THE MEMBERS OF STANDARD INDUSTRIES LIMITED Report on theStandalone IND AS Financial Statements Opinion
We have audited the accompanying standalone financial statementsof STANDARD INDUSTRIES LIMITED ("the Company") which comprise theBalance Sheet as at March 31 2020 the Statement of Profit and Loss (including othercomprehensive loss the Statement of cash flows and the Statement for changes in equityfor the year then ended and a summary of the significant accounting policies and otherexplanatory information (herein after referred to as "Standalone IND AS FinancialStatements") 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 Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020the loss and total comprehensive loss changes in equity and its cash flows for the yearended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statement inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theCompanies Act 2013. Our responsibilities under those Standards are further described inthe Auditor's Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued byThe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.
We draw your attention to the Note no. 4A (vii) of the standalonefinancial statements which describes the management's assessment of the impact of theoutbreak of Coronavirus (Covid-19) on the business operations of the company. The Companyhas considered the possible effects that may result from the pandemic relating to COVID-19on the carrying amounts of receivables unbilled revenues and investment in subsidiaries.In developing assumptions relating to the possible future uncertainties in the globaleconomic conditions because of this pandemic the Company as at the date of approval ofthese financial statements has used internal sources of information including creditreports and related information economic forecasts. The impact of COVID 19 on theCompany's financial statements may differ from that estimated at the date of approval ofthese financial statements. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the standalone financial statements ofthe current period. 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.
Description of Key Audit Matters as follows:-
|The Key Audit Matters ||How the matter was addressed in our Audit |
|a. Adoption of Ind AS 115 Revenue From Contracts with Customer || |
|As described in Note No. (2.4) & Note No. (27) To the standalone financial statements The company adopted Ind AS 115 - Revenue from Contracts with ||We Assessed the company's process to identify the impact of adoption of the new accounting standard. |
|Customers which is a new revenue accounting standard. The application and transition to this accounting standard is complex and is an area of focus in the audit. ||Our Audit Approach consisted testing of design and operating effectiveness of the internal controls and substantive testing as follows : |
| || Selected a sample of contracts and performed a retrospective review of efforts incurred with estimated efforts to identify significant variances and verify whether those variations have been considered in estimating the remaining efforts to complete the contract. |
| || Performed analytical procedures and test of details for reasonableness of incurred and estimated efforts. |
|b. Diminution in Value of Investment in Subsidiary Company || |
|We draw Attention to Note No. (44) of financial statements regarding Investment in subsidiary company Standard Salt Works Limited. ||We assessed that in view of the long term strategic nature of the Investment in lease hold rights to salt pans and growth prospect of subsidiary business no provision for diminution in value of Investment is considered necessary at this stage. |
|c. Evaluation of Uncertain Tax Positions || |
|The company has material uncertain tax positions including matters under disputes which involves significant judgement to determine the possible outcome of these disputes ||We obtained details of completed tax assessments and demands upto March 31 2020 from management. |
| Refer Note No. (40) of the financial statements ||We discussed with appropriate senior management and evaluated management's underlying key assumptions in estimating the tax provisions and; |
| ||Assessed management's estimate to the possible outcome of the disputed cases. |
Information Other than the Standalone Financial Statements andAuditor's Report Thereon
The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report including Annexures toBoard's Report Business Responsibility Report Corporate Governance and Shareholder'sInformation but does not include the standalone financial statements and our auditor'sreport thereon.
Our opinion on the standalone financial statements does not coverthe other information and we do not express any form of assurance 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 that thereis a material misstatement of this other information; we are required to report that fact.We have nothing to report in this regard.
Management's Responsibility for the Standalone FinancialStatements
The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these Ind AS standalone financial statements that give a true and fairview of the financial position financial performance including other comprehensive losscash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act read with relevant rules issued thereunder. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 Ind AS financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error. In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. The Board of Directors are alsoresponsible for overseeing the company's financial reporting process.
