TO THE MEMBERS OF
STANROSE MAFATLAL INVESTMENTS AND FINANCE LIMITED
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of Stanrose MafatlalInvestments and Finance Limited ("the Company") which comprise the BalanceSheet as at March 31 2021 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year ended on that date and notes to the standalone financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (hereinafter referred to as "the Act") in the mannerso required and give a true and fair view in conformity with the Indian AccountingStandards prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended (hereinafter referred to as "IndAS") and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2021 the loss and total comprehensive incomechanges in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (hereinafter referred toas "SAs"). 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 (hereinafter referred to as"ICAI") together with the ethical requirements that are relevant to our audit ofthe standalone financial statements under the provisions of the Act and the Rules madethereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe standalone financial statements.
Emphasis of Matter
We draw attention to Note no. 33 to the Financial Statements in respect of not givingeffect of amalgamation in the books of accounts due to pending approval of NCLT. Ouropinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Sr. No. Key Audit Matter ||Auditor's Response |
|1 Fair Valuation of Investments in equity shares of listed companies and recognition of gain thereon due to fair valuation. || |
|The Company's investments in equity shares of listed companies are measured at fair value at each reporting date and fair value measurements of such investments significant impact the Company's results. The said investments are of Rs. 3212.26 lacs which constitute 54 % of the Company's total assets as at March 31 2021. ||We have assessed the Company's process to compute the fair value of investments in equity shares of listed companies and recognition of gain thereon due to such fair valuation. For such investments we have independently obtained market quotations and recalculated the fair valuations and gain thereon. |
|We identified valuation of investments in equity shares of listed companies and recognition of gain thereon due to fair valuation as key audit matter because during the year under audit there is a significant increase in fair value of investments and recognition of gain there on due to such fair valuation. || |
|2 Estimation of recoverable amount of loans given and Impairment if requiredthereon (other than loan given to the employees) as at Balance sheet date. || |
|The Company has given loans to the subsidiary company and other company with whom merger process is going on and NCLT order is awaited (borrower companies). The said loans are of Rs. 979.35 lacs which constitute 16% of the Company's total assets as at March 31 2021. ||For estimation of recoverable amount of loans given we have reviewed the memorandum of understanding in respect of advances given for purchase of immovable properties executed by borrower companies as well as latest available valuation reports of such properties. |
|For such loans the company estimates recoverable amount and its impairment provision if required based on the memorandum of understanding in respect of advances given for purchase of immovable properties executed by borrower companies and valuation report of such immovable properties. Based on such valuation reports the company has estimated that no impairment is required on such loans during the year. ||Accordingly no impairment is required during the year. |
|We identified estimation of recoverable amount of loan given and assessment of no impairment required thereon as key audit matter because it involved significant judgement. || |
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 Board'sReport including Annexures to Board's Report and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon. In connection with ouraudit of the standalone financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Management's Responsibility for the Standalone 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 standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud orerror. 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 responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism 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 issufficient 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 in order todesign audit procedures that are appropriate in the circumstances.
Under section 143(3) (i) of the Act we are also responsible for expressing our opinionon whether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management. Conclude on theappropriateness of management's use of the going concern basis of accounting and based onthe audit evidence obtained whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company's ability to continue as a goingconcern. If we conclude that a material uncertainty exists 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 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.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the 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 Act we give in the "Annexure -A" a statement on the matters specified inthe paragraph 3 and 4 of the order.
2. 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 including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) oftheAct.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure - B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
g) With respect to the other 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 beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 as amended in our opinion and to the best of our information andaccording to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financialposition.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
ANNEXURE - A TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)
Report on Companies (Auditor's Report) Order 2016 ('the Order') issued by the CentralGovernment in terms of Section 143(11) of the Companies Act 2013 ('the Act') of StanroseMafatlal Investments and Finance Limited ('the Company')
1. In respect of fixed assets: a. The Company has maintained proper recordsshowing full particulars including quantitative details and situation of fixed assets. b.The fixed assets have been physically verified by the management once in a year which weconsider reasonable having regard to the size of the Company and the nature of its assets.
