The Members of
Solid Containers Limited
Report on the Audit of Financial Statements
1) We have audited the accompanying financial statements of Solid Containers Limited("the Company") which comprise the Balance Sheet as at 31st March2021 and the Statement of Profit and Loss (including Other Comprehensive Income)Statement of Changes in Equity and Statement of Cash Flow for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.
2) In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion paragraph the aforesaid financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the Indian Accounting Standards prescribed under section 133 of the act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended (Ind AS) and the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2021 and its loss total comprehensive income the changes in equity and its cashflows for the year ended on that date.
Basis for Qualified Opinion
3) 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 Auditors responsibilities for the audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 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 opinion.
4) We draw attention to the note 17.2 and 17.3 to the Financial Statement with regardsto the company not carrying on any manufacturing operations and has substantialaccumulated losses. The net worth of the company has been fully eroded due to theaccumulated losses. In view of the above the Company is no longer a going concern.However the accounts have been prepared on a going concern basis as the management hasstated that they are exploring possible steps to revive its operations.
Key Audit Matters
5) 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 in these matters.
The auditor determines that there are no Key Audit Matters during the year.
Information other than the Financial Statements and Auditors Report thereon
6) The Companys Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual Report Report onCorporate Governance and Business Responsibility report but does not include the financialstatements and our auditors report thereon. The Annual Report is expected to be madeavailable to us after the date of this auditors report. Our opinion on the financialstatements does not cover the other information and we will not express any form ofassurance conclusion thereon. In connection with our audit of the financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated. When we read the Annual Report if weconclude that there is a material misstatement therein we are required to communicate thematter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
7) The Companys Board of Directors is responsible for the matters stated insection 134(5) of the Companies Act 2013 ("the Act) with respect to thepreparation of these Ind AS financial statements that give a true and fair view of thefinancial position financial performance (including Other Comprehensive Income) Changesin Equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards specified underSection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provision of the Act for safeguarding the assetsof the Company and for preventing and detecting frauds and other irregularities; selectionand application of appropriate 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 financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
8) In preparing the financial statements management is responsible for assessing theCompanys 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.
9) Those Board of Directors are also responsible for overseeing the companysfinancial reporting process.
Auditors Responsibilities for the Audit of the Financial Statements:
10) Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
11) As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatements of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient 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 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 hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of the accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of the managements use of going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompanys ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditors report. However future events or conditions may cause theCompany to cease to continue as a going concern.
Evaluate the overall presentation structure and the content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
12) We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
13) We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
14) From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditors 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:
15) As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the "Annexure B" a statementon the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
16) 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) Except for the effects of matters described in the Basis for Qualified Opinionparagraph above in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and Statements of Changes in Equity dealt with by thisReport are in agreement with the books of account.
(d) Except for the effects of matters described in the Basis for Qualified Opinionparagraph above in our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act.
(e) Except for the effects of matters described in the Basis for Qualified Opinionparagraph above in our opinion may have an adverse impact on the functioning of theCompany.
(f) On the basis of written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director interms of Section 164(2) of the Act.
(g) With respect to the adequacy of internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Companys internal financial controlsover financial reporting.
(h) With respect to the other matters to be included in the Auditors report inaccordance with the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and explanations given to us the remuneration paid bythe Company to its directors during the year is in accordance with the provisions ofsection 197 of the Act.
(i) 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:
i. The Company has disclosed the impact of pending litigations vide Note 17.1 on itsfinancial position in its financial statements.
ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For J Singh & Associates
(Firm Reg. No: 110266W)
CA S. P. Dixit
(Membership No.: 041179)
Dated: 11th May 2021
"Annexure A" to the Independent Auditors Report
The Annexure referred to in paragraph (II)(g) under Report on Other Legal andRegulatory Requirements section of our report of even 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 SolidContainers Limited ("the Company") as of 31st March 2021 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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 the Companys 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.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe 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 Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of the management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Companys assets that could havea 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.
