To The Members of Simmonds Marshall Limited Opinion
We have audited the standalone financial statements of Simmonds Marshall Limited("the Company") which comprise of Balance Sheet as at 31st March 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and notes tothe financial statements including a summary of significant accounting policies and otherexplanatory 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 Companies Act 2013 (the Act) in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2019 and profits changes in equity andits 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 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 opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgement 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 |
|1. Information Technology (IT) Systems and Controls |
During the year the Company has implemented SAP a new Enterprise Resource Planning (ERP) System. The new system is fully integrated financial accounting and reporting system.
The implementation of ERP has a risk of loss of integrity of key financial data being migrated and elimination of traditional controls without replacing them with the new effective controls measures monitoring of IT controls which are relating to critical business processes such as purchase production sales inventory and including recording of transactions which could lead to financial errors or mis-statements and inaccurate financial reporting and also there is risk that automated accounting procedures and related IT manual controls might not work.
We have accordingly designated this as a focus area in the audit.
|Audit procedures performed: |
We have performed procedures to ensure the migration of financial data between old system and new system. Our audit approach consisted testing of design and operating effectiveness of internal controls and substantive testing around the new ERP system. We also performed sufficient test of details as a part of our audit.
We have performed the test of details for areas where the Management has implemented manual controls during the year including the continuing manual controls as at the year end.
We have performed the test of controls regarding the appropriateness of system access and an effective maker and checker system built in the ERP system for proper authorizations of transactions and posting of accounting entries.
The combination of these tests of controls and procedures performed gave us a sufficient evidence to enable us to rely on the operations of ERP system for the purpose of the audit of the financial statements.
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 CorporateGovernance report and Shareholder's information but does not include the standalonefinancial 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 materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this 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; makingjudgements 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 and Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative 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 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 standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional 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 anyidentified 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 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
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 specified inparagraphs 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 2019 taken on records by the Board of Directors none of the directors aredisqualified 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 "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 and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the 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.- 32 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 required to be transferred tothe Investor Education and Protection Fund by the Company.
For LODHA & COMPANY
Chartered Accountants Firm registration No. - 301051E
R. P. Baradiya
28th May 2019 Membership No. 44101
ANNEXURE REFERRED TO IN PARAGRAPH "REPORT ON OTHER LEGAL AND REGUALTORYREQUIREMENTS" OF OUR
REPORT TO THE MEMBERS OF "THE COMPANY"FOR THE YEAR ENDED 31ST MARCH 2019
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 property plant and equipment (fixed assets) areverified in a phased manner over a period of three years. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain property plant andequipment (fixed assets) were physically verified by the management during the year.According to the information and explanations given to us no material discrepancies werenoticed on such verification
c) Based on the information and explanations given to us there are no immovableproperties owned by the Company. Accordingly the provisions of clause 1(iii) of the Orderare not applicable to the Company.
2. The inventory has been physically verified by the management at reasonable intervalsduring the year. As per the information and explanations given to us discrepanciesnoticed on physical verification between the physical stocks and book records were notmaterial.
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. During the year the Company has not granted any loans made any investmentprovided guarantees or securities covered under Section 185 and 186 of the Act.Accordingly the provisions of clause 3(iv) of the Order are not applicable to theCompany.
5. No deposits have been accepted by the Company within the meaning of directivesissued by RBI (Reserve Bank of India) and Sections 73 to 76 or any other relevantprovisions of the Act and Rules framed there under.
6. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 prescribed by the Central Government underSection 148(1) (d) of the Act and are of the opinion that prima facie the prescribedaccounts and cost records have been maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.
7. a) According to the information and explanations given to us and on the basis of ourexamination of the records
the Company is generally regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income- tax sales-tax goods and service taxservice tax duty of customs duty of excise value added tax cess and other statutorydues applicable to the Company with appropriate authorities. No undisputed amounts payablein respect of the aforesaid statutory dues were outstanding as at the last day of thefinancial year for 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 taxservice tax duty of customs duty of excise value added tax which have not beendeposited on account of any dispute except those mentioned in the table below:
|Name of the statute ||Nature of dues ||Period to which it relates ||Amount (' in lakhs) ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income Tax ||AY 2013-14 ||7.51 ||CIT (Appeal) |
|The Central Sales Tax 1956 ||Central Sales Tax ||FY 2012-13 ||53.54 ||Joint Commissioner of Sales Tax |
|The Central Sales Tax 1956 ||Central Sales Tax ||FY 2014-15 ||4.6 ||Deputy Commissioner of Sales Tax |
8. The Company has not defaulted in repayment of loans or borrowings to banksfinancial institutions during the year. Further the Company has not taken any loans orborrowings from debenture holder and Government during the year.
9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) during the year or in the recent past. Based on theinformation and explanations given to us by the management term loans were applied forthe purpose for which the loans were obtained.
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 ourexamination of the records the Company has paid/provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V of 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 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 all transactions with therelated party are in compliance with Section 177 and 188 of the Act and the details havebeen disclosed as required by the applicable Ind AS (Refer Note no 39 to the standalonefinancial statements).
14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year. Therefore the provisions ofclause 3(xiv) of the Order are not applicable to the Company.
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. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
For LODHA & COMPANY
Firm registration No. - 301051E
R. P. Baradiya
28th May 2019 Membership No. 44101
We have audited the internal financial controls over financial reporting of SimmondsMarshall Limited ("the Company") as of 31 st March 2019 in conjunction with ouraudit of the Standalone Financial Statements of the Company for the year ended on thatdate. 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.
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 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 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 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 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 LODHA & COMPANY
Chartered Accountants Firm registration No. - 301051E
R. P. Baradiya
28th May 2019 Membership No. 44101