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Smartlink Holdings Ltd.

BSE: 532419 Sector: Financials
NSE: SMARTLINK ISIN Code: INE178C01020
BSE 00:00 | 20 Feb 80.15 1.10
(1.39%)
OPEN

79.60

HIGH

80.50

LOW

78.35

NSE 00:00 | 20 Feb 78.75 -0.75
(-0.94%)
OPEN

80.15

HIGH

81.05

LOW

78.55

OPEN 79.60
PREVIOUS CLOSE 79.05
VOLUME 107
52-Week high 112.50
52-Week low 68.10
P/E
Mkt Cap.(Rs cr) 107
Buy Price 78.00
Buy Qty 25.00
Sell Price 80.15
Sell Qty 103.00
OPEN 79.60
CLOSE 79.05
VOLUME 107
52-Week high 112.50
52-Week low 68.10
P/E
Mkt Cap.(Rs cr) 107
Buy Price 78.00
Buy Qty 25.00
Sell Price 80.15
Sell Qty 103.00

Smartlink Holdings Ltd. (SMARTLINK) - Auditors Report

Company auditors report

TO THE MEMBERS OF SMARTLINK HOLDINGS LIMITED (formerly known as Smartlink NetworkSystems Limited)

Report on the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of Smartlink HoldingsLimited (“the Company”) which comprise the Balance Sheet as at March 31 2019the Statement of Profit and Loss the Cash Flow Statement for the year then ended andnotes to financial statements including a summary of significant accounting policies andother explanatory 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 trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 312019 and its loss (financialperformance) 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) 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 thestandalone Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (“ICAI”) together with the ethical requirements that are relevant to ouraudit of the standalone financial statements under the provisions of the Act 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 audit opinion on thestandalone financials statements.

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.

Below we describe what we consider to be the key audit matters:

Sr. No. Key Audit Matter How the matters were addressed in our audit
1. Valuation of current and non-current Investments: • Our audit procedures to assess the valuation of unquoted investments included the following:
Current investments are valued at lower of cost and market value. - Evaluating the design implementation and operating effectiveness of any internal controls over the valuation of investments.
Non-current investments are stated at cost unless there is other than temporary diminution in their value. - Considering the appropriateness of the Company's accounting policies and assessing compliance of the accounting policies in terms of the applicable accounting standards.
- Verifying the adequacy of judgements of the Company on the valuation of unquoted current investments and non-current investments with information on income earned from current investments; information obtained on the investment entity; the financial statements of the subsidiaries and also discussion with management of the subsidiaries on the continuation of the subsidiaries as going concern and future business prospects.
There is inherent risk of misstatement arising out of inaccurate valuation of current and non-current investments that are not quoted. Unquoted current investments comprise of investment in preference shares and unquoted non-current investments comprise of equity shares in subsidiaries companies.
2. Contingent Liabilities • Our audit procedures included holding discussions with the Company's personnel responsible for the Company's defence in these matters to understand their legal views on the matter.
The Company has disputed demands and penalty relating to excise duty in connection with valuation of products manufactured by the Company. These disputes are currently pending before the Customs Excise and Service Tax Appellate Tribunal (CESTAT). • We obtained written legal confirmation of the disputed demands from the Company's external legal counsel regarding their opinion of the Company's prospects in these cases and their interpretation of the impact.
Given the uncertainty involved in the appeals the ultimate outcome of these matters cannot be predicted with virtual certainty.
Further whether the Company is successful or not in these matters the ultimate decision of the courts will have a material effect on the financial position results of operations and cash flows. • We verified the documents related to the matters to understand the findings of the revenue authorities and to assess the representations of management and the Company's independent legal counsel.
Management have engaged independent legal counsel on these matters. • We verified the disclosures of disputed demand in the financial statements.
The accounting for and disclosure of this contingent liability is complex and is a significant matter in our audit because of the judgements required to determine the level of certainty in the matter.

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

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Directors' Report includingAnnexures but does not include the standalone financial statements and our auditor'sreport 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.

Responsibilities of Management and Those charged with Governance for StandaloneFinancial 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the 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 accounting policies; makingjudgments 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 statement that give a true and fair view andare free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the 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 the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so. Those Board of Directorsare also responsible for overseeing the company's financial reporting process.

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 influence the economic decisions of userstaken on the basis of these standalone financial statements.

We give in “Annexure A' a detailed description of Auditor's responsibilities forAudit of the Standalone Financial Statements.

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 Companies Act 2013 we give in the 'Annexure B' a statement on the matters specifiedin 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 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 Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt 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 (Accounts) Rules 2014 as amended.

(e) On the basis of the written representations received from the directors as on March312019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312019 from being appointed as a director in terms of Section 164 (2) of theAct.

(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 C'

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditor's) Rules 2014 in our opinionand 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 22 to the standalonefinancial statements.

ii. The Company did not have any on long-term contracts including derivative contractsfor which 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.

3. In our opinion according to information and explanations given to us the Companyhas not paid / provided for managerial remuneration to its directors for the year endedMarch 31 2019 and therefore the reporting requirement regarding payment of remunerationto directors within the limits prescribed under section 197 of the Act and rulesthereunder are not applicable.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Vinayak M Padwal
Place : Mumbai Partner
Date : May 15 2019 Membership No.049639

Annexure A to the Independent Auditor's Report

OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF SMARTLINK HOLDINGS LIMITEDAuditor's Responsibilities for the Audit of the Financial Statements

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

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• 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 hasinternal financial controls with reference to financial statements in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by 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 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.

