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Somany Home Innovation Ltd.

BSE: 542905 Sector: Others
NSE: SHIL ISIN Code: INE05AN01011
BSE 00:00 | 26 Feb 284.05 -8.50
(-2.91%)
OPEN

290.00

HIGH

297.75

LOW

282.05

NSE 00:00 | 26 Feb 285.60 -7.80
(-2.66%)
OPEN

286.00

HIGH

298.90

LOW

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OPEN 290.00
PREVIOUS CLOSE 292.55
VOLUME 11831
52-Week high 317.70
52-Week low 53.25
P/E 120.36
Mkt Cap.(Rs cr) 2,054
Buy Price 281.00
Buy Qty 10.00
Sell Price 288.90
Sell Qty 20.00
OPEN 290.00
CLOSE 292.55
VOLUME 11831
52-Week high 317.70
52-Week low 53.25
P/E 120.36
Mkt Cap.(Rs cr) 2,054
Buy Price 281.00
Buy Qty 10.00
Sell Price 288.90
Sell Qty 20.00

Somany Home Innovation Ltd. (SHIL) - Auditors Report

Company auditors report

To the Members of

Somany Home Innovation Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Somany Home Innovation Limited("the Company") which comprise the Balance sheet as at 31st March 2020 and theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Cash Flow Statement for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information (herein after referred to as "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 31st March 2020 and its Profit (includingother comprehensive income) changes in equity and its cash flows for the year ended onthat 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 our audit of thestandalone financial statements under the provisions of the Companies Act 2013 and theRules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Emphasis of Matter

Attention is drawn to:

i) Note no. 51 which describes the uncertainties and the impact of COVID-19 pandemic onthe Company's operations and performance as assessed by the management. Further due toCOVID-19 related lock-down/ restrictions management could perform year end physicalverification of inventories at certain locations subsequent and near to year end. Howeverwe could not been able to physically observe the verification of inventories that wascarried out by the Management. Consequently we have performed alternate procedures toaudit the existence of Inventory as per the guidance provided by in SA 501 "AuditEvidence – Specific Considerations for Selected Items" and have obtainedsufficient audit evidence to issue our unmodified opinion on these standalone financialstatements.

Further opinion of the management on the carrying value of assets and liabilities andCOVID-19 impact on the operations as stated in the said note.

ii) The appointment and managerial remuneration of Rs 83.72 lakh paid to a Wholetimedirector of the company is subject to approval by the shareholders in ensuing AnnualGeneral Meeting. (Refer Note no. 44 (1))

Our opinion is not modified in respect of the above matters.

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 for the financial yearended March 31 2020. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.

Description of Key Audit Matter How our audit addressed the key audit matter
Payment of managerial remuneration : Our audit procedures included among others the following:
The appointment and managerial remuneration of Rs 83.72 lakh paid to a Whole-time director of the company is subject to approval by the shareholders in ensuing Annual General Meeting. › We have reviewed the terms and conditions related to appointment of Wholetime director(WTD) as approved by the Board of directors.
› Examined the process and related documents
› We reviewed the minutes and forms submitted to MCA.
› We calculated the profit for the purpose of arriving at limit prescribed under the Section 197 and Schedule V of the Act and salary paid/provided in relation to said WTD and concluded that remuneration paid is in excess of limit prescribed by the Act and provisions thereof.
Considering the legal provisions and reporting involved in this matter we have consider this matter as a Key audit matter and reported accordingly.

Information Other than the 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 ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Shareholder's Information but does not include the standalone financialstatements 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 ouraudit of the standalone financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained during the course ofour 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 have nothing to report in this regard.

Responsibilities of Management for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgements and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal 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.

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 Directors are also responsible for overseeing the Company's financialreporting 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.

As part of an audit in accordance with SAs we exercise professional judgement 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 control 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 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 the 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.

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 financial year ended 31st March 2020 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 standalone financial statements.

Other Matter

I) As stated in Note no. 47 financial statements for the year ended 31st March 2019are restated audited figures after giving impact of the scheme approved by the Hon'bleNCLT Kolkata Bench on 26th June 2019 and effective from 1st April 2018 which has beenapproved by Board of Directors. The restated financial statements for the year ended 31stMarch 2019 are to be adopted by the shareholders.

Our opinion on above matter is not modified.

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 A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.

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 including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport 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 Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 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 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 matter to be included in the Auditors' report underSection 197(16) as amended:

In our opinion and according to the information and explanation given to us themanagerial remuneration paid/provided during the current year by the Company is inaccordance with the provisions of section 197 of the act [refer note 44(1)].

