To
The Members of
Sizemasters Technology Limited
(Formerly known as Mewat Zinc Ltd)
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of Sizemasters
Technology Limited (Formerly known as Mewat Zinc Ltd) (the "Company"), which
comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss
(including Other Comprehensive Income), Statement of Changes in Equity, and the Statement
of Cash Flows for the year then ended and notes to the financial statements, including a
summary of the significant accounting policies and other explanatory information
(hereinafter referred to as "the financial statements").
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 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 and its profit and other
comprehensive income, changes in equity and cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the standards on auditing as
specified under section 143 (10) of the Act. Our responsibilities under those Standards
are further described in the Auditor?s 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 together with the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Act and the rules thereunder, and we have
fulfilled our other ethical responsibilities in accordance with these requirements and the
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.
Key Audit Matters
Key Audit Matters (KAM) are those matters that, in our professional
judgment, were of most significance in our audit of the financial statements for the
financial year ended March 31, 2023. 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. For each matter below, our description
of how our audit addressed the matter is provided in that context.
| Sr. Key Audit Matters No. |
How our audit addressed the key audit matter |
| 1. Inventories |
Audit Procedures Performed |
| Inventory represents 33.54% of total assets of the Company as
at March 31, 2023. Correctness, completeness and valuation are critical for reflecting
true and fair financial results of operations. |
Our audit response in respect of testing the existence of
inventories consisted of following procedures: • Procedures to test the existence of
inventories consisted of testing the relevant internal controls, including in specific the
testing of the inventory physical verification process that is performed annually by
management |
|
• We observed the physical verification of Inventory
conducted by management Our procedures in this regard included: |
|
- Observing compliance of stock count instructions by
management personnel; observing steps taken by management to ascertain the existence
inventory on the date of the count (including identification of non-moving, obsolete /
damaged inventory); |
|
- Performing independent inventory counts on sample basis and
reconciling the same to the management counts (wherever applicable); |
|
- On a sample basis, testing the reconciliation of the
differences in inventory quantity between the physical count and the books of accounts,
including accounting of such variances. |
Information Other than the Financial Statements and Auditor?s
Report Thereon
The Company?s management and Board of Directors are responsible
for the other information. The other information comprises the information included in
Management Discussion and Analysis, Report of the Directors, Boards Report including
Annexure to Boards Reports, Business Responsibility Report, Corporate Governance and
Shareholders information, the Overview of Financial Performance, and Report on Risk
Management (collectively referred as "other information") but does not include
the Financial Statements and our auditor?s 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.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so, consider whether such
other information is materially inconsistent with the financial statements or our
knowledge obtained during the course of the 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.
Responsibilities of Management for the Ind AS Financial Statements
The Company?s management and Board of Directors are responsible
for the matters stated in sub-section 5 of Section 134 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 (including other comprehensive income), changes in equity
and cash flows of the Company in accordance with the accounting principles generally
accepted in India, including the Indian Accounting Standards (Ind AS) specified under
Section 133 of the Act, read with the Companies (Indian accounting standards) Rules 2015,
as amended from time to time. 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.
In preparing the financial statements, management is responsible for
assessing the Company?s 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 also responsible for overseeing the
Company?s financial reporting process.
Auditor?s Responsibility for the Audit of the Financial Statements
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 auditor?s 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.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
• 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.
• Obtain an understanding of internal control 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 system in place and the
operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by the Management and
Board of Directors.
• Conclude on the appropriateness of management?s 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 Company?s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor?s
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 auditor?s report. However, future events or conditions
may cause the Company to cease to continue as a going concern.
• 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.
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.
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.
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 for the financial year ended March 31, 2023 and are therefore
the key audit matters.
We describe these matters in our auditor?s 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.
Other Matter
Without qualifying our opinion, we hereby draw attention to the fact
that, the prior year financial statements have been audited by another firm of Chartered
Accountants who have expressed an unmodified opinion on those financial statements.
Our opinion is not modified in respect of above matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor?s Report) Order, 2020
(the "Order"), issued by the Central Government of India in terms of Section
143(11) of The Act, we enclose in the ‘Annexure A?, a statement on the matters
specified in paragraphs 3 and 4 of the Order.
2. (A) 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 best of our knowledge and belief were necessary for the purposes of our
audit.
b) In our opinion, proper books of accounts 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 Flows
dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with Ind
AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the
Directors of the Company as on March 31, 2023, taken on record by the Board of Directors
of the Company, none of the Directors of the Company are 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 controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in ‘Annexure B?, Our report expresses an unmodified opinion on
the adequacy and operating effectiveness of the Company?s Internal Financial Controls
over financial reporting.