• 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.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Vinayak M Padwal
Place : Mumbai Partner
Date : May 15 2019 Membership No.049639

Annexure B to the Independent Auditor's Report

OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF SMARTLINK HOLDINGS LIMITED FORTHE YEAR ENDED MARCH 2019

[Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report]

i. (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets (Property Plant

and Equipment).

(b) As explained to us fixed assets have been physically verified by the management inaccordance with a phased programme of verification which in our opinion is reasonableconsidering the size of the Company and nature of its assets. The frequency of physicalverification is reasonable and no material discrepancies were noticed on suchverification.

(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 comprising of immovableproperties of land and building which are freehold are held in the name of the Company ason the Balance sheet date. In respect of immovable properties of land and building thathave been taken on lease and disclosed as fixed assets in the standalone financialstatements the lease agreements are in the name of the Company.

ii. The Company is an investment company and consequently does not hold anyinventory. Accordingly the provisions stated in paragraph 3(ii) of the Order are notapplicable to the Company.

iii. The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnerships (LLP) or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 ('the Act'). Accordingly the provisionsstated in paragraph 3 (iii) (a) to (c) 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 in respect ofloans investments guarantees and security made.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of Sections 7374 75 and 76 of the Act and the rules framed there under.

vi. According to the information and explanations given to us the Company is notrequired to maintain the books of accounts pursuant to the rules prescribed by the CentralGovernment for the maintenance of cost records under Section 148(1) of the Act.

vii. (a) According to the information and explanations given to us and records examinedby us the Company has been generally regular in depositing undisputed statutory duesrelating to investor education and protection fund income tax goods and service taxcustom duty professional tax provident fund employees state insurance and otherstatutory dues as applicable with the appropriate authorities. According to theinformation and explanations given to us there are no arrears of outstanding statutorydues as at the last day of the financial year for a period of more than six months fromthe date they became payable.

(b) According to the information and explanation given to us and examination of recordsof the Company the outstanding dues of income-tax sales tax goods and service taxvalue added tax provident fund employees state insurance customs duty cess duties ofexcise and any other statutory dues on account of any dispute are as follows:

Name of the statute Nature of dues Disputed Amount (' in lakhs)* Period to which the amound relates Forum where dispute is pending Remarks if any
The Central Excise Act 1944 Central excise demand 240.90 2001-05 Central Excise and Service Tax Appellate Tribunal (CESTAT)
Penalty on Central excise demand 340.90 2001-05 Central Excise and Service Tax Appellate Tribunal (CESTAT)
Central excise demand 32.26 2004-05 Central Excise and Service Tax Appellate Tribunal (CESTAT)
Penalty on Central excise demand 46.26 2004-05 Central Excise and Service Tax Appellate Tribunal (CESTAT)
Penalty on Central excise demand 3.62 2007-08 Central Excise and Service Tax Appellate Tribunal (CESTAT)
Maharashtra Value Added Tax Act 2002 Demand of central sales tax and interest thereon 2.66 2013-14 Deputy Commissioner of Sales Tax Appeals
Total 666.60

*Net of deposits.

viii. The Company does not have any loans or borrowings from any financial institutionbanks government or debenture holders during the year. Accordingly the provision statedin paragraph 3(viii) of the Order is not applicable to the Company.

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. Accordingly theprovisions stated in paragraph 3 (ix) of the Order are not applicable to the Company.

x. During the course of our audit 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 material fraud by the Company or on the Company by its officers or employees.

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not paid/ provided formanagerial remuneration during the year. Accordingly paragraph 3 (xi) of the Order is notapplicable to the Company.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly the provisions stated in paragraph 3(xii) ofthe Order are not 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. Accordingly the provisions stated in paragraph 3 (xiv) of the Order are notapplicable to the Company.

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 provisions statedin paragraph 3(xv) of the Order are not applicable to the Company.

xvi. The Company is required to and has been registered under Section 45-IA of theReserve Bank of India Act 1934. The Company has obtained certificate of registration asnon-banking financial institution without accepting deposits under Section 45-IA of theReserve Bank of India Act 1934 vide certificate dated May 02 2018.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Vinayak M Padwal
Place : Mumbai Partner
Date : May 15 2019 Membership No.049639

Annexure C to the Independent Auditor's Report

OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF SMARTLINK HOLDINGS LIMITED

[Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the Members of SmartlinkHoldings Limited on the Financial Statements for the year ended March 31 2019]

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 with reference to financial statementsof Smartlink Holdings Limited (“the Company") as of March 31 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI) (the“Guidance Note"). These responsibilities include the design implementation andmaintenance of internal financial controls that were operating effectively for ensuringthe orderly and efficient conduct of its business including adherence to Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing issued by ICAI anddeemed to be prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether internal financial controls with reference to financial statementswas established 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 with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue 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 withreference to financial statements.

Meaning of Internal Financial Controls With reference to Financial Statements

A Company's internal financial control with reference to financial statements 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 withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions 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 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 With reference to financialstatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an internal financialcontrols with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at March 312019 based onthe internal control with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Vinayak M Padwal
Place : Mumbai Partner
Date : May 15 2019 Membership No.049639