Vaswani Industries Ltd.
|BSE: 533576||Sector: Metals & Mining|
|NSE: VASWANI||ISIN Code: INE590L01019|
|BSE 00:00 | 16 May||18.95||
|NSE 00:00 | 16 May||18.80||
|Mkt Cap.(Rs cr)||57|
|Mkt Cap.(Rs cr)||56.85|
Vaswani Industries Ltd. (VASWANI) - Auditors Report
Company auditors report
THE MEMBERS OF
VASWANI INDUSTRIES LTD. RAIPUR
Report on the audit of the Standalone Financial Statements
We have audited the standalone financial statements of VASWANIINDUSTRIES LTD. (the Company) which comprise the standalone Balance Sheet asat 31 March 2020 and the standalone Statement of Profit and Loss (including othercomprehensive income) the standalone Statement of Changes in Equity and standaloneStatement of Cash Flows ended on that date and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information(hereinafter referred to as the standalone financial statements).
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 accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2020and profit and other comprehensive income changes in equity and its cash flows for theyear ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statement inaccordance with the Standards on Auditing (SAs) specified under Section143(10) of the Act. Our responsibilities under those SAs are further described in theAuditor's Responsibilities for the Audit of the standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made there under 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 opinion.
Emphasis of Matters
We draw attention to the following matters in the notes to thestandalone financial statements:-
(i) Note No. 27 (a) to the standalone financial statements whichdescribes regarding certain disclosures relating to SSI Enterprises.
(ii) Note No. 27 (b) to the standalone Financial statements whichdescribes regarding certain disclosures relating to Micro/Small/Medium Enterprises
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements of thecurrent year. These matters were addressed in the context of our audit of the FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
The Company's management and Board of Directors are responsiblefor the other information. The other information comprises the information included in theCompany's annual report but does not include the standalone financial statements andour auditors' report thereon. Our opinion on the standalone financial statements doesnot cover the other information and we do not express any form of assurance conclusionthereon. In connection with our audit of the standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information; we are required to report that fact. We have nothing to report inthis regard.
Management's Responsibility for the Financial Statements
The Company's management and Board of Directors are responsible for thematters stated in Section 134(5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the state of affairsprofit / loss (including other comprehensive income) changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements 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 and Boardof Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so. Board ofDirectors is also responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the FinancialStatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment 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 inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls with reference to financial statements inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditors' report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order2016(the Order) issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the Annexure A' astatement on the matters Specified in paragraphs 3 and 4 of the Order to the extentapplicable.
2. As required by section 143(3) of the Act we report that:
a) We have sought & obtained all information and explanations whichto the best of 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 beenkept 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 othercomprehensive income statement of changes in equity and the cash flow statement dealtwith this report are in agreement with the books of accounts; d) In our opinion theaforesaid financial statements comply with the Indian Accounting Standards specified underSection 133 of the Act.
e) On the Basis of written representations received from the Directorsas on March 31st 2019 and taken on record by Board of Directors two Directors are Mr.Ravi Vaswani & Pawan Kumar Jha are disqualified as on March 31st 2019 from beingappointed as a Director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the Internal financial controls overfinancial reporting of the company and the operating effectiveness of such controls referto our separate report in Annexure B' to this report.
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)Rules 2014 In our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements refer Note No. 29 to the financialstatements.
ii. The Company did not have any long-term contracts includingderivatives contracts for which there were any material foreseeable losses.
iii. There were no amounts which required to be transferred to theInvestor Education and Protection Fund by the Company. h) With respect to the matter to beincluded in the Auditors' Report under section 197(16):
In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act.
ANNEXURE A TO THE AUDITORS' REPORT
[Referred to in paragraph 1 under Report on Other Legal andRegulatory Requirements of our Report of even date to the members of VASWANIINDUSTRIES LTD. On the accounts of the company for the year ended 31stMarch2020]
On the basis of such checks as we considered appropriate and accordingto the information and Explanations given to us during the course of our audit we reportthat: (i) In respect of its fixed assets:
b) The major assets have been physically verified by the management ona sample basis during the year and in our opinion the frequency of verification isreasonable having regard to the size of the company and the nature of its assets. Asinformed to us no material discrepancies noticed on such verification.
c) We have inspected the original title deeds of immovable propertiesof the company held as fixed assets which are in the custody of the company. We haveobtained third party confirmations in respect of immovable properties of the company heldas fixed assets which are in the custody of third parties such as mortgages. Based on ouraudit procedures and the information and explanation received by us we report that alltitle deeds of immovable properties of the company held as fixed assets are held in thename of the company. However we express no opinion on the validity of the title of thecompany to these properties.
