SOMI CONVEYOR BELTINGS LTD. JODHPUR (RAJASTHAN)
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS Financial Statements of SOMICONVEYOR BELTINGS LIMITED (CIN: L25192RJ2000PLC016480) ("the company") whichcomprises the Balance Sheet as at March 31 2019 the Statement of Profit andLoss(including other comprehensive income) the Statement of Changes in Equity and theStatement of Cash Flows for the year then ended and a summary of significant accountingpolicies and other explanatory information (here in after referred to as "StandaloneInd AS Financial Statement") In our opinion and to the best of our information andaccording to the explanations given to us the aforesaid Standalone Ind AS FinancialStatement give the information required by the Companies Act 2013 ("the Act")in the manner so required and give a true and fair view in conformity with the IndianAccounting Standards prescribed under section 133 of the Act read with the Companies(Indian Accounting Standard) Rules 2015 as amended ("Ind AS") and otheraccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2019 and its financial performance including other comprehensive incomeand it's Cash Flow for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143 (10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial 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 Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis 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 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. Wehave determined the matters described below to be the Key Audit Matters to be communicatedin our Report:-
|S.No. Key Audit Matters ||Auditor's Response |
|1. Evaluation of uncertain tax positions The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible ||Principal Audit Procedures Obtained details of completed tax assessments and demands for the year ended March 31 2019 from management. We involved our internal experts to challenge the management's underlying assumptions |
|outcome of these disputes. Refer Notes 31 A to the Standalone Financial Statements ||in estimating the tax provision and the possible outcome of the disputes. Our internal experts also considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions. Additionally we considered the effect of new information in respect of uncertain tax positions as at April 1 2018 to evaluate whether any change was required to management's position on these uncertainties. |
|2. Recoverability of Indirect tax receivables ||Principal Audit Procedures |
|As at March 31 2019 non -current assets in respect of withholding tax and others includes Cenvat recoverable amounting to Rs. 2.52 lacs and sales tax amounting to Rs. 16.16 lacs which are pending adjudication. Refer Notes 31 B to the Standalone Financial Statements ||We have involved our internal experts to review the nature of the amounts recoverable the sustainability and the likelihood of recoverability upon final resolution. |
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 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 financialstatements does not cover the other information and we do not express any form ofassurance conclusion thereon. In connection with our audit of the standalone financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated. If based on the work we have performed we conclude thatthere is a material misstatement of this other information we are required to report thatfact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Ind AS Financial Statement that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Ind AS Financial Statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error. In preparing the standalonefinancial statements the Board of Directors is responsible for assessing the Company'sability to continue as a going concern disclosing as applicable matters related togoing concern and using the going concern basis of accounting unless the Board ofDirectors either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone 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 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 reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent 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 chargedwith governance regarding among other matters the planned scope and timing of the auditand significant audit findings including any significant deficiencies in internal controlthat we identify during our audit. We also provide those charged with governance with astatement that we have complied with relevant ethical requirements regarding independenceand to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence 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 Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by section 143(3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as appears from ourexamination of those books; c) The Balance Sheet the Statement of Profit and LossStatement of Changes in Equity and the Cash Flow Statement dealt with by this Report arein agreement with the books of account; d) In our opinion the aforesaid Standalone Ind ASFinancial Statements comply with the Accounting Standards specified under Section 133 ofthe Act read with Rule 7 of the Companies (Accounts) Rules 2014. e) On the basis ofwritten representations received from the directors of the company as on March 31 2019taken on record by the Board of Directors none of the directors is disqualified as onMarch 31 2019 from being appointed as a director in terms of Section 164(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". g) In our opinion and to the best of ourinformation and according to the explanations given to us the remuneration paid by theCompany to its directors during the year is in accordance with the provisions of section197 of the Act. h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 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 Standalone Ind AS Financial Statements Refer Note 31 to the Standalone IndAS
Financial Statements; ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses; iii. There wereno amounts which were required to be transferred to the Investor Education and ProtectionFund by the Company.
| ||FOR SINGHVI & MEHTA |
| ||CHARTERED ACCOUNTANTS |
| ||FR No. 002464W |
| ||(SHILPA SINGHVI) |
|PLACE : JODHPUR ||PARTNER |
|DATED : 30TH MAY 2019 ||M.No. 144679 |
"Annexure A" to the Independent Auditor's Report
The annexure referred to in paragraph 1 under the heading 'Report on Other Legal &Regulatory Requirements' of our report of even date to the Standalone Ind AS FinancialStatements of SOMI CONVEYOR BELTINGS LIMITED for the year ended March 312019 we reportthat:
1) FIXED ASSETS
a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
b) According to information provided by the management fixed assets have beenphysically verified by the management at reasonable intervals and no materialdiscrepancies were noticed on such verification.
c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
In our opinion and according to information and explanations given to us the inventoryhas been physically verified by the management at reasonable intervals and thediscrepancies noticed during the physical verification of inventory as compared to bookrecords were not material.
3) LOANS & ADVANCES
The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under Section 189 of the Companies Act2013. Accordingly clause (iii) (a) (iii) (b) & (iii) (c) of paragraph 3 of "theOrder" is not applicable to the Company.
4) LOANS INVESTMENT & GUARANTEES
According to information & explanation given to us company has not given any loanor provided any guarantee to any person specified under section 185 of Companies Act 2013.
Further Company has not made any investment nor given any loan or provided anyguarantee to any body corporate as specified under section 186 of Companies Act 2013.Therefore clause (iv) of paragraph 3 of "the order" is not applicable to thecompany.