Auditor's Responsibility for the Audit of the FinancialStatements
Our objectives are to obtain reasonable assurance about whetherthe financial statements as a whole are free from material misstatement whether due tofraud or error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone financial statements. As part of an auditin accordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
Identify and assess the risks of material misstatement ofthe standalone financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal financial controlsrelevant to the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies usedand the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. we are required to drawattention in our auditor's report to the related disclosures in the standalone financialstatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and contentof the standalone financial statements including the disclosures and whether thestandalone financial statements represent the underlying transactions and events in amanner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements. Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statementthat we have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards. From the matterscommunicated with those charged with governance we determine those matters that were ofmost significance in the audit of the standalone financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in our auditor'sreport unless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. 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 best of ourknowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by lawhave been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss(including other comprehensive loss) changes in equity and Statement of Cash Flow dealtwith by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements complywith the Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014.
(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 financialcontrols over financial reporting of the Company and the operative effectiveness of suchcontrols refer to our separate Report in "Annexure A". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.
(g) With respect to the other matters to be included in theAuditor's 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 disclosed the impact of pending litigation on itsfinancial position in its standalone Ind AS financial statements refer note no (40) to thefinancial statements.
(ii) The Company has made provision as required under applicablelaw or accounting standards for material foreseeable losses if any on long term contractsincluding derivative contracts. (iii) There has been no delay in transferring amountsrequired to be transferred to the Investor Education 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) ofthe Act we give in "Annexure B" a statement on the matter specified in theparagraph 3 and 4 of the Order.
3. The company has provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V of the act.
For Arunkumar K. Shah & Co
Arunkumar K. Shah
Membership No: 34606.
UDIN : 20034606AAAABW4511
Place: Mumbai Dated: 30th June 2020
ANNEXURE"A"TO THE INDEPENDENT AUDITOR'S REPORT
Referred in paragraph 1(f) under "Report on Legal andRegulatory Requirement" section of our report of even date on the Standalone Ind ASFinancial Statement Of Standard Industries Limited
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013
1. We have audited the internal financial controls overfinancial reporting of Standard Industries Limited (the "Company") as ofMarch 31 2020 in conjunction with our audit of the standalone Ind As financial statementsfor the year ended on that date.
2. Management's Responsibility for Internal FinancialControls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by The Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
3. Auditors' Responsibility
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We have conductedour audit in accordance with the Guidance Note on Audit of Internal Financial ControlsOver Financial Reporting (the" Guidance Note") and the Standards on Auditingissued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls both applicableto an audit of Internal Financial Controls and both issued by the ICAI. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects to the extent applicable. Our audit involvesperforming 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 judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.
4. Meaning of Internal Financial Controls over FinancialReporting
A company's internal financial control over financial reportingis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2)provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements 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 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.
5. Inherent Limitations of Internal Financial Controls overFinancial Reporting
Because of the inherent limitations of internal financialcontrols over financial reporting including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols over financial reporting to future periods are subject to the risk that theinternal financial control over financial reporting may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
In our opinion the Company has in all material respects anadequate internal financial controls system over financial reporting and such internalfinancial controls over financial reporting were operating effectively as at March 312020 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by TheInstitute of Chartered Accountants of India.
For Arunkumar K. Shah & Co Chartered Accountants
FRN: 126935W Arunkumar K. Shah Proprietor
Membership No:034606 UDIN : 20034606AAAABW4511
Place: Mumbai Dated: 30th June 2020
(i) In respect of Property Plant and Equipment:
(a) According to the information and explanations given to usthe company has updated its property plant and equipment records showing fullparticulars including quantitative details and situation of fixed assets.
(b) The property plant and equipment were physically verifiedduring the year by the management in accordance with a regular programme of verificationwhich in our opinion provides for physical verification of all the fixed assets atreasonable intervals. According to the information and explanation given to us nomaterial discrepancies were noticed on such verification.