(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 amended inour opinion and to the best of our information and according to the explanations given tous:

i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note no. 41 to the standalone financialstatements;

ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;

iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For LODHA & CO.

Chartered Accountants

ICAI Firm Registration Number: 301051E

N. K. Lodha

Partner

Membership Number: 85155

UDIN: 20085155AAAACS4087

Place: New Delhi

Date: 23 June 2020

ANNEXURE A TO THE AUDITORS' REPORT

The Annexure referred to in Independent Auditors' Report to the members of the SomanyHome Innovation Limited on the standalone financial statements for the year ended 31stMarch 2020 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 regular programme of physical verification of its fixed assetsby which all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets.

(c) The Company is not having any immovable property hence reporting under this clauseis not applicable.

(ii) As per the information and explanation given the inventories of the Company havebeen physically verified by the management at reasonable intervals during the year. Thediscrepancies noticed on such physical verification of inventory as compared to bookrecords were not material.

(iii) According to the records and information explanation made available 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 (‘the Act') hence other parts of this clause are notapplicable.

(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 with respectto the loans investments guarantees and security (read with Note no. 47).

(v) The Company has not accepted any deposits from the public within the meaning ofSection 73 to 76 of the Act and relevant rules hence we do not offer any comment on thesame. Further we have been informed that no order has been passed by the Company LawBoard or National Company Law Tribunal or Reserve Bank of India or any court or any othertribunal in this regard.

(vi) The Central Government has not specified us maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's products. Accordinglythe provisions of clause 3(vi) of the Order are not applicable.

(vii) (a) According to the records of the company the company is generally regular indepositing and undisputed statutory dues including provident fund employees' stateinsurance income tax Goods and Service Tax custom duty cess and other materialstatutory dues with the appropriate authorities. There were no undisputed statutory duespayable as at March 31 2020 which were outstanding for a period of more than six monthsfrom the date they become payable.

(b) According to the records and information & explanations given to us there areno dues in respect of income tax or sales tax or service tax or duty of custom or goodsand services tax or duty of excise or value added tax that have not been deposited withthe appropriate authorities on account of any dispute except as given below:

Name of Statute Nature of Due Period Amount involved (In lakh) Forum where matter is pending
Finance Act 1994 Service Tax 2013-14 37.57 The Hon'ble Supreme Court of India

(viii) The Company has not defaulted in repayment of loans or borrowings to any bank orfinancial institution or government during the year. The Company did not have anyoutstanding debentures during the year.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments). On the basis of information and explanationgiven to us term loans have been applied for the purposes for which they were obtained.

(x) Based on the audit procedures performed and on the basis of information andexplanations given to us no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the period covered by our audit.

(xi) On the basis of records and information and explanations made available and basedon our examinations of the records of the company managerial remuneration has been paid /provided to a Wholetime director is in accordance with the provisions of Section 197 readwith Schedule V of the Act {read with note no. 44(1)}.

(xii) On the basis of information and explanation given to us the Company is not aNidhi Company.

Accordingly reporting under clause 3 (xii) of the said order is not applicable.

(xiii) As per the information and explanations records made available by the managementof the company and audit procedures performed for the related party transactions enteredduring the year the company has complied with the provisions of section 177 and 188 ofthe Act where applicable.

As explained and as per the records / details the related party transactions have beendisclosed in the standalone financial statements as required by the applicable accountingstandards. (Refer Note no.44)

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder clause 3 (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 the Company has not entered into non-cash transactions withdirectors or persons connected with them. Accordingly clause 3(xv) of the Order is notapplicable.

(xvi) According to the information and explanation and given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For LODHA & CO.

Chartered Accountants

ICAI Firm Registration Number: 301051E

N. K. Lodha

Partner

Membership Number: 85155

UDIN: 20085155AAAACS4087

Place: New Delhi

Date: 23 June 2020

ANNEXURE B TO THE AUDITORS' REPORT

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' 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 Somany HomeInnovation Limited ("the Company") as of March 31 2020 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.

Auditor's 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 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 theauditor's judgement including the assessment of the risks of material misstatement of thefinancial 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 March 31 2020 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 LODHA & CO.

Chartered Accountants

ICAI Firm Registration Number: 301051E

N. K. Lodha

Partner

Membership Number: 85155

UDIN: 20085155AAAACS4087

Place: New Delhi

Date: 23 June 2020

.