To the Members of SWADESHI INDUSTRIES AND LEASING LIMITED
Report on the Audit of the Financial Statements Opinion
We have audited the financial statements of SWADESHI INDUSTRIES AND LEASING LIMITED("the Company") which comprise the balance sheet as at 31st March 2020 thestatement of Profit and Loss statement of changes in equity and statement of cash flowsfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.
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 the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2020and profit/loss changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
Revenue is one of the key profit drivers and is therefore susceptible to misstatementaccuracy of recognition measurement presentation and disclosures of revenues and otherrelated balances in view of adoption of Ind AS 115 "Revenue from Contracts withCustomers".
We assessed the appropriateness of the revenue recognition accounting policiesincluding those relating to discounts by comparing with new revenue accounting standard.
Tested the relevant information technology system's access and change managementcontrols which govern revenue recognition interfaces between different systems and keymanagement controls over revenue recognition to assess the completeness of the revenueentries being recorded in the accounting system.
Tested controls automated and manual around dispatches/deliveries inventoryreconciliations and circularization of receivable balances.
Performed analytical procedures for reasonableness of revenues.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof 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 the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
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 weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
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 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 with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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.
The Company has not assessed and disclosed the economic and social consequences theentity is facing as a result of the pandemic COVID-19 on its operations liquidity etc inthe financial statements. SEBI vide Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/84 had issuedan advisory on disclosure of material impact of COVID-19 pandemic on listed entities underSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 which is notcomplied with.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act we report that:
a) We have sought 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 books of account.
d) In our opinion the aforesaid financial statements comply with the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended.
e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
g) 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 in our opinionand to the best of our information and according 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 were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For Dhawan & Co
(Firm's Registration No.002864N)
M C Gupta
(Membership No. 070834)
Date:30th June 2020
ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements'
section of our report to the Members of SWADESHI INDUSTRIES AND LEASING
LIMITED of even date)
(i) In respect of the Company's fixed assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification that in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.
c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings thatarefreehold are held in the name of the Company as at the balance sheet date.
a) As explained to us the inventories have been physically verified by the managementduring the year at reasonable intervals.
The Company could not conduct the physical verification of inventories for the year-end31st March 2020 due to Government having imposed restrictions during the lockdown onaccount of health travel and safety concerns. The Company's management howeverconducted physical verification of inventories on dates other than the date of financialstatements but prior to the date of the board meeting to be held for the purpose ofadopting the financial results at certain locations (factories and warehouses) and hasmade available the documents in confirmation thereof.
We have performed alternate audit procedures based on documents and other informationmade available to us to audit the existence of inventories.
b) On the basis of our examination the Company has maintained proper records ofinventories and no material discrepancies were noticed on physical verification andrecords maintained by the Company.
(iii) According to the information and explanations given to us the Company hasnotgranted any loans secured or unsecured to companiesfirmsLimited Liability Partnershipsor other parties covered in the register maintained under section 189 of the CompaniesAct 2013. Hence clause (iii) of paragraph 3 of the Order is not applicable to theCompany.
(iv) In our opinion and according to information and explanations given to us theCompany has not advanced loans to Directors/Company in which the director is interested towhich the provisions of Section 185 of the Companies Act 2013 apply and hence notcommented upon. Also in our opinion and according to the information and explanationgiven to us the Company has not made investment
and given guarantee/provided security which falls under the purview of section 186 ofthe Companies Act 2013 and hence not commented upon.
(v) According to the information and explanations given to us the Company has notaccepted deposits during the year and does not have any unclaimed deposits as at 31stMarch 2020 and therefore the provisions of the clause 3 (v) of the Order are notapplicable to the Company.
(vi) As per the information and explanation given to us the maintenance of costrecords specified by the Central Government under sub-section (1) of section 148 of theCompanies Act 2013 is not applicable to the Company and hence not commented upon.
a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident fund Employees' State Insurance Income-tax Goods & Service TaxSales-tax Service Tax Customs duty Excise duty Value Added Tax cess and any othermaterial statutory dues applicable to it with the appropriate authorities.
