TO THE MEMBERS OF
M/S SONAHI SONA JEWELLERS (GUJARAT) LIMITED
I. Report on the Financial Statements
1. Opinion
A. We have audited the accompanying Financial Statements of SONA HI SONA JEWELLERS(
GUJARAT) LIMITED ("the Company"), which comprise the Balance Sheet as at March
31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the
Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that
date, and a summary of the significant accounting policies and other explanatory
information.
B. In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid Financial Statements give the information required by the
Companies Act, 2013 ("the Act") in the manner so required and give a true and
fair view in conformity with the Indian Accounting Standards prescribed under section 133
of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended,
("Ind AS") and other accounting principles generally accepted in India, of the
state of affairs of the Company as at March 31, 2023, the profit and total comprehensive
income, changes in equity and its cash flows for the year ended on that date
2. Basis for Opinion
We conducted our audit of the Financial Statements in accordance with the Standards on
Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under
those Standards are further described in the Auditors Responsibilities for the Audit of
the Financial Statements section of our report We are independent of the Company in
accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India (ICAI) together with the independence requirements that are relevant to our audit of
the financial statements under the provisions of the Act and the Rules made thereunder,
and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinion on the
Financial Statements.
3. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the Financial Statements of the current period. These matters
were addressed in the context of our audit of the Financial Statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. We
have determined the matters described below to be the key audit matters to be communicated
in our report.
| The Key Audit matter |
How our audit addressed the key audit matter |
| Existence and Valuation of Inventory: |
As part of our audit procedures: |
| The Company has an inventory balance of Rs.15,75,74,293/- as disclosed note 18 of the
accompanying financial statements, Refer note 23 for the accounting policy adopted by the
management with respect to inventory balance. |
Obtained an understanding of the managements process for physical verification,
recognition and measurement of purchase cost of gold, diamonds and cost of manufactured
jewellery items. |
| With respect to existence of inventory as at year end, there is an inherent risk of
loss from theft or possible mala fide intent, due to the high intrinsic value and portable
nature of individual inventory items. |
Evaluated the design and tested the operating effectiveness of control implemented by
the company with respect to such process including control around safeguarding the high
value of inventory items. |
| In addition to the physical verification performed by the management with the help of
an independent professional gemologist, the lender of company also conduct stock counts,
on regular basis throughout the year. |
Assessed the appropriateness of accounting policy and management valuation methodology
adopted by the management. |
| With respect to valuation of the inventory, the company purchased into the respective
cost categories purchase into the respective cost categories defined by the management
based on price based and other physical characteristics of the diamonds. |
On sample basis, tested invoice and other underlying records to validate the costs and
characteristics basis which the inventory is categorized for inventory management and
valuation. |
| Considering the complexities involved, portable nature of diamonds, high inherent risk
and high level of estimation involved in valuation of inventory, the existence and
valuation of inventory has been determined as key audit matter for the current year audit. |
Consequently, we have performed alternate procedures to audit the existence of
inventory as per the guidance provided in SA 501 "Audit Evidence - Specific
Considerations for Selected Items" and have obtained sufficient appropriate audit
evidence to issue our opinion on these Standalone Financial Results. Our report on the
Statement is not modified in respect of the above matter |
4. Information Other than the Financial Statements and Auditors Report Thereon
A. The Companys Board of Directors is responsible for the preparation of the other
information. The other information comprises the information included in the Management
Discussion and Analysis, Boards Report including Annexures to Boards Report, Business
Responsibility Report, Corporate Governance and Shareholders Information, but does not
include the Financial Statements and our auditors report thereon. Our opinion on the
financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon
B. In connection with our audit of the financial statements, our responsibility is to
read the other information and, in doing so, consider whether the other information is
materially inconsistent with the Financial Statements or our knowledge obtained during the
course of our audit or otherwise appears to be materially misstated. If, based on the work
we have performed, we conclude that there is a material misstatement of this other
information we are required to report that fact. We have nothing to report in this regard.
