TO THE MEMBERS OF
SONAM CLOCK LIMITED'
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Sonam Clock Limited("the Company") which comprise the Balance Sheet as at March 31 2020 theStatement of Profit and Loss and the Statement of Cash Flows for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India to theextent applicable; a) In the case of the Balance Sheet of the state of affairs of theCompany as at 31st March 2020; b) In the case of the Statement of Profit and Loss of theprofit of the Company for the year ended on that date; and c) In the case of the Cash FlowStatement of the cash flows of the Company for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Auditof the 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 independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made 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 audit opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment are 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. Based on our audit of Financial Statements of the Company forthe period under review we did not come across any material Key Audit Matters to becommunicated in our report.
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 BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon. Our opinion on thefinancial statements does not cover the other information and we do not express any formof assurance conclusion thereon. In connection with our audit of the financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance of the companyincluding the Accounting Standards specified under Section 133 of the Act read with Rule7 of the Companies (Accounts) Rules 2014. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error. In preparing thefinancial statements management is responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Financial Statements
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 auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud 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.
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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
? Obtain an understanding of internal financial controls relevant to the audit in orderto 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
? Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually 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 audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the financialstatements. We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
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 withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the relevant books of account.
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) On the basis of the written representations received from the 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 A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as 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 25(15) (ii) to the financial statements.
ii. The Company has made all material provisions except as mentioned in the notes toaccounts if any as required under the applicable law or accounting standards formaterial foreseeable losses if any and as required on long-term contracts includingderivative contracts.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in "AnnexureB" a statement on the matters specified in paragraphs 3 and 4 of the Order.
(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Sonam Clock Limited of evendate)
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 SONAMCLOCK LIMITED ("the Company") as of March 31 2020 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
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.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting of the Company.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that
(1) pertain to the maintenance 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 authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
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 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.
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our Report to the Members of SONAM CLOCK LIMITED of evendate)
i. FIXED ASSETS:
a. In our opinion the company has generally maintained proper records showing fullparticulars including quantitative details and situation of fixed assets on the basis ofavailable information. b. As explained to us the Company has a program of verification tocover all the items of fixed assets in a phased manner which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Asfurther explained to us pursuant to the said program certain fixed assets werephysically verified by the management during the year. According to the said informationand explanations given to us no material discrepancies were noticed on such verification.c. According to the information and explanations given to us the records examined by usand based on the examination of the conveyance deeds / registered sale deed provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate. In respect of immovable properties of land and building that have been taken onlease and disclosed as fixed assets in the financial statements the lease agreements arein the name of the Company.
ii. INVENTORIES: a. According to the information and explanation given to us theinventories have been physically verified during the year by the management and in ouropinion the frequency of verification is reasonable. b. According to the information andexplanation given to us as explained to us no material discrepancies were noticed onphysical verification of inventories as compared to the book records.
According to the information and explanations given to us and on the basis of ourexamination of the books of account the company has not granted any loans secured orunsecured to companies firms Limited Liability Partnerships or other parties covered inthe register maintained under Section 189 of the Companies Act 2013 during the yearunder review. Consequently the provisions of clause (iii) of the order are not applicableto the company. iv. LOANS INVESTMENTS & GUARANTEES:
According to the information and explanations given to us and on the basis of ourexamination of the books of account the company has not granted any loans directly orindirectly to any directors or person or entities in which directors are interested; hasnot made any investments or has not given any guarantee for loans taken by others from anybank or financial institutions. Consequently the provisions of clause (iv) of the orderare not applicable to the company.
As explained to us the company has not accepted any loans or deposits within meaningof Section 73 to 76 of the Companies Act 2013 read with Rule 2(b) of the Companies(Acceptance of Deposit's) Rules 2014 during the year under review. Consequently theprovisions of clause (v) of the order are not applicable to the company
vi. COST RECORDS:
According to the information and explanations provided by the management to us and tothe best of our knowledge the Company is not engaged in production of any such goods orproduction of any such services for which the Central Government has prescribedparticulars relating to utilization of material or labour or other items of cost. Hencethe provisions of section 148(1) of the Act do not apply to the Company.
vii. STATUTORY DUES: a. As per information and explanation available to us undisputedstatutory dues including provident fund income-tax goods and service tax custom dutycess and other material statutory dues have been generally regularly deposited with theappropriate authorities applicable to it though there had been some delays in certaincases. Further according to information explanation given to us No undisputed statutorydues applicable to the company were outstanding as at 31st March 2020 for aperiod of more than 6 months from the date they become payable. b. According to theinformation and explanation available to us there are no dues outstanding on accountprovident fund income-tax goods and service tax custom duty cess and other materialstatutory dues on account of dispute except the amount mentioned in Note 25(15)(ii) to thefinancial statements. viii. DUES TO FINANCIAL INSTITUTION BANKS OR DEBENTURE
Based on our audit procedures and as per information and explanation given to us by themanagement of the company we are of the opinion that company has not defaulted inrepayment of dues to financial institutions and banks during the year under review.
The company has not issued any debentures.
ix. TERM LOANS & PUBLIC ISSUE:
In our opinion and according to the information and explanations given to us thecompany has not raised money by way of initial public offer during the year.
Based on the audit procedures performed and according to the information explanationsgiven to us on an overall basis the existing as well as new term loans have been appliedfor the purpose for which they were obtained.
Based upon the audit procedures performed and as per the information and explanationgiven by the management we report that no fraud by the company or any fraud on thecompany by its officers / employees has been noticed or reported during the course of ouraudit.
xi. MANAGERIAL REMUNERATION:
In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. NIDHI COMPANY:
In our opinion the company is not a Nidhi Company. Consequently the provisions ofclause (xii) of the order are not applicable to the company.
xiii. RELATED PARTY TRANSACTIONS:
Based upon the audit procedures performed and as per the information and explanationgiven by the management all the transactions with the related parties are in compliancewith Section 177 and 188 of the Companies Act 2013 and have been duly disclosed in thefinancial statements as required by the applicable accounting standards.
xiv. PREFERENTIAL ALLOMENT / PRIVATE PLACEMENT:
Based on the audit procedures performed and according to the information andexplanations given to us the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Consequently the provisions of clause (xiv) of the order are not applicable tothe company. xv. NON-CASH TRANSACTIONS:
Based on the audit procedures performed and according to the information andexplanations given to us the company has not entered into any non-cash transactions withdirectors or persons connected with him. Consequently the provisions of clause (xv) ofthe order are not applicable to the company.
xvi. REGISTRATION UNDER SECTION 45-IA OF RBI ACT 1934:
According to the information and explanations given to us and based on our examinationof the records of the company the company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934.
|For SVK & Associates |
|Chartered Accountants |
|FRN: 118564W |
|CA. Shilpang Karia |
|M. No. 102114 |
|UDIN: 20102114AAAADE7703 |
|Date: 30th June 2020 |
|Place: Morbi |