There were no undisputed amounts payable in respect of Provident fund Employees' StateInsurance Income-tax Goods & Service Tax Sales tax Service Tax Customs dutyExcise duty Value Added Tax cess and any other material statutory dues in arrears as atMarch 31 2020 for a period of more than six months from the date they became payableexcept the following:
|Name of the Statute ||Nature of the Dues ||Amount(Rs.) ||Period to which the amount relates ||Remark |
| ||Income Tax Outstanding Demands ||23110 /- ||A.Y.2008- 09 ||AO notice u/s 154 dated 22/04/2010 |
| ||Income Tax Outstanding Demands ||11820/- ||A.Y. 200910 ||CPC notice u/s 143 (1) (a) dated. 29/12/2010 |
| ||Income Tax Outstanding Demands ||110570/- ||A.Y. 200910 ||CPC notice u/s 143(1)(a) Dated 29/12/2010 |
| ||Income Tax ||32280/- ||A.Y. 2016- ||CPC notice u/s |
|Income Tax Act 1961 ||Outstanding Demands || ||17 ||143(1)(a) dated 22/03/2018 |
| ||TDS Short payment ||17350/- ||Prior Years ||Unpaid Till Date |
| ||TDS Interest on Payments default u/s 201 ||6897/- ||Prior Years ||Unpaid Till Date |
| ||TDS Late Filing Fee u/s234E ||15825/- ||Prior Years ||Unpaid Till Date |
| ||TDS Interest on Deduction default u/s 201 ||102/- ||Prior Years ||Unpaid Till Date |
| ||TDS Interest on Payment default u/s 201 ||6/- ||FY2018-19 ||Unpaid Till Date |
|Maharashtra State Tax on Professions Trades Callings and Employments Act 1975 ||Professional Tax ||3600/- ||FY2019-20 ||Unpaid Till Date |
|SEBI (LODR) Regulations 2015 ||Non-submission of the Annual Report within the period prescribed under this regulation- BASIC FINE ||7080/- ||FY2018-19 ||Unpaid Till Date |
b) According to the information and explanations given to us and based on the auditprocedures conducted by us there are no material dues of any statutory payment which havenot been deposited with the appropriate authorities on account of any dispute.
(viii) According to the information and explanations given to us the Company has nottaken any loans or borrowings from financial institutions banks and government or has notissued any debentures. Hence reporting under clause 3 (viii) of the Orderis not applicableto the Company.
(ix) According to the information and explanations given to us the Company hasnotraised any money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Accordingly paragraph 3(ix) of the Order isnot applicable to the Company and hence not commented upon.
(x) To the best of our knowledge and according to the information and explanationsgiven to us no material fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the year.
SWADESHI INDUSTRIES & LEASING LIMITED
(xi) In our opinion and according to the information and explanations given to us theCompany has provided managerial remuneration in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act 2013.
(xii) In our opinion and according to the information and explanations given to us theCompanyis not a NidhiCompany. Consequentlyprovisions of clause 3(xii) of the Order arenot applicable to the Company and hence not commented upon.
(xiii) In our opinion and according to the information and explanations given to ustransactions with the related parties are in compliance with sections 177 and 188 ofCompanies Act 2013 where applicable and the details of related party transactions havebeen disclosed in the Financial Statements as required by the applicable accountingstandards.
(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review and hence reporting under clause 3(xiv) are not applicable to the Company and hence not commented upon.
(xv) According to the information and explanations given to us during the year theCompany has not entered into any non-cash transactions with its directors or personsconnected with him and hence provisions of section 192 of the Companies Act 2013 are notapplicable to the Company.
(xvi) According to the information and explanations given to us the Companyis notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.
For Dhawan & Co
(Firm Registration No: 002864N)
M C Gupta
(M. No. 070834)
Place : Mumbai
Date : 30th June 2020
ANNEXURE"B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2(f) under Report on Other Legal and Regulatory Requirementssection of our report to the members of SWADESHI INDUSTRIES AND LEASING LIMITED
of even date)
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 SWADESHIINDUSTRIES AND LEASING LIMITED ("the Company") as of March 31 2020 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India.These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of itsbusinessincluding 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 Companies Act 2013.
Our responsibility is to express an opinion onthe Company's internal financial controlsover financial reporting based on our audit. We conducted our audit in accordance withtheGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India andthe Standards on Auditing prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit toobtain reasonable assurance about whether adequate internal financial controlsover financial 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 anunderstanding 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 providereasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally
accepted 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 to the best of our information and according to the explanation 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.
ForDhawan& Co Chartered Accountants
(Firm Registration No.002864N)
M C Gupta Partner
(M. No. 070834)
Place : Mumbai Date :30th June 2020