2. (B) 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:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements as of March 31, 2023 (Refer note 35.1 of
financial statements);
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable losses.
iii. There is no amount to be transferred, to the investor Education
and Protection Fund by the Company
iv. a) The Management has represented that, to the best of its
knowledge and belief, no funds (which are material either individually or in the
aggregate) have been advanced or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the Company to or in any other person or
entity,
including foreign entity ("Intermediaries"), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall,
whether, directly or indirectly lend or invest in other persons or entities identified in
any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries")
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The Management has represented, that, to the best of its knowledge
and belief, no funds (which are material either individually or in the aggregate) have
been received by the Company from any person or entity, including foreign entity
("Funding Parties"), with the understanding, whether recorded in writing or
otherwise, that the Company shall, whether, directly or indirectly, lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or
the like on behalf of the Ultimate Beneficiaries;
c) Based on the audit procedures that have been considered reasonable
and appropriate in the circumstances, nothing has come to our notice that has caused us to
believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided
under (a) and (b) above, contain any material misstatement.
v. As stated in Note 52 to the financial statements
(a) The Company has not proposed, declared or paid the Dividend during
the year ended March 31, 2023.
2. (C) With respect to the matter to be included in the Auditors?
Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given
to us, the remuneration paid by the
Company to its directors during the current year is in accordance with
the provisions of Section 197 of the Act.
(REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER
LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT TO THE MEMBERS OF SIZEMASTERS
TECHNOLOGY LIMITED (FORMERLY KNOWN AS MEWAT ZINC LTD) OF EVEN DATE)
(i) (a) (A) The Company has maintained proper records showing full
particulars, including quantitative details and situation of the Property, Plant and
Equipment and rights of use assets.
(B) The Company has no intangible assets record.
(b) As explained to us, the Property, Plant and Equipment were
physically verified during the year by the Management in accordance with a phased
programme of verification adopted by the Company which, in our opinion is reasonable
having regard to size of the Company and nature of its business. According to the
information and explanations given to us, no material discrepancies were noticed on such
verification.
(c) The title deeds of all the immovable properties held by the Company
(other than properties where the Company is the lessee and the lease agreements are duly
executed in favour of the lessee) are held in the name of the Company.
(d) The Company has not revalued its Property, Plant and Equipment and
Right of Use assets or intangible assets during the year.
(e) No proceedings have been initiated or are pending against the
Company for holding any benami property under the Benami Transactions (Prohibition) Act,
1988 (45 of 1988) and rules made thereunder. Accordingly, reporting under clause 3(i)(e)
of the Order is not applicable to the Company.
(ii) (a) The inventories have been physically verified by the
Management during the year. In our opinion, the frequency and coverage of & procedure
adopted for such verification is reasonable. The Company has maintained proper records of
inventory.
(b) The Company has not been sanctioned working capital exceeding Rs.5
Crore in aggregate from banks on the basis of security of current assets, and hence
reporting under clause 3(ii)(b) of the Order is not applicable.
(iii) The Company has not made any investments in, provided any
guarantee or security. The company has not granted loans and advances in the nature if
loan, secured or unsecured, to companies, firms, Limited Liability Partnerships or to any
other parties, during the year hence reporting under clause 3(iii) is not applicable.
(iv) In our opinion and according to the information and explanations
given to us, the Company has not advanced loans to Directors/ company in which a director
is interested to which the provisions of Section 185 of the Companies Act apply and the
Company has also not given any loans or advances, has not made investments and has not
given guarantees / securities to a company to which the provisions of Section 186 of the
Companies Act apply, accordingly reporting under clause 3(iv) of the Order is not
applicable to the Company.
(v) The Company has not accepted any deposits from the public within
the meaning of the directives issued by the Reserve Bank of India, provisions of Section
73 to 76 of the Act, any other relevant provisions of the Act and the relevant rules
framed thereunder.
(vi) We have broadly reviewed books of accounts maintained by the
Company pursuant to the rules made by the Central Government for maintenance of cost
records u/s 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the
prescribed records have been made and maintained. We have however, not made a detailed
examination of records with a view to determine whether they are accurate or complete.
(vii) In respect of Statutory Dues:
(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 Goods and Service Taxes, Provident Fund,
Employees? State Insurance, Income- tax, Sales Tax, Service Tax, Duty of Customs,
Duty of Excise, Value Added Tax, Cess and other material statutory dues have generally
been regularly deposited during the year by the Company with the appropriate authorities.
Further, no undisputed amounts payable in respect thereof were outstanding at the year-end
for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us there are
no dues of Income Tax, Provident Fund, Employees? State Insurance, Sales Tax, Value
Added Tax, Goods and Service Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues which have not been deposited with the appropriate authorities on
account of any dispute.
(viii) According to the information and explanations provided to us,
there were no transaction relating to previously unrecorded income that have been
surrendered or disclosed as income during the year in the tax assessments under the Income
Tax Act, 1961 (43 of 1961).
(ix) (a) According to the information and explanations provided to us,
the Company has not defaulted in repayment of its loans or borrowings or in the payment of
interest thereon to any lender.
(b) According to the information and explanations given to us including
representation received from the management of the Company, and on the basis of our audit
procedures, we report that the Company has not been declared a wilful defaulter by any
bank or financial institution or other lender.
(c) The Company has not taken any term loan during the year.