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 31st March 2021 based on thecriteria for internal financial controls over financial reporting criteria established bythe 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.
For J Singh & Associates
(Firm Reg. No. 110266W)
CA S. P. Dixit
Membership No. : 041179.
Dated: 11th May 2021.
"Annexure B" to the Independent Auditors Report
The Annexure referred to in paragraph (I) under Report on Other Legal andRegulatory Requirements
section of our report of even date)
1) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner during the year. In our opinionthis periodicity of physical verification is reasonable having regard to size of theCompany and the nature of its assets. Pursuant to the program the 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) According to the information and explanations given to us and the records examinedby us including registered title deeds we report that the title deeds comprising allthe immovable properties of the Company are held in the name of the Company.
2. In our opinion and according to the information and explanations given to us thenature of business of the Company does not require it to have any inventory. Hence therequirement of clause (ii) of paragraph 3 of the said Order is not applicable to theCompany.
3. 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 LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013.
4. In our opinion and according to information and explanations given to us theCompany has complied with provisions of Section 185 and 186 of the Act in respect of grantof loans making investments and providing guarantees and securities as applicable.
5. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit from the public in accordance with the provisions ofSections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. Accordingly paragraph 3(v) of the Order is not applicable to the Company.
6. It has been explained to us that the maintenance of cost records has not beenprescribed under section 148(1) of the Act.
7. According to the information and explanations given to us in respect of statutorydues:
a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income-tax Sales-tax Goodsand Service Tax Customs Duty Excise Duty Value Added Tax cess and other materialstatutory dues applicable to it to the appropriate authorities. There are no undisputedamounts payable in respect of the aforesaid dues outstanding as at 31st March2021 for a period of six months from the date they became payable.
b) There are no dues of Provident Fund Employees State Insurance Income-taxSales-tax Goods and Service Tax Customs Duty Excise Duty Value Added Tax Cess andother material statutory dues in arrears as at 31st March 2021 which have notbeen deposited on account of any dispute except dues of Income tax which are given asbelow:
|Name of the statute ||Nature of dues ||Period to which the amount relates ||Forum where dispute is pending ||Amt. in ' Lakhs |
|The Income Tax Act 1961 ||Income Tax ||FY 2002-03 ||Income Tax Appellate Tribunal ||10.76 |
8. According to the records of the Company examined by us and as per the informationand explanations given to us the Company has not taken any loan from financialinstitutions Banks and government. The Company did not have any outstanding debenturesduring the year. The Company had taken loan from Government in earlier years on whichinterest accrued of '54.29 lakhs are overdue as at 31st March 2021. Asinformed to us by the Management Company s request of interest waiver is consideredby the appropriate department/ authority.
9. In our opinion and according to the information and explanations given to us theCompany has not raised money by way of initial public offer or further public offer(including debt instruments) or term loans and hence reporting under clause (ix) of theOrder is not applicable.
10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no fraud on the Company by its officers oremployees has been noticed or reported during the year.
11. According to the information and explanations given to us managerial remunerationhas been paid or provided in accordance with the requisite approvals mandated by theprovisions of section 197 read with schedule V to the Act.
12. According to the information and explanations given to us the Company is not aNidhi Company as prescribed under section 406 of the Act. Accordingly reporting underclause (xii) of the Order is not applicable to the Company.
13. According to the information and explanations given to us all transactions withthe related parties are in compliance with section 177 and 188 of the Act whereapplicable and the details have been disclosed in the Financial Statements as required bythe applicable Indian Accounting Standards.
14. During the year the Company has not made any preferential allotment or any privateplacement of shares or fully or partly convertible debentures and hence compliance withsection 42 of the Companies Act 2013 is not applicable to the Company during the year.
15. The Company has not entered into any non-cash transactions with directors orpersons connected with him and hence provisions of section 192 of the Companies Act 2013are not applicable to the Company during the year.
16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.
For J Singh & Associates
(Firm Reg. No. 110266W)
CA S. P. Dixit
Membership No.: 041179
Dated: 11th May 2021.