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Splendid Metal Products Ltd.

BSE: 513414 Sector: Metals & Mining
NSE: SMPL ISIN Code: INE215G01021
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VOLUME 100
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Buy Price 0.27
Buy Qty 17630.00
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OPEN 0.26
CLOSE 0.26
VOLUME 100
52-Week high 0.28
52-Week low 0.19
P/E
Mkt Cap.(Rs cr) 8
Buy Price 0.27
Buy Qty 17630.00
Sell Price 0.26
Sell Qty 29132.00

Splendid Metal Products Ltd. (SMPL) - Auditors Report

Company auditors report

TO THE MEMBERS OF SPLENDIDMETALPRODUCTSLIMITED Report on the StandaloneFinancial Statements

We have audited the accompanying standalone financial statements ofSplendidMetalProductsLimited {'the Company') (Formerly known as SujanaMetal ProductsLimited) which comprise the Balance Sheet as at March 31 2020 the Statement of Profitand Loss and the Cash Flow Statement for the year ended and a summary of the significantaccounting policies and otherexplanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 {'the Act') with respect to the preparationof these standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act as applicable. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; 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 these standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalonefinancial statements based on our audit. We have taken into account the provisions of theAct the accounting and auditing standards and matters which are required to be includedin the audit report underthe provisions of the Act and the Rules made thereunder and theOrder under Section 143(11) of the Act. We conducted our audit in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement. An audit involves performing procedures to obtain audit evidenceabout the amounts and the disclosures in the standalone financial statements. Theprocedures selected depend on the auditors'judgment including the assessment of the risksof material misstatement of the standalone financial statements whether due to fraud orerror. In making those risk assessments; the auditor considers internal financial controlrelevant to the Company's preparation of the standalone financial statements that give atrue and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the financial statements. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone financial statements.

Basis for Qualified Opinion

(ij The Company has defaulted in repayment of dues to Banks/'FinancialInstitutions and all loans outstanding were

classified as NPA's and were recalled by all the Banks. Note 5 formingpart of the Statement regarding Interest on Working Capital Loans Term Loans andElectricity power charges for the last three guarters of non-operating units. Theaccumulated loss as on 31st March 2020 would have been increased from Rs. 179873.50lakhs to Rs.261675.52 lakhs had the company provided for the same.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 312020 and its loss and its cash flows for the yearended on that date.

Emphasis of Matter

We Draw attention to the following

{I) The Company has been continuously making losses consequently itsnet worth is negative and the Company's total

liabilities exceeded Its total asset as at 31" March 2020 byRs.{117814.53Lakhs). This indicates the existence of material uncertainty that may castSignificant doubt on the Company's ability to continue as going concern.

{ii) The dues to Banks/Financial Institutions as on 31.03.2020 as percompany is Rs. 242790.64 lakhs whereas the actual claims made by Banks/FIsand admittedby Resolution Professional is Rs.627652.66 lakhs.

{iii) The Trade receivable could not be verified as the confirmation ofbalances have not been received and made available to us. The company's Trade Receivablesaggregating to Rs.69344.06 Lakhs is more than three years old. The company has notprovided any bad debts in the books of account during the quarter. We are unable to forman opinion on the extentto which the debts may be recoverable.

(iv) The Loans & advances could not be verified as the confirmationof balances have not been received and made available to us. The company's loans andadvances aggregating to Rs.l0351.73Lakhs is more than three years old. The company hasnot provided any bad debts in the books of account during the quarter. We are unable toform an opinion on the extentto which the debts may be recoverable.

(v) The Company's Capital advances to the extent of Rs. 5005.16 LakhsWe are unable to ascertain whether such balances are fully recoverable. Accordingly weare unable to ascertain the impact if any that may a rise in case any of these advancesare subsequently determined to be doubtful of recovery. Had the Company provided for thesame the loss forthe period would have been higher by the said amount.

(vi) The Company has an advance of Rs.477.29 lakhs are more than 365days old and hence shall be treated as Deposits received under the Companies Act 2013 andthe same has to be returned within one year as per the provisions of the Act.

(vii) With regard to investments in unquoted equities of subsidiary'sfor a value of Rs. 5046.93 lakhs are valued at cost of investment however the presentrealizable value of these are not ascertained by the management hence the same issubjectto current valuation.

(viii) A winding up petition filed by Standard Bank {Mauritius) Ltd.in the High Court of Telangana&Andhra Pradesh against the company for giving corporateguarantee for loan extended by the said bank to the step down subsidiary OptimixEnterprises Limited for Rs. 4087.50 lakhsis still pending.

(ix) The Company is not regular in payment of undisputed statutory duestowards ESI Provident Fund TDS and Goods & Service Tax during the year ended 31stMarch 2020.

(x) Bank Statements were not made available with the Company for allthe Banks except that of Vizag Branch. Interest ca Iculations are on the basis of the lastinterest rates on the outstanding balances.

(xi) The GST Returns are yet to be reconciled for all the Branchesexcept Vizag branch as GST returns are yet to be filed by the company.

