To the Members of
SYBLY INDUSTRIES LIMITED
REPORT ON THE AUDIT OF STANDALONE FINANCIAL STATEMENTS
1. We have audited the accompanying financial statements of "Sybly IndustriesLimited" which comprise the Balance Sheet as at March 31 2020 and the Statement ofProfit and Loss for the period 1st April 2019 to 31st March 2020 the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and 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 financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India including Indian Accounting Standards (IndAS') specified under Section 133 of the Act
a) In the case of the Balance Sheet of the state of affairs of the Company as at March31 2020; b) In the case of the Profit and Loss Account of the Profit for the periodended on that date and c) In the case of Cash Flow Statement for the cash flows for theyear ended on that date. d) And the changes in equity for the year ended on that date.
Basis for Opinion
2. 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 Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to going Concern
3. We draw attention to Note 21 which indicates that the company has a ContingentLiability of more than Rs. 15.20 Crore as on 31.03.2020 and as that date company has anet worth of Rs. 11.48 Crore. The company's contingent liabilities exceeds its net worthas on 31.03.2020 These conditions along with other matters indicates that if theContingent Liability stands payable then there is the existence of a material uncertaintythat may cast significant doubt about the Company's ability to continue as a goingconcern. However the management is of the opinion that the demand so raised is in disputeand appropriate appeals have been filed by the company. In view of the mitigating factorsas fully described in the aforesaid note that company the management is of the view thatthe going concern basis of accounting is appropriate.
Our opinion is not modified in respect of this matter.
Key Audit matters
4. 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.
Information other than the financial statements and auditors' report thereon
5. 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 Business Responsibility Report but does notinclude the financial statements and our auditor's report thereon. Our opinion on thefinancial statements does not cover the other information and we do not express any formof assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the Standalone Financial Statements
6. The company's Board of Directors are responsible for the matters in Section 134(5)of the Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the Accounting Principlesgenerally accepted in India including Accounting Standards specified in under section 133of the Act. This responsibility includes the maintenance of adequate accounting records inaccordance with the provision of the act for safeguarding the assets of the company andfor preventing and detecting the frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgment and estimates arereasonable and prudent and design implementation and maintenance of internal controlthat were operating efficiently for ensuring the accuracy and completeness of accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible for assessing thecompany's ability to continue as a going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to cease theoperations or has no realistic alternative but to do so the Board of Directors are alsoresponsible for overseeing the financial reporting process.
Auditor's Responsibility for the Audit of Standalone Financial Statements
7. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control. Obtain anunderstanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls Evaluate the appropriateness of accounting policies usedand the reasonableness of accounting estimates and related disclosures made by management.Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern. Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation. 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 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.
Report on Other Legal and Regulatory Requirements
8. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of subsection (11) of Section 143 ofthe Act we give in the Annexure-A a statement on the matters specified in paragraphs 3& 4 of the Order to the extent applicable.
9. 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 purpose of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books
c) The standalone financial statements dealt with by this Report are in agreement withthe books of accounts.
d) In our opinion the aforesaid standalone financial statements comply with Ind ASspecified under Section 133 of the Companies Act 2013.
e) On the basis of written representations received from the directors as on March 312020 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of section 164(2) of theAct.
f) With respect to the adequacy of internal financial controls over financial reportingof the Company and the operating effectiveness of such controls refer to our separatereport in "Annexure B"; and
g) With respect of 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 the information and according to the explanations given to us: i. theCompany as detailed in Note 21 to the financial statements has disclosed the impact ofthe pending litigations on its financial position. ii. the Company did not have anylong-term contracts including derivatives contracts for which there were any materialforeseeable losses. iii. there were no amounts which required to be transferred toInvestor Education and Protection Fund.
ANNEXURE - A
Annexure to the Independent Auditor's Report to the members of Sybly Industries Limitedon the accounts of the Company for the year ended 31st March 2020
On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of our audit we report that:
(i) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.
(b) We are informed by the management that they have physically verified the fixedassets at reasonable intervals during the year. No material discrepancies were noticed onsuch verification.
