOR V.N. PUROHIT & CO. I
Firm Regn. No. 304040E ^
O.P. Pareek I
Membership No. 014238 I
UDIN: - 20014238AAAACR3134 I
New Delhi the 30th day of June 2020
ANNEXURE- A TO THE AUDITOR'S REPORT 1
The Annexure referred to in Paragraph 1 under the heading of "Report on otherLegal and Regulatory
Requirements" of our report of even date to the members of SHREE WORSTEXLIMITED for the year ended on 31st March 2020.
(i) As per information and explanation given to us the company does not have any fixedassets during the period covered by this report thus the provisions of sub-clause (i) ofparagraph 3 are .not applicable;
(ii) As per information and explanation given to us physical verification of inventoryconsisting of equity shares has been conducted once in a year by the management and nomaterial discrepancies were noticed during the course of physical verification; I
(iii) According to information and explanation given to us the Company has grantedunsecured loans to another Company covered in register maintained under section 189 of theCompanies Act 2013;
(a) According to the information and explanations given to us unsecured loans havebeen granted by the Company. The terms and conditions of the granting of such loans arenot Iprima facie prejudicial to the Company's interest;
(b) According to the information and explanations given to us the unsecured loans arerepayable on demand and receipt of principal and interest thereupon are regular as perstipulation; (c) According to the information and explanation given to us no amount isoverdue in respect of unsecured loan so granted as per stipulation.
(iv) According to information and explanations given to us the Company has compliedwith the provisions of section 185 and section 186 of the Companies Act 2013 to theextent applicable in .respect of loans advances guarantees and securities so given;
(v) According to information and explanations given to us the Company has not acceptedpublic deposits and the provision of section 73 to 76 or other relevant provisions of theCompanies Act *2013 and rules framed thereunder are not applicable to the Company;
(vi) According to information and explanations given to us the Company is not liableto maintain cost
records as prescribed under section 148(1) of the Companies Act 2013;
(vii) (a) According to information and explanations given to us the company isgenerally regular in depositing undisputed statutory dues including income-tax and anyother applicable statutory I dues to the appropriate authorities and there are nooutstanding statutory dues as on the last day of the financial year concerned for a periodof more than six months from the date they became payable;
(b) According to information and explanation given to us there are no outstandingstatutory dues on the 1 part of the Company which is not deposited on accountof any dispute.
(viii) According to information and explanations given to us the company has notobtained any loans and borrowings from any financial institution bank government ordebenture holders thus there arises no question of default in repayment; .
(ix) According to information and explanations given to us the Company has not raisedmoney by way .of initial public offer or further public offer. The Company has not takenany term loans fromany bank or financial institution;
(x) According to information and explanations given to us there is no noticed orunreported fraud on or by the Company during the year under audit;
(xi) According to information and explanations given to us the Company has not paidany managerial remuneration to managing director/ whole time director/ manager and thusthe provisions of this sub-clause are not applicable to the Company;
(xii) As per information the Company is not a Nidhi Company hence provisions of sub-clause (xii) of the Paragraph 3 of the Order are not applicable;
(xiii) According to information and explanations given to us all transactions with therelated partiesare in compliance with sections 177 and 188 of Companies Act 2013 whereverapplicable and the details have been disclosed in the financial statements etc. asrequired by the applicable accounting standards;
(xiv) According to information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year; .
(xv) According to information and explanations given to us the Company has not enteredinto non- .cash transactions with directors or persons connected with him;
(xvi) According to information and explanations given to us the Company is a Non-Banking Financial
Company and registered under Section 45-IA of the Reserve Bank of India Act 1934. *
Signed for the purpose of identification
FOR V.N. PUROHIT & CO.
Firm Regn. No. 304040E
Membership No. 014238
UDIN: - 20014238AAAACR3134
New Delhi the 30th day of June 2020
ANNEXURE- B TO THE AUDITOR'S REPORT '
Report on the Internal Financial Controls under Clause (i) of Sub- section (3) ofSection 143 of the Companies Act 2013 I
We have audited the internal financial controls over financial reporting of SHREEWORSTEX LIMITED .
as on 31st March 2020 in conjunction with our audit of the financialstatements of the Company for the
year ended on that date. .
Management's Responsibility for the Internal Financial Controls I
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reportingcriteria established by the Company considering
the essential components of internal controls stated in the Guidance Note on Audit ofInternal Financial
Control over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (ICAI).
These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of fraud and errors the accuracyand completeness of accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013. I
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 theStandards on Auditing Iissued by ICAI and deemed to be prescribed under Section 143(10)of the Companies Act 2013 to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal
Financial Controls and both issued by the ICAI. Those Standards and the Guidance Noterequire that . we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and .maintained and if such controls operatedeffectively in all material aspects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control system over financial reporting and their operatingeffectiveness. Our audit of internal *financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidences we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting. I
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 Istatements for external purposes in accordance with generallyaccepted accounting principles.
Company's internal financial control over financial reporting includes those policiesand 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 the receipt and expenditures of the Company are being only in accordancewith authorizations of management and directors of the Company; and I
(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 could not bedetected. Also projections of any evaluation of the internal financial control overfinancial reporting to future periods are subject to the risk that the internal financialcontrols over financial reporting may became inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material aspects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating .effectively as at 31st March 2020based on "the internal financial controls over financial reporting criteriaconsidering 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". ^
FOR V.N. PUROHIT & CO.
Firm Regn. No. 304040E
Membership No. 014238
UDIN: - 20014238AAAACR3134
New Delhi the 30th day of June 2020