5. Managements Responsibility for the Financial Statements
A. The Companys Board of Directors is responsible for the matters stated in section
134(5) of the Act with respect to the preparation of these Financial Statements that give
a true and fair view of the financial position, financial performance, total comprehensive
income, changes in equity and cash flows of the Company in accordance with the Ind AS and
other accounting principles generally accepted in India. This responsibility also includes
maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
B. In preparing the Financial Statements, management is responsible for assessing the
Companys ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors are responsible for overseeing the Companys financial reporting
process.
6. Auditors Responsibilities for the Audit of the Financial Statements
A. Our objectives are to obtain reasonable assurance about whether the Financial
Statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these Financial Statements.
B. As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit We also:
i) Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
ii) Obtain an understanding of internal financial controls relevant to the audit in
order to design audit procedures that are appropriate in the circumstances. Under section
143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the
Company has adequate internal financial controls with reference to financial statements in
place and the operating effectiveness of such controls.
iii) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management
iv) Conclude on the appropriateness of managements use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the 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 auditors
report However, future events or conditions may cause the Company to cease to continue as
a going concern.
v) Evaluate the overall presentation, structure and content of the Financial
Statements, including the disclosures, and whether the Financial Statements represent the
underlying transactions and events in a manner that achieves fair presentation.
C. Materiality is the magnitude of misstatements in the Financial Statements that,
individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the Financial Statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) planning the scope of our audit
work and in evaluating the results of our work; and (ii) to evaluate the effect of any
identified misstatements in the Financial Statements.
D. We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit
E. We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
F. From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the Financial Statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditors report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication
II. Report on Other Legal and Regulatory Requirements
1. 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 best
of 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 the
Company so far as it appears from our examination of those books.
C. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive
Income, Statement of Changes in Equity and the Statement of Cash Llow dealt with by this
Report are in agreement with the relevant books of account.
D. In our opinion, the aforesaid financial statements comply with the Ind AS specified
under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
E. On the basis of the written representations received from the directors as on March
31, 2023 taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the
Act
F. With respect to the adequacy of the internal financial controls with reference to
financial statements of the Company and the operating effectiveness of such controls,
refer to our separate Report in "Annexure A". Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of the Companys internal financial
controls with reference to financial statements.
G. With respect to the other matters to be included in the Auditors Report in
accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations
given to us, the remuneration paid by the Company to its directors during the year is in
accordance with the provisions of section 197 of the Act
H. With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in
our opinion and to the best of our information and according to the explanations given to
us:
The Company has disclosed the impact of pending litigations on its financial position
in its Financial Statements
The Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term contracts including
derivative contracts
There has been no delay in transferring amounts, required to be transferred, to the
Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditors Report) Order, 2020 ("the Order")
issued by the
Central Government in terms of Section 143(11) of the Act, we give in "Annexure
B" a statement on the matters specified in paragraphs 3 and 4 of the Order.
For J S SHAH & CO
Chartered Accountants
Firm Registration Number: 132059W
CA JAIMIN S SHAH
Partner
Membership Number: 138488
UDIN: 23138488BGSXRA5942
Date: 11/05/2023
ANNEXURE- A
Independent Auditors report on the financial statements of SONA HI SONA JEWELLERS
(GUJARAT) LIMITED for the year ended 31st March 2023.
Report on the internal financial controls with reference to the aforesaid financial
statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013
(Referred to in paragraph l(A)(t) under Report on Other Legal and Regulatory
Requirements section of our report of even date)
Opinion
We have audited the internal financial controls with reference to financial statements
of SONA HI SONA JEWELLERS (GUJARAT) LIMITED ("the Company") as of 31st
March 2023 in conjunction with our audit of the financial statements of the Company for
the year ended on that date.
In our opinion, the Company has, in all material respects, adequate internal financial
controls with reference to financial statements and such internal financial controls were
operating effectively as at 31st March 2022, based on the internal financial
controls with reference to financial statements criteria established by the Company
considering the essential components of internal control stated in the Guidance Note on
Audit of internal Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India (the "Guidance Note").