(d) In our opinion and according to the information and explanations
given to us, and on an overall examination of the financial statements of the Company,
funds raised by the Company on short term basis have not been utilised for long term
purposes.
(e) The Company did not have any subsidiaries, associates or joint
ventures, accordingly reporting under clause 3(ix)(e) and clause 3(ix)(f) of the Order is
not applicable to the Company.
(x) (a) In our opinion and according to the information and
explanations given to us, the Company did not raise any money by way of initial public
offer or further public offer (including debt instruments) during the year. Accordingly,
paragraph 3(x)(a) of the Order is not applicable to the Company.
(b) The company has made private placement of shares under review and
the requirement of section 42 of the companies act, 2013 have been complied with and
according to information and explanations given to us, the amount raised have been kept as
deposit in the bank to be used in future for the purposes for which the funds were raised.
(xi) (a) To the best of our knowledge and according to the information
and explanations given to us, no fraud by the Company or on the Company has been noticed
or reported during the period covered by our audit.
(b) No report under section 143(12) of the Act has been filed with the
Central Government for the period covered by our audit.
(c) According to the information and explanations given to us including
the representation made to us by the management of the Company, there are no
whistle-blower complaints received by the Company during the year.
(xii) According to the information and explanations given to us, in our
opinion, the Company is not a Nidhi Company as prescribed under Section 406 of the Act.
Accordingly, Clause 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us and
based on our examination of the records of the Company, all transactions with the related
parties are in compliance with Sections 177 and 188 of the Act, where applicable, and
details of such transactions have been disclosed in the financial statements as required
by the applicable Indian Accounting Standards.
(xiv) (a) Based on our examination of the records of the Company, in
our opinion the Company has an adequate internal audit system commensurate with the size
and the nature of its business.
(b) We have considered, the internal audit reports for the year under
audit, issued to the Company during the year and till date, in determining the nature,
timing and extent of our audit procedures.
(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. Accordingly, provision
of Section 192 of the Companies Act, 2013 are not applicable to the Company.
(xvi) According to the information and explanations given to us, the
Company is not required to be registered under Section 45-IA of the Reserve Bank of India
Act, 1934. Accordingly, Clause 3(xvi) of the Order is not applicable to the Company.
(xvii) The Company has not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
(xviii) M/s GGPS & Associates, the statutory auditors of the
Company have resigned with effect from 4th July 2023. As informed, there have
been no issues objections or concerns raised by the said outgoing auditors.
(xix) According to the information and explanations given to us and on
the basis of the financial ratios, ageing and expected dates of realisation of financial
assets and payment of financial liabilities, other information accompanying the financial
statements and our knowledge of the plans of the Board of Directors and management, we are
of the opinion that no material uncertainty exists as on the date of the audit report and
that Company is capable of meeting its liabilities existing at the date of balance sheet
as and when they fall due within a period of one year from the balance sheet date. We,
however, state that this is not an assurance as to the future viability of the Company. We
further state that our reporting is based on the facts up to the date of the audit report
and we neither give any guarantee nor any assurance that all liabilities falling due
within a period of one year from the balance sheet date, will get discharged by the
Company as and when they fall due.
(xx) The provisions of section 135 towards corporate social
responsibility are not applicable on the company. Accordingly, the provisions of clause
3(xx) of the order is not applicable.
(xxi) The reporting under clause (xxi) is not applicable in respect of
audit of standalone financial statements of the Company. Accordingly, no comment has been
included in respect of said clause under this report.
(REFERRED TO IN PARAGRAPH 2(A)(f) UNDER THE HEADING "REPORT ON
OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT TO THE MEMBERS OF SIZEMASTERS
TECHNOLOGY LIMITED (FORMERLY KNOWN AS MEWAT ZINC LTD) EVEN DATE)
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF
SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 ("THE ACT")
Opinion
We have audited the internal financial controls over financial
reporting of Sizemasters Technology Limited (Formerly known as Mewat Zinc Ltd) ("the
Company") as of March 31, 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 March 31, 2023, 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").
Management?s Responsibility for Internal Financial Controls
The Company?s management and Board of Directors are responsible
for establishing and maintaining internal financial controls based on the internal control
over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Financial Controls
over Financial Reporting 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
Company?s 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.
Auditors? Responsibility
Our responsibility is to express an opinion on the Company?s
internal financial controls over financial reporting based on our audit. We conducted our
audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued
by ICAI and prescribed under section 143(10) of the Companies Act, 2013, to the extent
applicable to an audit of internal financial controls, both applicable to an audit of
Internal Financial Controls and both issued by the ICAI. 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 over
financial reporting was established and maintained and if 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 system over financial reporting and their
operating effectiveness.
Our audit of internal financial controls over financial reporting
included obtaining an understanding of internal financial controls over financial
reporting, 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 auditor?s 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 Company?s internal
financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company?s internal financial control over financial reporting 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 company?s internal financial control over financial
reporting includes 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
company?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
financial reporting, 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 over
financial reporting to future periods are subject to the risk that the internal financial
control over financial reporting may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
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