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SMVD Poly Pack Ltd.

BSE: 535038 Sector: Industrials
NSE: SMVD ISIN Code: INE702Y01013
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SMVD Poly Pack Ltd. (SMVD) - Auditors Report

Company auditors report

To the Members of M/S. SMVD POLY PACK LIMITED (Formerly known as SMVD Poly Pack Pvt.Ltd.)

Report on the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of SMVD Poly PackLimited ("the Company") which comprise the balance sheet as at 31st March2019 the Statement of Profit and Loss and the Statement of Cash Flows for the year thenended on that date and a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "the standalone financialstatements").

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 31 2019 and its profit and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the 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 (ICAI) togetherwith the independence ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matter described below to be thekey audit matters to be communicated in our report.

Key Audit Matter Response to Key Audit Matter
(a) Revenue Recognition (Occurrence and Accuracy) Principal audit procedures and performed :
Revenue from sale of goods is recognized upon transfer of control and is measured at the price at which the Company expects to be entitled from a customer and are recorded net of product claims and other pricing allowances to customers including trade schemes (collectively "trade spend"). Accounting policies: Assessed the appropriateness of the Company's revenue recognition accounting policies including recognition and those related to trade spend by comparing with applicable accounting standards;
The judgements required by management to estimate trade spend accruals are complex due to the diverse range of arrangements and commercial terms across the market. Tests of details: Obtained samples of sales transactions to verify collection in bank statement to determine whether revenue has actually occurred and recorded accurately.
• Compared current year trade spends accruals to the prior year and where relevant perform further inquiries and testing.
• Agreed a sample of trade spend accruals to supporting documentation.
• Performed Trend analysis of utilization of provision of trade spend with actual spends passed to the customer.
• Challenged the Company's assumptions used in estimating trade spend accruals using our experience of the industry in which it operates.
• Developed an expectation of the current year revenue based on trend analysis information taking into account sales and returns information. We compared this expectation against actual revenue and where relevant completed further inquiries and testing;
• Tested the relevant information technology system access and change management controls relating to information used in recorded sales; and
• Tested the adequacy of the Company's disclosures in respect of revenue

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

Th e Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in Director's Report including Annexures toDirector's Report but does not include the standalone financial statements and ourauditor'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 identified above and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Management's Responsibility for the Standalone Financial Statements

Th e 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 gives a true and fair view of the financial position financial performance and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the accounting standards prescribed under section 133 of the Act. isresponsibility 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 appropriateimplementation and maintenance of accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that gives a true and fair view and are free frommaterial misstatement whether due to fraud or error.

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 the company's financialreporting process.

Auditor's Responsibilities for the Audit of 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 controls relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial control 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 ability ofthe Company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the standalone financial statements or if such disclosures are inadequateto modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue 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 standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone 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 current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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 benefit of such communication.

Report on Other Legal and Regulatory Requirements

I. 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 and according to the information and explanations given to us andalso on the basis of such checks as we considered appropriate we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

II. 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 Profit and Loss and theStandalone Statements of Cash Flows dealt with by this report are in agreement with thebooks 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;

e. On the basis of the written representations received from the directors as on March31 2019 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 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 opinion and to the best of our information and according to the explanationsgiven to us remuneration paid by the company to its Directors during the year is inaccordance with the provisions of Section 197 of the Act.

h. With respect to the other matters to be included in the Auditor's Report inaccordance with 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:

i. The company does not have any pending litigations which would impact its financialposition in its standalone financial statements;

ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. Th ere were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For D. K. Parmanandka & Co.
Chartered Accountants
Firm Registration. No: 322388E
Sd/-
(Rahul Gupta)
Place : Kolkata Partner
Date : 30th May 2019 Membership No: 308981

ANNEXURE - A TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in our Independent Auditor's Report to the members of SMVDPoly Pack Limited (the Company') on the stand-alone financial statements for the yearended on March 31 2019. We report that:

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

(b) The Company has a programme of verification to cover all the items of fixed assetsin a phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