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control with reference to financial statements
criteria established by the Company considering the essential components of internal
control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants
of India ("ICAI"). These responsibilities include the design, implementation and
maintenance of adequate internal financial controls that were operating effectively for
ensuring the orderly and efficient conduct of its business, including adherence to the
Companys policies, the safeguarding of its assets, the prevention and detection of frauds
and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Companies Act, 2013
(hereinafter referred to as "the Act").
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls with reference to financial statements based on our audit We conducted our audit
in accordance with the Guidance Note and the Standards on Auditing, prescribed under
section 143(10) of the Act, to the extent applicable to an audit of internal financial
controls with reference to financial statements. Those Standards and the Guidance Note
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether adequate internal financial controls with reference to
financial statements were established and maintained and whether such controls operated
effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls with reference to financial statements and their operating
effectiveness.
Our audit of internal financial controls with reference to financial statements
included obtaining an understanding of such internal financial controls, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. The procedures selected
depend on the auditors judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls with
reference to financial statements.
Meaning of Internal Financial controls with Reference to Financial Statements
A companys internal financial controls with reference to financial statements is a
process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A companys internal financial controls
with reference to financial statements include those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with
authorisations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorised acquisition, use, or
disposition of the companys assets that could have a material effect on the financial
statements.
Inherent Limitations of Internal Financial controls with Reference to Financial
Statements
Because of the inherent limitations of internal financial controls with reference to
financial statements, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the internal financial controls with
reference to financial statements to future periods are subject to the risk that the
internal financial controls with reference to financial statements may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
For J S SHAH & CO
Chartered Accountants
Firm Registration Number: 132059W
CA JAIMIN S SHAH
Partner
Membership Number: 138488
UDIN: 23138488BGSXRA5942
Date: 11/05/2023
Place: Ahmedabad
Annexure "B" to the Independent Auditors Report - 31st March, 2023
(Referred to in our report of even date)
With reference to the "Annexure B" referred to in the Independent Auditors
Report to the members of the Company on financial statements for the year ended 31 March
2023, we report the following:
i) (a)(A) The Company has maintained proper records showing full particulars, including
quantitative details and situation of Property, Plant and Equipment.
(B) The Company has maintained proper records of intangible assets.
(b) All the Property, Plant and Equipment have been physically verified by the
management during the year and there is a regular programme of verification which, in our
opinion, is reasonable having regard to the size of the company and the nature of its
assets. No material discrepancies were noticed on such verification;
(c) All the title deeds of immovable properties are held in the name of the company.
(d) The Company has not revalued its property, plant and equipment (including right of
use of assets) or intangible asset of both during the financial year;
(e) There is no any proceeding have been initiated or pending against company for
holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of
1988) and rules made thereunder.
ii)(a) The management has conducted physical verification of inventory at reasonable
intervals during the year. In our opinion the coverage and the procedure of such
verification by the management is appropriate. No discrepancies of 10% or more in
aggregate for each class of inventory were noticed on such physical verification.
(b) As disclosed in Note 3 to the standalone Ind AS financial statements, the Company
has been sanctioned working capital limits in excess of five crores in aggregate from
banks and/or financial institutions during the year on the basis of security of current
assets of the Company.
iii) In our opinion and according to the information provided to us the company has not
made investments and provided any guarantees and granted unsecured loans or advances in
the nature of loans hence this clause is not applicable
iv) The company has not provided any corporate guarantees within the meaning of section
185 & 186 of the Companies Act, 2013.
v) The Company has not accepted any deposits or amount which is deemed to be deposits
from the public.
vi) The Central Government has not prescribed the maintenance of cost records under
section 148(1) of the Act, for any of the services rendered by the Company.
vii) (a) According to the information and explanations given to us and on the basis of
our examination of the records of the Company, amounts deducted / accrued in the books of
account in respect of undisputed statutory dues including provident fund, income-tax, GST,
value added tax, duty of customs, service tax, cess and other material statutory dues if
applicable have been regularly deposited during the year by the Company with the
appropriate authorities. As explained to us, the Company did not have any dues on account
duty of excise.