According to the information and explanations given to us no discrepancies werenoticed on such verification. c. According to the information and explanations given to usand on the basis of our examination of the records of the company the title deeds ofimmovable properties are held in the name of the Company.
2. In respect of Inventories:
The Company does not have any Inventory. Therefore the provisions of clause 3(ii) ofthe Companies (Auditor's Report) Order 2016 are not applicable to the company.
3. In respect of loans granted to parties covered in the register maintained u/s189 of the Act:
The Company has granted loan to one company covered in the register maintained undersection 189 of the Companies Act 2013 ('the Act'). a. In our opinion terms andconditions of the loan were not prejudicial to the interest of the Company b. The scheduleof repayment for the loan has not been stipulated. c. As the terms of the repayment havenot been stipulated there are no overdue amounts in respect of the loan.
4. In respect of compliance of section 185 and 186 of the Act:
In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
5. In respect of deposits:
The Company has not accepted any deposits.
6. In respect of maintenance of cost records:
The Central Government has not prescribed the maintenance of cost records under section148(1) of the Act for any of the services rendered by the Company.
7. In respect of statutory dues: a. According to the information andexplanations given to us and the records of the Company examined by us in our opinionthe Company is generally regular in depositing the undisputed statutory dues includingprovident fund income tax goods and service tax cess and other material statutory duesas applicable with appropriate authorities. As explained to us the Company did not haveany dues on account of duty of customs and employees' state insurance. b. According to theinformation and explanations given to us and the records of the Company examined by us inour opinion no undisputed amounts payable as applicable were in arrears as at March 312021 for a period of more than six months from the date they became payable. c. Accordingto the information and explanations given to us and the records of the Company examined byus there are no dues of income tax goods and service tax cess and other statutory dueswhich have not been deposited on account of any dispute.
8. In respect of dues to financial institutions / banks / debentures:
The Company does not have any loans or borrowings from any financial institutionbanks government or debenture holders during the year. Accordingly paragraph 3(viii) ofthe Order is not applicable.
9. In respect of money raised by way of public offer and application of termloan:
The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and no term loans raised during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.
10. In respect of fraud:
According to the information and explanations given to us no fraud by the Company oron the Company by its officers or employees has been noticed or reported during the courseof our audit.
11. In respect of managerial remuneration in accordance with Section 197 of the Act:
According to the information and explanations give to us and based on our examinationof the records of the Company the Company has paid / provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act.
12. In respect of Nidhi company:
In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
13. In respect of transactions with related parties in compliance of section 177 and188 of the Act and its disclosures:
According to the information and explanations given to us and based on our examinationof the records of the Company transactions with the related parties are in compliancewith sections 177 and 188 of the Act where applicable and details of such transactionshave been disclosed in the standalone financial statements as required by the applicableaccounting standards.
14. In respect of preferential allotment or private placement of shares or debentures:
According to the information and explanations give to us and based on our examinationof the records of the Company the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.
15. In respect of non-cash transactions with directors or persons:
According to the information and explanations given to us and based on our examinationof the records of the Company the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3(xv) of the Order is notapplicable.
16. In respect of company is required to be registered under section 45-IA of theReserve Bank of India Act 1934:
The Company is registered under section 45-IA of the Reserve Bank of India Act 1934.
ANNEXURE-B TO THE INDEPENDENT AUDITOR'S REPORT
The Annexure referred to in Independent Auditor's Report to the members of the Companyon the standalone financial statements for the year ended March 31 2021 we report that:
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 StanroseMafatlal Investments and Finance Limited ("the Company") as of March 312021 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended 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 ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
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 prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively 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 judgment 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 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 financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note.
For Manubhai & Shah LLP
Chartered Accountants ICAI Firm Registration No. 106041W/W100136
| || |
K. B. Solanki
| || |
|Place: Ahmedabad ||[Membership No. 110299] |
|Dated : June 8 2021 || |