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Signet Industries Ltd.

BSE: 512131 Sector: Others
NSE: SIGIND ISIN Code: INE529F01035
BSE 00:00 | 21 Jun 51.45 4.65
(9.94%)
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45.85

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51.45

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45.00

NSE 00:00 | 21 Jun 50.95 4.60
(9.92%)
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46.30

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50.95

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OPEN 45.85
PREVIOUS CLOSE 46.80
VOLUME 67844
52-Week high 59.90
52-Week low 17.05
P/E 17.93
Mkt Cap.(Rs cr) 151
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 45.85
CLOSE 46.80
VOLUME 67844
52-Week high 59.90
52-Week low 17.05
P/E 17.93
Mkt Cap.(Rs cr) 151
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Signet Industries Ltd. (SIGIND) - Auditors Report

Company auditors report

To

The Members of Signet Industries Limited

Report on the Financial Statements

Opinion

We have audited the financial statements of Signet Industries Limited ("theCompany") which comprise the balance sheet as at 31st March 2020 and the statementof Profit and Loss (including other comprehensive income) statement of changes in equityand statement of cash flows for the year then ended and notes to the financial statementsincluding a summary 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 financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with accountingprinciples generally accepted in India of the state of affairs of the company as at 31stMarch 2020 and its profit (including other comprehensive income) the changes in equityand 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 thoseStandards are further described in the Auditor's 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 fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to the note 53 of the financial statements year ending 31st March2020 which describes the impact of the outbreak of COVID 19 pandemic on the businessoperations of the company. In view of the highly uncertain economic environment adefinitive assessment of the impact on the subsequent period is highly dependent oncircumstances as they evolve.

Our report is not modified in respect of this matter.

Key Audit Matters

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 of 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.

Key Audit Matters Auditor's Response
Adoption of Ind AS 116 - Leases Our audit procedures on adoption of Ind AS 116 include:
The Company has adopted Ind AS 116 which is effective from April 1 2019 and applied the standard to its leases using Modified Retrospective Approach. • Assessed the Company's procedure and evaluation on the identification of leases. It was based on the contractual agreements and our knowledge of the business. We have also considered and evaluate the reasonableness of the discount rates applied in determining the lease liabilities;
Accordingly the Company has not restated comparative information instead the cumulative effect of initial applicable standard has been recognised as an adjustment to the opening balance ofretained earnings as on April 12019. • Assessed and tested controls in respect of the lease accounting standard (Ind AS 116);
Ind AS 116 introduces a new lease accounting model wherein lessees are required to recognize a right-of-use (ROU) asset and a lease liability arising from a lease on the balance sheet. The lease liabilities are initially measured by discounting future lease payments during the lease term as per the contract / arrangement. - Evaluated the method of transition and related adjustments as at 1 April 2019:
Adoption of the standard involves significant judgments and estimates including determination of the discount rates and the lease term. - Tested completeness of the lease by reconciling the Company's operating lease commitments to computing ROU asset and the lease liabilities.
• On a statistical sample we performed the following procedures:
- assessed the key terms and conditions of each lease with the underlying lease contracts; and
- evaluated computation of lease liabilities and the key estimates such as discount rates and the lease term.
• Assessed and tested the presentation and disclosures relating to Ind AS 116 including disclosures relating to transition.
Evaluation of uncertain tax positions
The Company operates in multiple jurisdictions and is subject to periodic challenges by local tax authorities on a range of tax matters during the normal course of business including direct and indirect tax matters. Our audit procedures include the following substantive procedures:
These involve significant management judgment to determine the possible outcome of the uncertain tax positions consequently having an impact on related accounting and disclosures in the financial statements • Obtained understanding of key uncertain tax positions; and
• We along with our internal tax experts -
- Read and analysed select key correspondences external legal opinions / consultations by management for key uncertain tax positions;
- Discussed with appropriate senior management and evaluated management's underlying key assumptions in estimating the tax provisions; and
Assessed management's estimate of the possible outcome of the disputed cases

Information Other than the Financial Statements and Auditor's Report Thereon

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 Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the 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 during thecourse of our 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 other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the 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 financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the accounting Standardsspecified under section 133 ofthe 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 Responsibilities 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 influence 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 skepticism throughout the audit. We also:

a. Identify and assess the risks of material misstatement of the financial statementswhether due 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 ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

b. Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

c. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

d. 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 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 significant audit findings including anysignificant deficiencies 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 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

1. 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 statement on the matters specified in the paragraph 3and 4 ofthe Order to the extent applicable.

2. 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 purpose of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the Indian accountingstandards specified under section 133 of the act read with rules framed thereunder.

e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on records by the Board of Director none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of section164(2) ofthe 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 Rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to be best of our information and according to the explanations given tous:

i. The company has disclosed the impact of pending litigations on its financialposition in its financial statement - refer note 37 to the financial statement;

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

iii. The company is required to transfer Rs. 198966 to the Investor Education andProtection Fund up to 25 th February 2020 but not transferred till the year end.

With respect to the matter to be included in the Auditors' Report under Section 197(16)of the Act In our opinion and according to the information and explanations given to usthe remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 read with Schedule V to the Act.