5) FIXED DEPOSITS
According to the information and explanations given to us the Company has not acceptedany deposits therefore directive issued by the Reserve Bank of India and the provisionsof Sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and therules framed there under clause (v) of paragraph 3 of "the Order" is notapplicable to the Company.
6) COST RECORDS
We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended and prescribed by the CentralGovernment under sub-section (1) of Section 148 of the Companies Act 2013 and are of theopinion that prima facie the prescribed cost records have been made and maintained. Wehave however not made a detailed examination of the cost records with a view todetermine whetherthey are accurate or complete.
7) STATUTORY DUES
a) On the basis of our examination of the records of the Company amounts deducted/accrued in the books of account in respect of undisputed statutory dues includingprovident fund income-tax sales tax value added tax Goods and Services Tax duties ofcustoms and excise service tax and other material statutory dues have been generallyregular in depositing during the year by the Company with the appropriate authoritiesexcept for Advance tax for Financial year 2018-19 which is not paid by the company.
b) According to the information and explanation given to us there are no disputedamounts payable in respect of income tax sales tax service tax duty of customs duty ofexcise value added tax except as stated below:-
|Name of the Statute ||Nature of dues ||Amount (in Rs.) ||Period to which the amount relates ||Forum where dispute is pending |
|Income Tax Demand ||Income Tax ||4657870.00 ||A.Y. 2010-11 ||ITAT- Pending for review Rajasthan High Court- Pending for admission of Appeal |
|Income Tax Penalty ||Income Tax ||3256299.00 ||A.Y. 2010-11 ||CIT(Appeal) |
|Income Tax Demand ||Income Tax ||9742460.00 ||A.Y. 2015-16 ||CIT(Appeal) However Rs. 1950000.00 paid as 20% of demand raised. |
|Sales Tax Penalty ||Sales Tax ||146947.00 ||A.Y. 2008-09 ||Commissioner (A) Commercial Tax Department |
|Sales Tax Demand ||Sales Tax (ITC) ||1316184.00 ||A.Y. 2008-09 ||The Company is aggrieved of the demand and contesting the same. The Company is also planning to file an application before hon'able High Court relating to this matter. |
| || ||300000.00 ||A.Y. 2009-10 || |
8. DEFAULT IN PAYMENT OF DUES
According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in payment of dues to anyfinancial institution or bank or Government or debenture holders as at the balance sheetdate. Accordingly clause (viii) of the paragraph 3 of "the Order" is notapplicable to the Company.
9. FUND RAISED BY PUBLIC ISSUE/ FOLLOW ON OFFER / TERM LOAN
The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3 (ix) of the Order is not applicable.
During the course of our examination of the books and records of the Company carriedout in accordance with the generally accepted auditing practices in India and according tothe information and explanations given to us no fraud by the Company or any fraud on thecompany by its officers / employees has been noticed or reported during the year.
11. MANAGERIAL REMUNERATION
The Company has provided / paid managerial remuneration in accordance with therequisite approvals mandated by the provisions as specified under section 197 read withSchedule V to The Companies Act 2013 during the year.
12. NIDHI COMPANY
The company is not a Nidhi Company as defined under section 406 of Companies Act 2013.Therefore clause (xii) of paragraph 3 of the order is not applicable to the company.
13. TRANSACTIONS WITH RELATED PARTY
As per the information and explanation given to us all transactions with relatedparties are in compliance with the provision of section 177 and section 188 of CompaniesAct 2013. The relevant disclosure as required by AS-24 has been made in the StandaloneInd AS Financial Statements.
14. PREFERENTIAL ALLOTMENT / PRIVATE PLACEMENT OF SHARE / ISSUE OF DEBENTURE
During the year Company has not made any preferential allotment or private placement ofshares nor have issued any fully or partly convertible debenture as required under section42 of Companies Act 2013. Therefore clause (xiv) of paragraph 3 of the order is notapplicable to the company.
15. NON CASH TRANSACTIONS WITH DIRECTORS
According to the information and explanation given to us Company has not entered in toany non cash transactions with directors or persons connected with him and henceprovisions of section 192 of the Companies Act 2013 are not applicable.
16. NBFC REGISTRATION
The Company is not required to be registered under section 45-IA of the Reserve Bank ofIndia Act 1934 as NBFC. Therefore clause (xvi) of paragraph 3 of "the order"is not applicable to the Company.
|PLACE : JODHPUR ||FOR SINGHVI & MEHTA ||(SHILPA SINGHVI) |
|DATED : 30TH MAY 2019 ||CHARTERED ACCOUNTANTS ||PARTNER |
| ||FR No. 002464W ||M.No. 144679 |
"Annexure B" to the Independent Auditor's Report of even date on theStandalone Ind AS Financial Statements of SOMI CONVEYOR BELTINGS LIMITED
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 SOMICONVEYOR BELTINGS LIMITED ("the Company") as of March 31 2019 in conjunctionwith our audit of the Standalone Ind AS Financial Statements of the Company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining InternalFinancial controls based on the internal control 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS 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 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 Ind AS Financial Statements for external purposes in accordancewith Generally 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 StandaloneInd AS Financial Statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the Company are being made only in accordance withauthorizations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on the StandaloneInd AS 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 of to the best 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 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 SINGHVI & MEHTA |
| ||CHARTERED ACCOUNTANTS |
| ||FR No. 002464W |
| ||(SHILPA SINGHVI) |
|PLACE : JODHPUR ||PARTNER |
|DATED : 30TH MAY 2019 ||M.No. 144679 |