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SMIFS Capital Markets Ltd.

BSE: 508905 Sector: Financials
NSE: N.A. ISIN Code: INE641A01013
BSE 00:00 | 20 Feb 25.00 0.75
(3.09%)
OPEN

25.25

HIGH

25.45

LOW

25.00

NSE 05:30 | 01 Jan SMIFS Capital Markets Ltd
OPEN 25.25
PREVIOUS CLOSE 24.25
VOLUME 362
52-Week high 40.95
52-Week low 23.10
P/E 12.63
Mkt Cap.(Rs cr) 14
Buy Price 23.50
Buy Qty 100.00
Sell Price 25.00
Sell Qty 5.00
OPEN 25.25
CLOSE 24.25
VOLUME 362
52-Week high 40.95
52-Week low 23.10
P/E 12.63
Mkt Cap.(Rs cr) 14
Buy Price 23.50
Buy Qty 100.00
Sell Price 25.00
Sell Qty 5.00

SMIFS Capital Markets Ltd. (SMIFSCAPMKT) - Auditors Report

Company auditors report

To the Members of SMIFS CAPITAL MARKETS LIMITED

Report on the audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of SMIFS CAPITALMARKETS LIMITED ("the Company") which comprise the Balance Sheet as at31stMarch 2019 the Statement of Profit and Loss(including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year ended onthat date and a summary of the significant accounting policies and other explanatoryinformation (here in after referred to as "the standalone financialstatements"). 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 Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31stMarch 2019profit and total comprehensive loss changes in equity and its cash flows for the yearended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial 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.

S. No. Key Audit Matter Auditor's Response
1. Direct Tax provision Our procedures included: -
In the normal course of business "Income Control testing:
Taxes" as the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period - Testing the effectiveness of the controls around the recording and re-assessment of tax provisions.
Our tax expertise:
- Use of our own tax specialists to perform an assessment of the related correspondence to consider the computation of tax provisions.
- Challenging the assumptions using our own expectations based on our knowledge considering relevant judgments passed by authorities as well as assessing relevant opinions from third parties.
Assessing disclosures:
Considering the adequacy of the disclosures in respect of tax and uncertain tax positions. Our results
The results of our testing were satisfactory and we found the level of tax provisioning to be acceptable
2. Valuation of investment in certain equity interests of listed and unlisted company Refer note 3 to the standalone financial statements Based on the audit procedures performed we found the assumptions made by management in relation to the valuation were supported by available evidence.
The investment in certain equity interests of an listed and unlisted company (the ‘investment') are to be measured at fair value at each reporting date and same has been measured at fair value through other comprehensive income.
With reference to the valuation management had estimated the fair value of the Investment at Rs. 155047624 at year end.
In consideration of the Investment is operating in an emerging industry and its fair value is highly dependent on significant management judgements. Accordingly the valuation of the Investment was considered as one of the key audit matters

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

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexure to Board's Report and Shareholder's Information but does notinclude the standalone financial statements 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's Responsibility 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 totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

InpreparingthestandalonefinancialstatementsmanagementisresponsibleforassessingtheCompany'sability to continue as a going concern disclosing as applicable matters related togoing concern and using the going concern basis of accounting unless management eitherintends to liquidate the Company or to cease operations or has no realistic alternativebut to do so.

The Board of Directors isresponsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibility 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.

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

• 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 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 standalone financialstatements represent 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 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 benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by section 143(3) of the Act based on our audit 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 including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.

(d) In our opinion the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. (e) On the basis of the written representations received from the directorsas on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31stMarch 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".Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amendedinour opinion and to the best of our information and according to the explanations given tous:

(i) The Company does not have any pending litigation which would impact its financialposition in its standalone financial statements.

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) There has been no delay in transferring amounts which are required to betransferred to Investor Education and Protection Fund by the Company.