(ii) As explained to us and according to the information provided bythe management the inventory has been physically verified at reasonable interval duringthe year by the management. The discrepancies noticed on verification between physicalstock and book stocks wherever ascertained were not significant and have been properlydealt in the books of the accounts.
(iii) In our opinion and according to the information and explanationsgiven to us the Company has not granted any loan secured or unsecured to companiesfirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013. Accordingly the provisions of clause 3 (iii)(a) (b) and (c) of the Order are not applicable and hence not commented upon.
(iv) In our opinion and according to the information and explanationgiven to us the company has complied with the provisions of section 185 and 186 of theact with respect to the loans and investments made .The company has neither issued anyguarantee nor has provided any security on behalf of any party.
(v) In our opinion and according to the information and explanationgiven to us the Company did not receive any deposits covered under section 73 to 76 ofthe company Act and rules framed there under with regards to deposits accepted from thepublic during the year.
(vi) We have broadly reviewed the cost records maintained by theCompany pursuant to the Rules made by the Central Government under Section 148(1) of theCompanies Act 2013 and are of the opinion that prima facie the prescribed cost recordshave been made and maintained. We have however not made a detailed examination of theseaccounts & records with a view to determining whether they are accurate or complete.
(vii)In respect of statutory dues:
a) According to the information and explanations given to us and on thebasis of our examination of the records of the company amounts deducted / accrued in thebooks of accounts in respect of undisputed statutory dues including provident fundEmployee State Insurance income tax sales tax service tax duty of Excise duty ofcustoms value added tax cess and other material statutory dues have been regularlydeposited during the year by the company with the appropriate authorities. According tothe information and explanations given to us no undisputed amounts payable in respect ofprovident fund income tax sales tax service tax duty of customs value added tax cessand other material statutory dues were in arrears as at 31st March 2020 for a period ofmore than six months from the date they became payable. b) However as per records andaccording to the information and explanation given to us the following dues of sales taxwealth tax custom duty excise duty vat have not been deposited by the company with theconcerned authorities on account of dispute :-
(viii) According to the information & explanations given to us theCompany has not defaulted in repayment of the dues to financial institutions or banks ordebenture holders.
(ix) Based on the information and explanations given to us and recordsof the company examined by us the company has not raise money by way of further publicoffer (including debt instruments) and term loans during the year.
(x) According to the information and explanations given to us nomaterial fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the course of our audit.
(xi) According to the information and explanations given to us andbased on our examination of the records of the company the company has paid / providedfor the managerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with schedule V of the act.
(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company. Accordingly clause 3 (xii) of the Orderare not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given to us andbased on our examination of the records of the company the transactions with the relatedparties are in compliance with Section 177 & 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statement as required byapplicable accounting standards wherever required.
(xiv) According to the information and explanations given to us andbased 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 hence reporting under paragraph 3(xiv) of the Order is notapplicable.
(xv) According to the information and explanations given to us andbased on our examination of the records of the company the Company has not entered intoany non-cash transactions with directors or persons connected with him as referred to inSection 192 of the Companies Act 2013. Accordingly clause 3 (xv) of the order is notapplicable to the Company and hence not commented upon.
(xvi) According to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.
ANNEXURE B TO THE AUDITORS' REPORT
[Referred to in paragraph 2 (F) under Report on Other Legal andRegulatory Requirements of our Report of even date to the members.
Report on the Internal Financial Controls under Clause (i) ofsub-section 3 of Section 143 of the Companies Act 2013 ('the Act')
We have audited the internal financial controls over financialreporting of VASWANI INDUSTRIES LTD. (`the Company') as of 31 March 2020 in conjunctionwith our audit of the 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 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 and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as Required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (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 were established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors' judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols with reference to standalone financial statement.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of standalone 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) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of theCompany are being made only in accordance with authorizations of the Management anddirectors of the Company; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the Company's assets thatcould have a material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2020 based onthe internal financial 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.