(xii) On accountoftheCOVID-19 related lock-down restrictions we werenot able to physically observe the verification of inventory that was carried out by theManagement. Consequently we have performed alternate procedures to audit the existence ofInventory as per the guidance provided by in SA 501 "Audit Evidence - SpecificConsiderations for Selected Items" and have obtained sufficient audit evidence toissue our unmodified opinion on these Standalone Financial Results.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143{3)oftheAct we reportthat:

{a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief werenecessaryforthepurposesofouraudit.

(b) In our opinion proper books of account as required by law relatingto preparation of the standalone financial statements have been kept by the Company so faras it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss and the CashFlow Statement dealt with by this Report are in agreement with the books of accountmaintained for the purpose of preparation of these standalone financial statements.

(d) In our opinion the aforesaid standalone financial statementscomply with the Accounting Standards specified under Section 133 of the Act asapplicable.

(e) On the basis of the written representations received from theDirectors as on March 31 2020 taken on record by the Board of Directors none of theDirectors is disqualified as on March 31 2020 from being appointed as a Director in termsof Section 164 {2) of the Act.

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in 'Annexure A'. Our report expresses an unmodified opinionon the adequacy and operating effectiveness of the Company's internal financial controlsoverfinancial reporting.

(g) With respect to the other matters to be included in the IndependentAuditors' Report in accordance with Rule 11 of the Companies {Audit and Auditors) Rules2014 in our opinion and to the best of our information and according to the explanationsgiven to us:

i) The Company has not disclosed the impact of pending litigations onits financial position in its standalone financial statements.

ii) The Company did nothave any long-term contracts includingderivative contracts for which there were any material foreseeable losses andthe Companyis showing contingent liability.

iii) There have been no amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

2. As required by the Companies {Auditor's Report) Order 2016 {'theOrder') issued by the Central Government in terms of Section 143(11) of the Act we givein 'Annexure B' a statement on the matters specified in paragraphs 3 and4oftheOrder.

For T.Raghavendra& Associates
Chartered Accountants
(Firm Regn No:003329S)
T.Raghavendra
Proprietor
Mem No 023806
Date: 30-07-2020
Place: Flyderabad

ANNEXURE 'A' TO THE INDEPENDENT AUDITORS' REPORT

{Referred to in paragraph 1(f) under 'Report on Other Legal andRegulatory Requirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 ofthe Companies Act 2013 ('the Act')

We have audited the internal financial controls over financialreporting of SplendidMetal Products Limited {'the Company') asof March 312020inconjunction with our audit of the standalone financial statements ofthe Company for theyear ended and ason that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal controlover financialreporting criteria established by the Company considering the essential components ofinternal control stated in theGuidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountantsof India {the'Guidance Note'). These responsibilities include the design implementation andmaintenance of adequate internalfinancial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherencetoCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completenessof the accounting records and the timelypreparation of reliable financial information's required underthe Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit.We conducted our audit inaccordance with the Standards on Auditing prescribed under Section 143{10) of the Act andthe GuidanceNote to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that wecomply with the ethical requirementsand plan and perform the audit to obtain reasonable assurance about whetheradequateinternal financial controls over financial reporting was established andmaintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls systemover financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincludedobtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness existsand testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theproceduresselected depend on the auditors' judgment including the assessment ofthe risksof material misstatement ofthe standalone financialstatements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on theCompany's internal financialcontrols system overfinancial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and proceduresthat {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 offinancialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors ofthe company; and {3) provide reasonableassurance regardingprevention or timely detection of unauthorized acquisition use or disposition ofthecompany'sassetsthatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion orimproper management overrideof controls material misstatements due to error or fraud may occur and not be detected.Alsoprojections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk thatthe internal financial controlsover financial reporting may become inadequate because of changes in conditions orthatthe degreeof compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all materialrespects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financialreporting were operating effectively as at March 31 2020 based on theinternal control over financial reporting criteria establishedbythe Company consideringthe essential components of internal control stated in the Guidance Note.

For T. Raghavendra& Associates
Chartered Accountants
(Firm Regn No:003329S)
T.Raghavendra
Date: 30-07-2020 Proprietor
Place: Hyderabad Mem No 023806

ANNEXURE 'B' TO THE INDEPENDENT AUDITORS' REPORT

{Referred to in paragraph 2 under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on Companies (Auditor's Report) Order 2016 ('the Order') issuedby the Central Government in terms ofSection 143(11) of the Companies Act 2013 ('theAct') of Splendid Metal Products Limited ('the Company')

1. In respectoftheCompany'sfixed assets:

(a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixedassets.

(b) The fixed assets were physically verified duringthe year by theManagement in accordance with a regular program ofverification which in our opinionprovides for physical verification of all the fixed assets at reasonable intervals.According to the information and explanations given to us no material discrepancies werenoticed on such verification.

(c) According to the information and explanations given to us and therecords examined by us and based on the examination of the conveyance deed provided to uswe report that the title deeds comprising all the immovable properties of landandbuildings which are freehold are held in the name of the Company as at the balance sheetdate.

2. As explained to us the inventories were physically verified duringthe year by the Management at reasonable intervals and nomaterial discrepancies werenoticed on physical verification.We have relied on the report of M/s MallikarjunaRao andAssociates Chartered Accountants for the physical availability and valuation as attheyear ended 31-03-2020.