(c) According to information and explanations provided to us andbased on our examination the title deeds of immovable property are held in the name ofthe company.
(ii) In respect of Inventories:
As explained to us inventory has been physically verified duringthe year by the management and no material discrepancies were noticed on physicalverification.
(iii) In respect of Granting of Loan:
According to the information and explanations given to us theCompany has not granted any loan to any party covered in the register maintained u/s 189of the Companies Act 2013 (the "Act"). Thus the clause relating to terms andconditions of grant of loan repayment of principal and interest and amount overdue arenot applicable to the company.
(iv) In our opinion and according to information and explanationsprovided to us the company has not granted any loan made any investment given anyguarantee or provided any securities covered undersection 185 and 186 of the Act duringthe year under review.
(v) In our opinion and according to the information andexplanations given to us the Company has not accepted any deposits from the public withinthe meaning of section 73 to 76or any other relevant provision of the Act and the ruleframed there under during the year. No order has been passed by Company Law Board orNational Company Law Tribunal or Reserve Bank of India or any Court or any Tribunal.
(vi) Reporting under clause 3 (vi) of the Order is not applicableas the Company's business activities are not covered by the Companies (Cost Records andAudit) Rules 2014.
(vii) In respect of Statutory dues:
(a) According to the records of the Company the Company isgenerally regular in depositing undisputed statutory dues including provident fundemployees' state insurance income-tax sales-tax service tax duty of customs duty ofexcise value added tax and any other statutory dues with the appropriate authorities.According to the information and explanations given to us there are no arrears ofoutstanding statutory dues as mentioned above as at March 31 2020 for a period of morethan six months from the date they became payable. (b) According to the information andexplanations given to us there are no dues of value added tax service tax duty ofcustoms Goods and Services Tax Act outstanding on account of any dispute except asmentioned below:
|Name of the Statute ||Nature of Dues ||Financial Year ||Forum where matter is pending ||Amount (Rs. in Lakhs) |
|Central Excise Act 1944 ||Excise Duty ||1996 1997 to 1998 - 1999 ||Commissioner of Central Excise ||106.93 |
| || ||1995 1996 to 1997 - 1998 ||High Court of Bombay ||129.37 |
| || ||1981 - 1982 to 1983 1984 ||Central Excise and Service ||158.33 |
| || ||1983 1984 to 1987 1988 ||Tax Appellate Tribunal || |
| || ||1994 1995 & 1996 1997 to || || |
| || ||1999 - 2000 1996 1997 to ||Assistant/ ||118.81 |
| || ||1997 - 1998 ||Deputy Commissioner of Central Excise || |
(viii) According to the information and explanations given to usand based on the documents and records produced to us the company has not defaulted inrepayment of dues to a financial institution or bank. (ix) According to the informationand explanations given to us the term loans were applied for the purpose for which theloans were obtained. The company has not raised any moneys by way of further public offer(including debt instruments).
(x) Based on the audit procedures performed and information andexplanations given by the management we report that no fraud on the company by itsofficers or employees or by the Company have been noticed or reported during the year.
(xi) According to the information and explanations given to usand based on our examination of the records of the company the company has paid /provided for managerial remuneration in accordance with the requisite approvals mandatedby the provisions of section 197 read with schedule V to the Act.
(xii) In our opinion and according to the information andexplanations given to us the Company is not a Nidhi company. Accordingly paragraph3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to usand based on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act wherever applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.
(xiv) According to the information and explanations give to usand based on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.
(xv) According to the information and explanations given to usand based on our examination of the records of the Company the Company has not enteredinto non-cash transactions with directors or persons connected with him. (xvi) In ouropinion and according to the information and explanations given to us the Company is notrequired to register under section 45-IA of the Reserve Bank of India Act 1934.
For Arunkumar K. Shah & Co
FRN: 126935W Arunkumar K. Shah
Place: Mumbai Dated: 30th June 2020