For S K Agrawal and Co.
Chartered Accountants
Firm's Registration No: 306033E
Vivek Agarwal
Partner
Date : 28th day of May 2019 Membership No: 301571

ANNEXURE - A TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of SMIFS CAPITAL MARKETS LIMITED ofeven date)

The Annexure referred to in our Independent Auditor's Report to the members of SMIFSCAPITAL

MARKETS LIMITED (‘the Company') for the year ended on 31st March2019. We report that:

i. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) The property plant and equipment were physically verified during the year by theManagement in accordance with a regular programme of verification which in our opinionprovides for physical verification of all the property plant and equipment at reasonableintervals. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification.

c) According to information and explanations given to us and the records examined by usincluding registered title deeds we report that the title deeds comprising all theimmovable properties of land and buildings are held in the name of the Company as at theBalance Sheet date.

ii. As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on suchphysical verification.

iii. In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms or otherparties covered in the register maintained under section 189 of the Companies Act 2013.Accordingly clause (iii) (a) clause (iii) (b) and clause (iii) (c) of paragraph 3 of theOrder are not applicable.

iv. Based on our audit procedure and on the basis of information and explanations givento us we are of the opinion that the Company has complied with the provisions of section185 and 186 of the Companies Act 2013.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public during the year. Accordingly clause(v) of paragraph 3 of the Order is not applicable.

vi. According to the information and explanations provided by the management theCompany is not engaged in production processing manufacturing or mining activities.Accordingly clause (vi) of paragraph 3 of the Order is not applicable.

vii. According to the information and explanations given to us in respect of statutoryand other dues:-

(a) The Company has been regular in depositing undisputed statutory dues includingProvident Fund Employees State Insurance Income Tax Duty of Customs Goods and ServicesTax Cess and other statutory dues with the appropriate authorities during the year.According to the information and explanations given to us no undisputed amounts payablein respect of the aforesaid dues were outstanding as at 31st March 2019 for a period ofmore than six months from the date of becoming payable.

(b) According to the records of the Company there are no dues of Income Tax Goods andServices Tax and Cess with the appropriate authorities which has not been deposited onaccount of any dispute.

viii. On the basis of the records examined by us and the information and explanationsgiven to us the company has not defaulted in repayment of dues to banks and financialinstitution. The Company did not have any outstanding debentures during the year.

ix. The Company did not raise any money by way of initial public offer and furtherpublic offer (including debt instruments) during the year. To the best of our knowledgeand belief and according to the information and explanations given to us term loansavailed by the Company were applied for the purpose for which the loans were obtained.

x. According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid or provided for managerialremuneration in accordance with requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act 2013.

xii. In our opinion and according to the information and explanations given to us thecompany is not a Nidhi Company. Accordingly clause (xii) of paragraph 3 of the Order isnot applicable.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with sections 177 and 188 of the Companies Act 2013where applicable anddetails of such transactions have been disclosed in the standalone financial statementsas required by the applicable Indian Accounting Standards.

xiv. According to the information and explanations give to us and based on ourexamination of the records the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.Accordingly clause (xiv) of paragraph 3 of the Order is not applicable.

xv. Based on our audit procedures and on the basis of information and explanationsgiven by the management we are of the opinion that the Company has not entered intonon-cash transactions with the directors or persons as per section 192 of the CompaniesAct 2013. Accordingly clause(xv) of paragraph 3 of the Order is not applicable.

xvi. According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.Accordingly clause (xvi) of paragraph 3 of the Order is not applicable.

For S K Agrawal and Co.
Chartered Accountants
Firm's Registration No: 306033E
Vivek Agarwal
Partner
Date : 28th day of May 2019 Membership No: 301571

ANNEXURE - B TO THE AUDITORS' REPORT

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of SMIFS CAPITAL MARKETS LIMITED ofeven date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SMIFSCAPITAL MARKETS LIMITED (‘the Company') as of 31stMarch 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 Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria 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. 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 respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

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 proceduresselecteddependontheauditor'sjudgementincludingtheassessmentoftherisksofmaterialmisstatementof the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting of the Company.

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 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 financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31stMarch 2019 based on the internal controlover financial 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 S K Agrawal and Co.
Chartered Accountants
Firm's Registration No: 306033E
Vivek Agarwal
Partner
Date : 28th day of May 2019 Membership No: 301571