3. The Company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or otherparties covered in the registermaintained under Section 189 of the Act.

4. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisionsof Sections 185and 186 of theActin respect of grant of loans making investments and providing guarantees andsecurities asapplicable.

5. The Company has not accepted deposits during the year and does nothave any unclaimed deposits as at March 31 2020andtherefore the provisions of the clause3 (v) of the Order are not applicable to the Company.

6. The Maintenance of Cost Records has been specified by the CentralGovernment under section 148(1) of the Companies Act 2013. We have relied on the Costaudit report submitted by the Cost Auditors of the Company and according to the saidreport the Company has complied with the CompaniesfCost Records and Audit) Rules 2014.

7. According to the information and explanations given to us inrespect of statutory dues:

{a) The Company has not been regular in depositing undisputed statutorydues including Provident Fund Employees'State Insurance Income Tax Sales Tax ServiceTax Value Added Tax duty of Customs duty of Excise Cess GST and other materialstatutory dues applicable to it with the appropriate authorities.

(b) There are no disputed amounts payable in respect of Provident FundEmployees' State Insurance Income Tax Sales Tax Service Tax Value Added Tax duty ofCustoms duty of Excise GST Cess and other material statutory dues in arrears as atMarch 31 2019 fora period of more than six months from the date they became payableexcept as detailed below:

Outstanding
> 6 months
Particulars Rs. In lakhs
T.D.S 1.7
Service tax 1.93
Income Tax (Corporate Dividend Tax) 2.64
Total 6.27

(c) Details of dues of Income Tax Sales Tax Customs and ExciseDuty Foreign Exchange Management Act and Value Added Tax which have not been deposited asat March 312020 on account of dispute are given below:

Disputed Statutory dues as on 31.03.2020

Name of the Statute Amount

Period to which the amount relates (FY)

Forum where dispute is pending

Rs. in Lakhs
Income Tax Act 1961 1775.45 2006-2015 Income Tax Appellate Tribunal
Central Excise Act 1944 2045.10 1997-2013 Commissioner (Appeals) Chennai Chennai Hon'ble High Court of Chennai Hon'ble High Court of Delhi Hon'ble Supreme Court of lndia( Dept.Appeals
Customs Act 1962 792.45 1999-2012 Commissioner (Customs) Sea Port Chennai Hon'ble High Court of Chennai Vommissioner (Appeals) Vizag and Hon'ble Supreme Court of India (Dept.Appeals).
Foreign Exchange Management Act 1999 400 1995-1996 Hon'ble High Court of Delhi
APGST ACT 1957 438.13 2002-2003 Hon'ble High Court of Delhi
Central Sales Tax Act 1956 241.34 2006-2007

Sales Tax Appellate Tribunal Commercial Tax Officer

42.68 2007-2008
Tamilnadu Value Added Tax Act 2006 9891.65 2006-2008 Appellate Dpty. Commissioner Hon'ble High Court of Andhra Pradesh.
CST (IN) 2383.64 2008-2015 Hon'ble High Court of Tamilnadu and TN Sales Tax Authorities.

8. In ouropinion and accordingtothe information and explanations givento us the Company has defaulted in the

repayment of loans or borrowings to banks. The detail of the default isgiven below:

Details of Overdues to Banks/Financial Institutions as on 31.03.2020.

Bank name Total
Andhra Bank 7590.24
Bank of Baroda 10435.14
Bank of India 48890.98
IDBI Bank 3790.65
Indian Bank 7549.56
Indian Overseas Bank 28957.80
Edelweises ARC Ltd (KBL) 6228.68
Lakshmi Vilas Bank 8592.47
Oriantal Bank of Commerce 7951.13
Punjab National Bank 68475.92
State Bank of India 32041.24
SASF 12286.82
Gopalka Savings Investments Pvt Ltd-USL 70
Total: 242860.64

9. The Company has not raised moneys by way of initial public offer orfurther public offer {including debt instruments) ortermloans and hence reporting underclause 3 (ix) of the Order is not applicable.

10. To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company and no fraud on the Company by itsofficers or employees has been noticed or reported duringtheyear.

11. In ouropinion and accordingtothe information and explanations givento us the Company has paid / provided managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with ScheduleVtotheAct.

12. The Company is not a Nidhi Company and hence reportingunderclause3{xii)ofthe Order is not applicable.

13. In ouropinion and according to the information and explanationsgiven to us the Company is in compliance with Section 177and 188 of the Act whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

14. Duringtheyear the Company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures and hencereporting under clause 3{xiv) of the Order is not applicable to the Company.

15. In ouropinion and according to the information and explanationsgiven to us during the year the Company has not enteredinto any non-cash transactionswith its Directors or persons connected to its Directors and hence provisions of Section192 of theAct are not applicable.

16. The Company is not required to be registered under Section 45-1 ofthe Reserve Bank of India Act 1934.

ForT. Raghavendra & Associates
Chartered Accountants
(Firm Regn No:003329S)
T.Raghavendra
Proprietor
Mem No 023806
Date: 30-07-2020
Place: Hyderabad

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