(c) As explained the immovable properties as disclosed in the note no. 11 to thestandalone financial statements relating to fixed assets comprises of Land FactoryBuilding and Office Building. Factory Building and Office Building has been constructed bythe company on the land purchased by it. Title deed of land is in the name of the companyand as explained the construction of factory building and office building does notrequire registration and hence no title deed is available for same the details of whichis as under :-

Sl. No. Particulars Lease Hold / Free Hold Gross Block Accumulated Depreciation Net Block
1. Factory Building Constructed on Free hold Land 49982199 9863790 40118409
2. Office Building Constructed on Free hold Land 4680062 474275 4205787

(ii) Th e inventories have been physically verified during the year by the managementat regular intervals. In our opinion and according to the information and explanationsgiven to us no material discrepancies were noticed on physical verification.

(iii) Th e Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013. Accordingly paragraph 3(iii)(a) 3(iii)(b) and3(iii) (c) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has not given any loans guarantees or security or made any investments to whichprovisions of sections 185 and 186 of the Companies Act 2013 is applicable andaccordingly reporting under clause (iv) of the Order is not applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public during the year within the meaning of Section 73 to76 or any other relevant provisions of the Companies Act 2013 and does not have anyunclaimed deposits as at 31st March 2019 and therefore the provisions of clause 3(v) ofthe order is not applicable.

(vi) According to the information and explanation given to us the Central Govt. ofIndia has not specified the maintenance of cost records under sub section (1) of section148 of the Act for the product of the company.

(vii) According to the information and explanations given to us in respect of statutorydues:

(a) The Company is regular in depositing undisputed statutory dues including ProvidentFund Employees State Insurance Customs duty Goods and Service Tax Income-tax and andother material statutory dues applicable to it with the appropriate authorities. We areinformed that cess is not applicable to the Company.

(b) Th ere were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Customs Duty Goods and Service Tax and other materialstatutory dues in arrears as at 31st March 2019 for a period of more than six months fromthe date they became payable.

(c) Th ere are no dues in respect of Income-tax Customs Duty and Goods and Service Taxas on 31st March 2019 on account of disputes.

(viii) In our opinion and according to information and explanations given by themanagement we are of the opinion that the Company has not defaulted in the repayment ofdues to financial institution or banks. The Company has not issued any debentures duringthe year.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments). Further in our opinion and according to theinformation and explanations given to us money raised by way of term loans have beenapplied by the Company during the year for the purposes for which they were raised.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid managerial remuneration inaccordance with requisite approvals mandated by the provisions of section 197 read withSchedule 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 standalone financial statements as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the order is not applicable 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 them. Accordingly paragraph 3(xv)of the Order is not applicable.

(xvi) Th e Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For D. K. Parmanandka & Co.
Chartered Accountants
Firm Registration. No: 322388E
Sd/-
(Rahul Gupta)
Place : Kolkata Partner
Date : 30th May 2019 Membership No: 308981

ANNEXURE - B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal & RegulatoryRequirements' section of our report to the Members of SMVD Poly Pack Limited ofeven date)

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 over financial reporting of SMVDPoly Pack Limited ("the Company") as of March 31 2019 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). 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 safeguarding ofits 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's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of standalone financial statements for external purposes in accordance withgenerally 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 standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial 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 and to the best of our information and according to the explanationsgiven to us the Company and its associate company which are incorporated in India havein all material respects an adequate internal financial controls system over financialreporting and such internal financial controls over financial reporting were operatingeffectively as at March 31 2019 based on the criteria for internal financial controlover financial reporting established by the Company considering the essential componentsof internal control stated in the Guidance Note on Audit of Internal Financial ControlsOver Financial Reporting issued by the Institute of Chartered Accountants of India.

For D. K. Parmanandka & Co.
Chartered Accountants
Firm Registration. No: 322388E
Sd/-
(Rahul Gupta)
Place : Kolkata Partner
Date : 30th May 2019 Membership No: 308981

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