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Smart Finsec Ltd.

BSE: 539494 Sector: Financials
NSE: N.A. ISIN Code: INE766D01020
BSE 00:00 | 22 Oct 7.29 0.04
(0.55%)
OPEN

7.55

HIGH

7.55

LOW

6.89

NSE 05:30 | 01 Jan Smart Finsec Ltd
OPEN 7.55
PREVIOUS CLOSE 7.25
VOLUME 2754
52-Week high 10.06
52-Week low 5.10
P/E 11.76
Mkt Cap.(Rs cr) 22
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 7.55
CLOSE 7.25
VOLUME 2754
52-Week high 10.06
52-Week low 5.10
P/E 11.76
Mkt Cap.(Rs cr) 22
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Smart Finsec Ltd. (SMARTFINSEC) - Auditors Report

Company auditors report

TO THE MEMBERS OF SMART FINSEC LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone nancial statements of Smart Finsec Limited ("theCompany") which comprise the standalone balance sheet as at 31 March 2020 and thestandalone statement of pro t and loss (including other comprehensive income) standalonestatement of changes in equity and standalone statement of cash ows for the year thenended and notes to the standalone nancial statements including a summary of the signicant 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 the explanationsgiven to us the aforesaid standalone nancial statements give the information required bythe Companies Act 2013 (the "Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at 31 March 2020 and pro t and other comprehensiveincome changes in equity and its cash ows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) speci edunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India 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 ful lled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is suf cient and appropriate to provide abasis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsigni cance in our audit of the Standalone Financial Statements of the current year. Thesematters were addressed in the context of our audit of the Standalone Financial Statementsas a whole and in forming our opinion thereon and we do not provide a separate opinionon these matters.

Transition date accounting policies due to adoption of Ind-AS

Refer to the accounting policies in the Financial Statements: Signi cant AccountingPolicies- Basis of preparation and Notes.

Key audit matter description How the matter was addressed in our audit
Effective 1 April 2019 the Company adopted the Indian Accounting Standards ("Ind AS") noti ed by the Ministry of Corporate Affairs with the transition date of 1 April 2018. We performed the following key audit procedures:
The following are the major impact areas for the Company upon transition: Assessed the design implementation and operating effectiveness of key internal controls over management's evaluation of transition date choices and exemptions availed in line with the principles under Ind-AS 101.
Classi cation and measurement of nancial assets and nancial liabilities. Con rmed the approvals of Audit Committee for the choices and exemptions made by the Company for compliance/acceptability under Ind-AS 101.
The migration to the new accounting framework (Ind AS) is a complicated process involving multiple decision points upon transition. Ind AS 101 First Time Adoption prescribes choices and exemptions for rst time application of Ind AS principles at the transition date. Evaluated management's transition date choices and exemptions for compliance under Ind-AS 101.
We identi ed transition date accounting as a key audit matter because of signi cant degree of management judgment and application on the areas noted above. Assessed the methodology implemented by management to give impact on the transition.
Assessed the accuracy of the computations Assessed areas of signi cant estimates and management judgment in line with principles under Ind-AS.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the Standalone Financial Statements and our auditors'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 in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Standalone Financial Statements

The Company's management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these Standalone FinancialStatements that give a true and fair view of the state of affairs pro t and othercomprehensive income changes in equity and cash ows of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) speci ed under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgements and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal nancial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the Standalone Financial Statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's nancial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial 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. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to in uence the economic decisions of userstaken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the Standalone FinancialStatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is suf cient 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 to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal nancial controls with reference to Standalone Financial Statements inplace and the operating effectiveness of such controls.

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

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 signi cant 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 standalone nancial 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 Standalone FinancialStatements including the disclosures and whether the Standalone Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and signi cant audit ndings including any signicant de ciencies 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 in with those charged with governance we determine thosematters that were of most signi cance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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 bene ts 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 Section 143 (11) of the Act we givein the Annexure A a statement on the matters speci ed in paragraphs 3 and 4 of the Orderto the extent applicable.

(A) As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

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

(c) The standalone balance sheet the standalone statement of pro t and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash ows dealt with by this Report are in agreement with the booksof account.

(d) In our opinion the aforesaid Standalone Financial Statements comply with theIndian Accounting Standards speci ed under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors is disquali edas on 31 March 2020 from being appointed as a director in terms of Section 164(2) of theAct.

(f) With respect to the adequacy of the internal nancial controls over nancialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

(a) The Company does not have any pending litigations as at 31 March 2020 which wouldimpact its nancial position.

(b) The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.; and

(c) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

(C) With respect to the matter to be included in the Auditors' Report under Section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For H.K. Dua & Co. Chartered Accountants

ICAI Firm Registration Number: 000581N

per CA Harsh Kumar Dua Partner Membership Number 080727 Place: New Delhi Date: June 232020 UDIN:

Annexure 'A' to the Independent Auditors' Report

The annexure referred to our Independent Auditors' Report to the members of SmartFinsec Limited on the standalone nancial statements for the year ended 31.03.2020 wereport that:

On the basis of such checks as we considered appropriate and in terms of informationand explanations given to us we state that:-

(I) In respect of its xed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the xed assets.