(c) According to the information and explanations given to us and on the basis of ourexaminations of the records of the Company the title deeds of immovable properties areheld in the name of the company.;
(ii) (a) The inventories of the company at all its locations (except stocks lying withthird parties and in transit confirmation/subsequent receipts have been obtained inrespect of such inventory) have been physically verified by the management during the yearat reasonable intervals. (b) The Company is maintaining proper records of Inventory. Thediscrepancies between the physical stocks as compared to book records were not material.
(iii) The Company has not granted any Loans secured or unsecured to Companies FirmsLimited Liability Partnership or Other Parties covered in the Register maintained underSection 189 of the Companies Act 2013 (the Act). Accordingly paragraph 3(iii) (a) (b)& (c) of the Order are not applicable to the Company.
(iv) The company has not advanced any loan or made investment to its directors or anyother person in whom the directors are interested. Hence provisions of section 185 &186 of the Companies Act 2013 are not applicable.
(v) In our opinion and according to the information and explanations given to us TheCompany has not accepted any deposits from the public covered under Section 73 to 76 ofthe Companies Act 2013.
(vi) As informed by the management the books of account relating to materials labourand other items of cost maintained by the company pursuant to the Rules made by theCentral Government for the maintenance of cost records under Section 148 of the CompaniesAct 2013 are maintained. We have however not made a detailed examination of the saidrecords with a view to determine whether they are accurate or complete as the company isgetting a cost audit conducted from a qualified person in this regard and will submit CostAudit Report to the Central Government.
(vii) (a) The company is regular in depositing with appropriate authorities undisputedstatutory dues including Provident Fund Employees State Insurance Investor EducationProtection Fund Income Tax Sales Tax Wealth Tax Service Tax Custom Duty Excise DutyCess Value Added Cess and other material statutory dues applicable to it.
According to the information and explanation given to us no undisputed amounts payablein respect of statutory dues including Provident Fund Employees State Insurance InvestorEducation Protection Fund Income Tax Sales Tax Wealth Tax Service Tax Custom DutyExcise Duty Cess Value Added Cess and other material statutory dues applicable to itwere in arrears as at 31st March 2020 for a period of more than six months from the datethey became payable.
(b) According to the information and explanation given to us there are no dues ofSales Tax Custom Duty Wealth Tax Service Tax Excise Duty GST and Cess which have notbeen deposited on account of any dispute other than the given below:-
|Sr. No. Nature of Statue ||Nature of Dues / Period ||Forum where dispute is pending ||Amount |
|1. The Income Tax Act 1961 ||Demand for the Assessment Year 2017-18 ||Commissioner of Income Tax (Appeal) ||Rs. 48246341/- (Including Interest) |
|2. Securities and Exchange Board of India Act ||Non-compliances regarding Public Issue of GDR by the Company in the FY 2008-09 ||Securities Appellate Tribunal (SAT) Mumbai ||Rs. 10.30 Crore |
(viii) In our opinion and according to the information and explanations given to usthe company has not defaulted in repayment of dues to a financial institution bankGovernment or debenture holders.
(ix) The company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year ended 31.03.2020 and during theyear no term loan has been availed by the company.
(x) According to the information and explanations given to us no fraud on or by thecompany has been noticed or reported during the course of our audit.
(xi) The company has paid Managerial remuneration to its Whole Time Directors withinthe limits prescribed under section II of Part II of Schedule V of the Companies Act2013 hence no approval is required under section 197 of the Companies Act 2013 fromCentral Government for payment of such remuneration.
(xii) In our opinion the company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the Companies (Auditor's Report) Order 2016 are not applicable to thecompany.
(xiii) According to the information and explanations given to us and on the basis ofour examinations of the records of the Company transactions with the related parties arein compliance with Sections 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the Financial Statements as required by the applicableaccounting standards.
(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.
(xv) According to the information and explanations given to us and on the basis of ourexaminations of the records of the Company the company has not entered into any non-cashtransactions with directors or persons connected with him.
(xvi) The company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
Place: MEERUT Dated: 30th July 2020
ANNEXURE - B TO THE INDEPENDENT AUDITORS' REPORT
To the Members of
SYBLY INDUSTRIES LIMITED
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 "SyblyIndustries Limited" as of 31st March 2020 in conjunction with our audit of thestandalone Ind AS financial statements of the Company for 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 issued by ICAI and deemedto be prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing 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 judgment 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 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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 31 March 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
Place: MEERUT Dated: 30th July 2020