For SMAK & Co.
Chartered Accountants
(Firm Reg. No. 020120C)
CA Atishay Khasgiwala
Partner
Date: 15.07.2020 M. No. 417866
Place: Indore
UDIN : 20417866AAAABM2012

Annexure A to Independent Auditor's Report

Referred to in paragraph (1) under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date to the members of SignetIndustries Limited on the financial statements for the year ended March 31 2020.

i. In respect of its Fixed Assets :

a. The Company is maintaining 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 and no material discrepancies havebeen 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. In respect of its Inventories:

The inventories has been physically verified by the Management during the year. In ouropinion the frequency of verification is reasonable and no material discrepancies werenoticed.

iii According to the information and explanations given to us the Company has notgranted loans secured or unsecured to company firms LLP or other parties covered in theregister maintained under section 189 of the Companies Act 2013. In our opinionprovisions of para 3 clause (iii) of the order are not applicable to the company.

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 with respectto the loans and investments made. The company has not given any guarantee or provided anysecurity in terms of section 185 and 186 of the Act.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from the public within the meaning of Section 73 to 76or any other relevant provisions of the Companies Act 2013 and the Rules framed thereunder. As informed to us no Order has been passed by the Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

vi. We have broadly reviewed the cost records maintained by the Company pursuant to therules made by the Central Government under sub-section (1) of Section 148 of the CompaniesAct 2013 and are of the opinion that prima facie the prescribed records have been madeand maintained. We have however not made a detailed examination of the cost records witha view to determine whether they are accurate or complete.

vii. In respect of Statutory dues :

a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues including provident fund employee's state insurance incometax goods and service tax duty of customs cess and any other statutory dues asapplicable with the appropriate authorities. There were no undisputed statutory dues inarrears as at 31st March 2020 for a period of more than six months from the date theybecame payable.

b) According to the information and explanations given to us the dues of sales taxvalue added tax income tax duties of excise duties of customs which have not beendeposited with appropriate authorities on account of any dispute are as follows :

Name of the Statute Nature of Liability Related Period ( Rs. In lacs) # Forum where dispute is pending
Income Tax Act 1961 Income Tax 2006- 07 2007- 08 2009-10 and 2011-12 225.22 High Court
Income Tax Act 1961 Income Tax 2013-14 & 2016-17 78.84 Commissioner (Appeal)
M.P. Value Added Tax Act 2002 Sales Tax 2008-09 2.19 Additional Comm. (Appeal)
Madhya Pradesh Value Added Tax Act 2002 Sales Tax 2015-16 39.65 Additional Commissioner Commercial Tax (Appeal)
Madhya Pradesh Value Added Tax Act 2002 Sales Tax 2016-17 26.62 Additional Commissioner Commercial Tax (Appeal)
Custom & Central Excise & Service Tax Custom Duty 2014-16 66.18 Custom & Central Excise & Service Tax (Appealate Tribunal)

# Net of Rs. 115.10 lacs deposited

viii. According to the records of the company examined by us and as per the informationand explanations given to us the Company has not defaulted in repayment of dues tofinancial institution bank or government as on the balance sheet date. The Company hasnot issued any debenture.

Further in view of the extension of time granted vide a circular of Reserve Bank ofIndia (RBI) RBI/2019- 20/186 dated March 27 2020 and RBI/2019-20/244 dated May 23 2020for the payment of interest and principal for term loans falling due between March 1 2020and May 31 2020 which is further extended to August 31st 2020 the Company has availedthe moratorium for payment of the aforesaid dues on term loans outstanding to SVC Bank Ltdas at the year end. Accordingly interest of Rs. 16.35 lacs and Principal of Rs. 120.22lacs is deferred by bank.

ix In our opinion and according to the information and explanations given to us thecompany has not raised money by way of initial public offer or further public offer(including debt instruments) and In our opinion and according to the information andexplanations given to us the term loans obtained during the year have been applied forthe purpose for which they were obtained.

x. According to the information and explanations given to

us and to the best of our knowledge no material fraud by the Company or on the companyby the officers or employees has been noticed or reported during the year.

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 information and explanation given to us thecompany is not a Nidhi Company therefore the provision of para 3 (xii) of the Order isnot applicable to the company.

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 given 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 therefore the provision of para 3 (xiv) of the Order is not applicable to thecompany.

xv. In our opinion and according to the information and explanations given to us thecompany has not entered into any non-cash transactions with directors or persons connectedwith him during the year hence the provision of para 3 (xv) of the Order is notapplicable to the company.

xvi. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 therefore the provision of para 3 (xvi) of the Order is notapplicable to the company for the year under audit.

For SMAK & Co.
Chartered Accountants
(Firm Reg. No. 020120C)
CA Atishay Khasgiwala
Partner
Date: 15.07.2020 M. No. 417866
Place: Indore
UDIN : 20417866AAAABM2012

Annexure B To the Independent Auditor's Report of even date on the Financial Statementsof Signet Industries Limited

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 SignetIndustries Limited ("the Company") as of March 31 2020 in conjunction with ouraudit of the financial statements of the Company for the 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require 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 respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls 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 overfinancial 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition ofthecompany'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.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2020 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For SMAK & Co.
Chartered Accountants
(Firm Reg. No. 020120C)
CA Atishay Khasgiwala
Date: 15.07.2020 Partner
Place: Indore M. No. 417866
UDIN : 20417866AAAABM2012