(b) As explained to us xed assets have been physically veri ed by the managementduring the year in accordance with the phased programme of veri cation adopted by themanagement which in our opinion provides for physical veri cation of all the xed assetsat reasonable intervals. According to the information and explanations given to us nomaterial discrepancies were noticed on such veri cation.

(c) According to the information and explanations given to us and the records shownthe title deeds of immovable property owned by the company are in the name of companyonly.

(ii) In respect of its inventory:

a) As explained to us company is into the business of investing and trading in shares& Bonds and its inventory consist of Listed Shares. The inventory is veri edelectronically by the management during the year.

b) The procedures of electronic veri cation of inventories followed by the managementare reasonable and adequate in relation to the size of the company and the nature of itsbusiness.

c) The company is maintaining proper records of Inventory. No discrepancies werenoticed on such veri cation between the electronically maintained stocks and the bookrecords.

(iii) The company has granted secured loans during the ordinary course of its businessto a rm and to one other party covered in register maintained under section 189 of theCompanies Act 2013.

(a) In respect of aforesaid loans the terms and conditions under which such loans weregranted are not prejudicial to the interest of the Company.

(b) According to the information and explanations given to us the schedule ofrepayment of principal and payment of interest has been stipulated by the Company and theparties are regular in repayments.

(c) There are no overdue amounts in aforesaid loans.

(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 Companies Act 2013in respect of loans and investments made.

(v) The company has not received any public deposits during the year and therefore thisparagraph of the Order is not applicable.

(vi) The Cost records are not prescribed by the Central Government under sub section(1) of section 148 of the Companies Act 2013.

(vii) (a) According to the records information and explanations provided to us theCompany is generally regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income tax salestax service tax duty of customs duty of excise value added tax cess goods andservice tax and other material statutory dues as applicable to it and no undisputedamounts payable were outstanding as at March 31st

2020 for a period of more than six months from the date they became payable.

(d) According to the information and explanation given to us there are no disputeddues outstanding in respect of income tax sales-tax service tax duty of customs dutyof excise goods and service tax and value added tax which have not been deposited withappropriate authorities.

(viii) In our opinion and according to the information and explanations given to usthere were no dues repayable to government nancial institutions banks and debentureholders.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its of cers or employees has been noticed or reported duringthe course of our audit.

(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 the information and explanations given to us theCompany is not a nidhi company Accordingly paragraph 3(xii) of the Order is notapplicable.

(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 nancial statement as required by the applicableaccounting standards.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment of Shares or debentures during the year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) The company is required to be registered under section 45-IA of the Reserve Bankof India Act 1934 and is Registered vide Registration No. B-14.00691.

For H.K. Dua & Co. Chartered Accountants

ICAI Firm Registration Number: 000581N

per CA Harsh Kumar Dua Partner Membership Number 080727 Place: New Delhi Date: June 232020 UDIN:

ANNEXURE B TO THE AUDITOR'S REPORT OF EVEN DATE TO THE MEMBERS OF THE SMART FINSECLIMITED ON THE INTERNAL FINANACIAL CONTROLS UNDER CLAUSE (i) OF SUBSECTION 3 OF SECTION143 OF THE COMPANIES ACT 2013 ("THE ACT").

We have audited the internal nancial controls with reference to nancial statements of SMARTFINSEC LIMITED ("the Company") as of 31 March 2020 in conjunction with ouraudit of the nancial 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 internalnancial controls based on the internal control over nancial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India ( ICAI ). These responsibilities includethe design implementation and maintenance of internal nancial controls with reference tonancial statements that were operating effectively for ensuring the orderly and ef cientconduct of its business including adherence to company s policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable nancialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the effectiveness of the Company'sinternal nancial controls with reference to nancial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls over Financial Reporting (the "Guidance Note") and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal nancial controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether internal nancial controls withreference to nancial statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal nancial controls system over nancial reporting and their operatingeffectiveness. Our audit of internal nancial controls over nancial reporting includedobtaining an understanding of internal nancial controls over nancial reporting assessingthe risk that a material weakness exists and testing and evaluating the design andoperating 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 nancial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is suf cient and appropriate toprovide a basis for our audit opinion on the Company s internal nancial controls withreference to nancial statements.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal nancial control over nancial reporting is a process designed toprovide reasonable assurance regarding the reliability of nancial reporting and thepreparation of nancial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal nancial control over nancialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly re ect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of nancial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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 unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the nancial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal nancial controls over nancialreporting 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 nancial controls over nancialreporting to future periods are subject to the risk that the internal nancial control overnancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internal nancialcontrols system over nancial reporting and such internal nancial controls over nancialreporting were operating effectively as at 31 March 2020 based on the internal controlover nancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For H.K. Dua & Co. Chartered Accountants

ICAI Firm Registration Number: 000581N

per CA Harsh Kumar Dua Partner Membership Number 080727 Place: New Delhi Date: June 232020 UDIN:

.