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Simplex Mills Company Ltd.

BSE: 533018 Sector: Industrials
NSE: N.A. ISIN Code: INE457H01019
BSE 00:00 | 29 Nov 31.15 1.45
(4.88%)
OPEN

28.35

HIGH

31.15

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28.35

NSE 05:30 | 01 Jan Simplex Mills Company Ltd
OPEN 28.35
PREVIOUS CLOSE 29.70
VOLUME 108
52-Week high 57.30
52-Week low 24.80
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 28.35
CLOSE 29.70
VOLUME 108
52-Week high 57.30
52-Week low 24.80
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Simplex Mills Company Ltd. (SIMPLEXMILLS) - Auditors Report

Company auditors report

To the Members of Simplex Mills Company Limited

Report on the audit of the Standalone Financial Statements

Opinion

We have audited the accompanying financial statements of SimplexMills Company Limited (‘the Company') which comprise the Balance Sheet asat 31st March 2022 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under Section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended ("IndAS") and other accounting principles generally accepted in India of the state ofaffairs of the Company as at 31 March 2022 the profit and total comprehensive income /expense changes in equity 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) specified under section 143(10) of the Companies Act 2013 ("the Act").Our responsibilities under those Standards are further described in the‘Auditor's Responsibilities for the Audit of the Financial Statements'section of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.

Emphasis of Matter

We draw attention to the following matters in the Notes to thefinancial statements:

1. The Company has accumulated losses and its net worth has been fullyeroded. This situation along with other matters set forth in Note no. 28 indicate theexistence of an uncertainty that may cast doubt about the Company's ability tocontinue as a going concern. However the financial statements of the Company have beenprepared on a going concern basis for the reason stated in the said note.

2. Attention is drawn on Note no 1 (1(a)) of the Standalone financialstatements relating to impact of COVID 19 Pandemic on the Company. In the opinion of theManagement the said Pandemic is not likely to significantly impact the carrying amount ofloans receivables inventories and other assets. The impact of COVID-19 on theCompany's Financial Statements may differ from that estimated as at the date ofapproval of these financial statements.

Our opinion is not modified in respect of the aforesaid matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

We have determined that there are no key audit matters to communicatein our report.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report includingAnnexures to Board's Report Corporate Governance and Shareholder's Informationbut does not include the standalone financial statements and our auditor's reportthereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Management's Responsibility for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these standalone financial statements that give a true and fair view ofthe financial position financial performance (changes in equity) and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting 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. The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

Obtain an understanding of internal financial controlsrelevant to the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(I) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

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

Conclude on the appropriateness of management's use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content ofthe standalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements. Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by The Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act we give in the Annexure ‘A' a statement on thematters specified in Paragraphs 3 and 4 of the 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) in our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

(c) the Balance Sheet Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account;

(d) in our opinion the aforesaid financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act.

(e) on the basis of the written representations received from thedirectors as on 31st March 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2022` from being appointed as a director interms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and operative effectiveness of such controlsrefer to our separate report in Annexure ‘B'

(g) As per the information and explanation given and based on ourexamination Company has not paid any managerial remuneration to the Directors and hencereporting clause under section 197(16) of the Act is not applicable.

(h) with respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements Refer Note no. 27 to the financialstatements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.

iv. a) The management has represented that to the best of itsknowledge and belief as disclosed in note 39 to the accounts no funds have been advancedor loaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other persons or entities including foreignentities ("Intermediaries") with the understanding whether recorded in writingor otherwise that the Intermediary shall:

• directly or indirectly lend or invest in other persons orentities identified in any manner what so ever ("Ultimate Beneficiaries") by oron behalf of the Company or

• provide any guarantee security or the like on behalf of theUltimate Beneficiaries.

b) The management has represented that to the best of its knowledgeand belief as disclosed in note 39 to the accounts no funds have been received by theCompany from any persons or entities including foreign entities ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall:

• directly or indirectly lend or invest in other persons orentities identified in any manner what so ever ("Ultimate Beneficiaries") by oron behalf of the Funding Party or

• provide any guarantee security or the like on behalf of theUltimate Beneficiaries.

c) Based on such audit procedures as considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (iv) (a) and (iv) (b) contain anymaterial mis-statement.

v. The Company has not declared or paid any dividend during the year.