(b) According to the information and explanations given to us, and the records of the
companies examined by us, there are no disputed dues of GST, income tax, custom duty,
service tax, wealth tax, Value added tax, excise duty and cess which have not been
deposited.
viii) The company has not recorded any transactions in the books of account which have
been surrendered of disclosed as income during the year in the tax assessments under the
Income Tax Act, 1961. The previously unrecorded income has been properly recorded in the
books of account during the year.
ix) (a) The Company has not defaulted in repayment of loans or other borrowings or in
the payment of interest thereon to any lender; hence this clause is not applicable;
(b) The company has not declared willful defaulter by any bank or financial institution
or other lender, hence this clause is not applicable;
(c) The company has obtained any term loan during the year, Term loan were applied for
the purpose for which the loan were obtained.
(d) The company has not raised any short-term fund; hence this clause is not
applicable;
(e) The company has not taken any funds from any entity or person on account of or to
meet the obligations of its subsidiaries, associates or joint ventures; hence this clause
is not applicable;
(f) The company has not raised company has raised loans during the year on the pledge
of securities held in its subsidiaries, joint ventures or associate companies; hence this
clause is not applicable.
x) (a) The Company did not raise any money by way of initial public offer or further
public offer (including debt instruments); hence this clause is not applicable;
(b) The Company has not made any preferential allotment or private placement of shares
or convertible debentures (fully, partially or optionally convertible) during the year;
hence this clause is not applicable.
xi) (a) According to the information and explanations given to us, no material fraud by
the Company or on the Company by its officers or employees has been noticed or reported
during the course of our audit
(b) No report under sub-section (12) of section 143 of the Companies Act has been filed
by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and
Auditors) Rules, 2014 with the Central Government; hence this clause is not applicable.
xii) (a) The Company is not a Nidhi Company hence compliance of Net Owned Funds to
Deposits in the ratio of 1: 20 to meet out the liability is not applicable to the company;
(b) The Company is not a Nidhi Company hence maintaining ten percent unencumbered term
deposits as specified in the Nidhi Rules, 2014 to meet out the liability is not applicable
to the company;
(c) The Company is not a Nidhi Company hence this clause is not applicable to the
company.
xiii) According to the information and explanation given to us and based on the our
examination of the records of the company, all transactions with the related parties are
in compliance with sections 177 and 188 of Companies Act where applicable and the details
have been disclosed in the financial statements, etc., as required by the applicable
accounting standards.
xiv) a) The Central Government has not prescribed to appoint internal auditor under
section 138 of the Act, for any of the services rendered by the Company;
b) This clause is not applicable to the company.
xv) According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not entered into non-cash
transactions with directors or persons connected with him as restricted in section 192 of
Companies Act, 2013; hence this clause is not applicable.
xvi) (a) The Company is not required to be registered under section 45-IA of the
Reserve Bank of India Act 1934.
(b) The Company is not has conducted any Non-Banking Financial or Housing Finance
activities; hence this clause is not applicable.
(c) The Company is not a Core Investment Company (CIC) as defined in the regulations
made by the Reserve Bank of India; hence this clause is not applicable.
(d) The Company does not have any CIC.
xvii) The company has not incurred cash losses in the financial year and in the
immediately.
xviii) There is no resignation of statutory auditors during the year; hence this clause
is not applicable.
xix) According to the information and explanations given to us and based on our
examination of the records of the Company and financial ratios, ageing and expected dates
of realisation of financial assets and payment of financial liabilities, other information
accompanying the financial statements, the auditors knowledge of the Board of Directors
and management plans, we were in the opinion that no material uncertainty exists as on the
date of the audit report There was no any liability in the books of the company for those
payable within one year from the date of balance sheet date.
xx)(a) The company has not any other than ongoing projects, therefore provision of
section 135 of Companies Act, 2013 is not applicable to the company;
(b) This clause is not applicable to the company.
xxi) There are no any qualifications or adverse remarks given by the respective
auditors in the Companies (Auditors Report) Order (CARO) reports, hence this clause is
not applicable to the company.
For J S SHAH & CO
Chartered Accountants
Firm Registration Number: 132059W
CA JAIMIN S SHAH
Partner
Membership Number: 138488
UDIN: 23138488BGSXRA5942
Date: 11/05/2023
Place: Ahmedabad.
+91-9892691696