For K.M. Shah & Co.
Chartered Accountants
Firm's registration number: 109637W
Kantilal M. Shah
Proprietor
Membership number: 003857
Mumbai 14th May 2022
UDIN :22003857AIZQUC1367

Annexure ‘A' to the Independent Auditors' Report to themembers of the Company on the financial statements for the year ended 31st March 2022referred to in paragraph 1 under the heading "Report on Other Legal and RegulatoryRequirements" of our report of even date.

To the best of our information and according to the explanationsprovided to us by the Company and the books of account and records examined by us in thenormal course of audit we state that:

i. a. i. The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant and Equipment.

ii. The Company does not have any Intangible assets.

b. The Property Plant and Equipment have been physically verified bythe management at reasonable intervals and as per information and explanation given thediscrepancies noticed on physical verification as compared to book records maintainedwere not material and have been properly dealt with in the books of account.

c. Based on the audit procedure performed and according to the recordsof the company title deeds of all the immovable properties are held in the name of thecompany.

d. During the relevant year the company has not done revaluation ofits property plant and equipment (including Right of Use assets) or intangible assets orboth.

e. As per the information and explanations given to us as on the dateof balance sheet no proceedings have been initiated or are pending against the Companyfor holding any benami property under the Benami Transactions (Prohibition) Act 1988 (45of 1988) and rules made thereunder.

ii. a. As explained to us management conducted physical verificationof stocks of finished goods and waste at reasonable intervals during the year as also asat the balance sheet date. In our opinion and according to the information andexplanations given to us the coverage and procedure of such verification by themanagement is appropriate. On the basis of our examination of records of inventory we areof the opinion that the discrepancies noticed on verification between the physical stocksand book records were not 10% or more in the aggregate for each class of inventory andhave been properly dealt with in the books of accounts.

b. As per the information and explanations given to us the company hasnot been sanctioned working capital limits in excess of five crore rupees in aggregatefrom banks or financial institutions on the basis of security of current assets at anypoint of time during the year.

iii. During the year the Company has not made investments in orprovided any guarantee or security to Companies firms LLPs or any other parties.However the company has granted unsecured loans or advances to Companies firms LLPs orany other parties.

a. During the year the company has provided the following loans oradvances in the nature of loans:

i. Subsidiaries Joint ventures and associates

Particulars (Rs in '000)
Loans or advances -
Aggregate amount during the year(Net of repayment received) -
Balance outstanding as on 31.03.2022 -

ii. Parties other than Subsidiaries Joint ventures and associates

Particulars (Rs in '000)
Loans or advances -
Aggregate amount during the year (Net of repayment received) 520.00
Balance outstanding as on 21275.00
31.03.2022

b. In our opinion the terms and conditions on which the Company hasgiven loans are not prima facie prejudicial to the interest of the Company.

c. The schedule of repayment of principal and payment of interest hasnot been stipulated by the Company and hence we are unable to make any comment on theregularity of repayment of principal and payment of interest.

d. The repayment terms are ‘On demand' and hence there is nooverdue amount of principal and interest.

e. During the year no renewals or fresh loans have been granted tosettle any overdue loans of existing parties.

f. The aggregate loans and advances repayable on demand outstanding ason the Balance Sheet date amounts to Rs 21275.00 thousands which comprises 100% of theloans and advances given. Of the said amount the aggregate loans and advances repayableon demand by related parties amounts to Rs 8210.00 thousands.

iv. In our opinion and according to the information and explanationgiven to us the Company has complied with the provisions of Section 185 and 186 of theAct.

v. In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposit or amounts which are deemed to bedeposits. Hence reporting under clause 3(v) of the Order is not applicable.

vi. As per information and explanation given to us by the managementthe provisions for maintenance of the cost records under Section 148(1) of the Act are notapplicable to the Company as there is no manufacturing activity during the year underreview.

vii. a. According to the information and explanations given to us theCompany was regular during the year in depositing undisputed statutory dues includingProvident Fund Income tax Sales tax Customs duty Goods and Service Tax and Excise dutywith the appropriate authorities. According to the information and explanation given tous as at the balance sheet date the Company has no undisputed statutory dues of amaterial nature which remained unpaid for a period exceeding six months from the date onwhich they were payable.

b. According to the information and explanation given to us as at thebalance sheet date the Company has not deposited dues of excise duty aggregating to10246.25 thousands on account of the following disputes pending before authorities:

Excise Duty

Period to which dues relate Pending before (Rs in '000)
1984-85 and 1995 to 1996 Assistant Commissioner 4913.70
1981-84 CESTAT 5.29
1981 to 1984 High Court 5327.26
Total 10246.25

viii. As information and explanation given to us by the managementthere are no transactions of surrendered or disclosed income in the Income Tax Assessmentsduring the year which are unrecorded in the books of accounts maintained by the Company.

ix. a. The Company has not taken any loans or other borrowings from anylender. Hence reporting under clause 3(ix)(a) of the Order is not applicable.

b. The Company has not been declared willful defaulter by any bank orfinancial institution or government or any government authority.

c. The Company has not taken any term loan during the year and thereare no outstanding term loans at the beginning of the year and hence reporting underclause 3(ix) (c) of the Order is not applicable.

d. On an overall examination of the financial statements of theCompany funds raised on short term basis have prima facie not been used during the yearfor long-term purposes by the Company.

e. On an overall examination of the financial statements of theCompany the Company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiaries.

f. The Company has not raised any loans during the year and hencereporting on clause 3(ix)(f) of the Order is not applicable.

x. a. The Company has not raised moneys by way of initial public offeror further public offer (including debt instruments) during the year and hence reportingunder clause 3(x)(a) of the Order is not applicable.

b. During the year the Company has not made any preferential allotmentor private placement of shares or convertible debentures (fully or partly or optionally)and hence reporting under clause 3(x)(b) of the Order is not applicable.

xi. a. No fraud by the Company and no material fraud on the Company hasbeen noticed or reported during the year.

b. No report under sub-section (12) of section 143 of the Companies Acthas been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors)Rules 2014 with the Central Government during the year and upto the date of this report.

c. We have taken into consideration the whistle blower complaints ifany received by the Company during the year (and upto the date of this report) whiledetermining the nature timing and extent of our audit procedures.

xii. The Company is not a Nidhi Company and hence reporting underclause (xii) of the Order is not applicable.

xiii. In our opinion the Company is in compliance with Section 177 and188 of the Companies Act 2013 with respect to applicable transactions with the relatedparties and the details of related party transactions have been disclosed in thestandalone financial statements as required by the applicable accounting standards.

xiv. a. In our opinion the Company has an adequate internal auditsystem commensurate with the size and the nature of its business.

b. We have considered the internal audit reports for the year underaudit issued to the Company during the year and till date in determining the naturetiming and extent of our audit procedures.

xv. In our opinion during the year the Company has not entered into anynon-cash transactions with its Directors or persons connected with its directors and henceprovisions of section 192 of the Companies Act 2013 are not applicable to the Company.

xvi. In our opinion the Company is not required to be registered undersection 45-1A of the Reserve Bank of India Act 1934. Hence reporting under clause3(xvi)(a) (b) and (c) of the Order is not applicable.

xvii. The Company has not incurred cash losses during the financialyear covered by our audit and the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors of theCompany during the year.

xix. On the basis of financial ratios ageing and expected dates ofrealization of financial assets and payment of financial liabilities other informationbased on our examination of the evidence supporting the assumption we are of the opinionthat there exists material uncertainty as on the date of Audit report and the company isnot capable of meeting its liabilities existing as on the date of Audit Report indicatingthat Company is not capable of meeting its liabilities existing as on the Balance sheetdate as and when they fall due within a period of one year from the Balance sheet date.

xx. a. The provisions of clause 3(xx) (a) are not applicable to theCompany.

b. The provisions of clause 3(xx) (b) are not applicable to the companysince there is no amount unspent under sec 135(5) of the Companies Act.

For K.M. Shah & Co.
Chartered Accountants
Firm's registration number: 109637W
Kantilal M. Shah
Proprietor
Membership number: 003857
Mumbai 14th May 2022
UDIN :22003857AIZQUC1367

Annexure ‘B' to the Independent Auditors' Report of theeven date.

The Annexure referred to in our Independent Auditors' Report tothe members of the Company on the financial statements for the year ended 31st March 2022we report that:

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section143 of the Companies Act 2013

We have audited the internal financial controls over financialreporting of Simplex Mills Company Limited (‘the Company') as of 31stMarch 2022 in conjunction with our audit of the financial statements of the Company forthe year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on "the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India". Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby The Institute of Chartered Accountants of India and deemed to be prescribed underSection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. 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 judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2)provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March 2022 basedon "the internal control over financial reporting criteria established by the Companyconsidering 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 K.M. Shah & Co.
Chartered Accountants
Firm's registration number: 109637W
Kantilal M. Shah
Proprietor
Membership number: 003857
Mumbai 14th May 2022
UDIN :22003857AIZQUC1367

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