<dhhead>INDEPENDENT AUDITOR S REPORT</dhhead>
To
The Members of SM Auto Stamping Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the standalone financial statements of SM Auto
Stamping Limited ("the company") which comprise the standalone Balance Sheet
as at March 31, 2023 and the standalone statement of profit and loss, and standalone
statement of cash flows for the year then ended and notes to the standalone financial
statements including a summary of the significant accounting policies and other
explanatory information (herein referred to as "standalone financial
statements").
In our opinion and to the best of our information and according to the
explanations given to us the aforesaid standalone 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 Accounting Standards
prescribed under section 133 of the Act read with rule 3 of the Companies (Accounting
Standards) Rules, 2021 and other accounting principles generally accepted in India, of the
state of affairs of the Group as at March 31 2023, the Profit and its cash flows
for the year then ended.
Basis for Opinion
We conducted our audit of standalone financial statements in accordance
with the Standards on Auditing specified under Section 143(10) of the Act (SAs). Out-
responsibilities under those SAs are further described in the Auditors Responsibilities
for the Audit of the Standalone 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 standalone 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 opinion
on the standalone financial statements.
Emphasis of Matter
We draw attention to the following matters in the Notes to the
financial statements:
(a) Notes 8 & 15to the financial statements, which state
that Trade Payable and Trade Receivables balances are subject to confirmation.
(b) During the year the effect of Excess Depreciation charged to
financial statements in previous year is taken as prior period income, resulting in
overstatement of profit and closing balance of Property, Plant and Equipment see Notes 26
to the financial statements.
Our opinion is not modified in the respect of this matter.
INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND
AUDITORS REPORT THEREON
The companys board of directors is responsible for the other
information. The other information comprises the information included in the companys
annual report but does not include the financial statements and our auditors’ report
thereon.
Our opinion on the standalone 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 standalone financial statements,
our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the standalone financial statements or
our knowledge obtained in 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.
Key Audit Matters
Key audit matters are those matters that in our professional judgment
were of most significance in our audit of the standalone financial statements of the
current period. These matters were addressed in the context of our audit of the standalone
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.
We have determined the matters described below to be the key audit
matters to be communicated in our report. ^5=5?*.
AP
Revenue recognition (refer notes 3)
| The Key Audit Matter |
How the matter is addressed in our audit |
| Revenue is recognised when the control over the underlying
products has been transferred to the customer. |
Our audit procedures included: |
|
Focusing on the Companys revenue
recognition for compliance with AS; |
|
Testing the design, implementation and
operating effectiveness of the Companys manual and automated (Information Technology -
IT) controls on recording revenue. We focused on controls around the timely and accurate
recording of sales transactions.
i |
MANAGEMENT S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The company’s Board of Directors is responsible for the matters
stated in section 134(5) of the Act with respect to the preparation of these standalone
financial statements that give a true and fair view of the state of affairs, loss and cash
flows of the company in accordance with the 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 of 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
standalone financial statements that give a true and fair view and are free from material
misstatement whether due to fraud or error.ln preparing the standalone financial
statements, management and Board of Directors are 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 is also responsible for overseeing the Companys
financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone
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 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 standalone financial statements.
As part of an audit in accordance with SAs we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
standalone 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 with reference to standalone
financial statements 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 management.
• 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 exist, we are required to draw attention in our auditors report to the
related disclosures in the standalone 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
standalone financial statements including the disclosures and whether the standalone
financial statements represent the underlying transactions and events in a manner
that achieves fair presentation.
• Materiality is the magnitude of misstatements in the standalone
financial statements that, individually or in aggregate, makes it probable that the
economic decisions of a reasonably knowledgeable user of the standalone financial
statements may be influenced. We consider quantitative materiality and qualitative factors
in (i) planning the scope of audit and evaluating the results of our work; and (ii) to
evaluate the effect of any identified misstatements in the standalone
financial statements.
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 the mall 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 standalone
financial statements of the current period and are therefore the key audit matters. We
describe these matters in oui 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.
Report on Other Legal and Regulatory Requirement
1. As required by the Companies (Auditor’s Report) Order, 2020
("the Order"), issued by the Central Government of India in terms of sub-section
(11) of section 143 of the Companies Act, 2013, we give in the "Annexure A" a
statement on the matters specified in paragraph 3 and 4 of the order.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations,
which to the best of our knowledge and belief were necessary for the purpose of our audit;
(b) In our opinion, proper books of accounts as required by law have
been kept by the company so far as appears from our examination of those books;
(c) The Balance Sheet and the statement of profit and loss dealt with
by this Report are in agreement with the books of account;
(d) In our opinion, the standalone financial statements comply with the
accounting standards specified under section 133 of the Act, read with rule 3 of the
Companies (Accounting Standards) rules, 2021.
(e) On the basis of the written representations received from the
directors as on 31 March 2023 taken on record by the Board of Directors, none of the
directors is disqualified as on 31 March 2023 from being appointed as a director in terms
of Section 164 (2) of the Act;
(0 With respect to the adequacy of the internal financial controls over
financial reporting of the Company with reference to these standalone financial statements
and the operating effectiveness of such controls, refer to our separate Report in
"Annexure B" to this report;
(g) With respect to the other matters to be included in the
Auditor’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 the
explanations given to us:
i. The Company does not have any pending litigations which would impact
its financial position.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable losses.
iii. There are no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
iv.
The management has represented that, to the best of his knowledge and
belief other than as discussed in the notes to accounts, no funds 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(s) or entity(ies), including
foreign entities ("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")
Provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.
The management has represented that, to the best of his knowledge and
belief other than as discussed in the notes to accounts, no funds have been received by
the company from any person(s) or entity (ies), including foreign entities. ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the
Company shall, whether,
(a) 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")
(b) provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
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. The company has declared interim dividend Rs.1.25 (12.5%) to the
equity shareholders of the Company for the FY 2022-23. The company has complied with the
provisions of section 123 of the Companies Act, 2013.
3. With respect to the matter to be included in the Auditors’
Report under Sectionl97(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. The remuneration paid to any
director is not in excess of the limit laid down under Section 197 of the Act. The
Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of
the Act which are required to be commented upon by us.
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT MARCH 31ST 2023
With reference to the Annexure A referred to in the Independent
Auditors Report to the members of the SM Auto Stamping Limited on the Standalone
Financial Statements for the year ended March 31, 2023
To the best of our information and according to the explanations
provided to us by the Company and the books of account and records examined by us in the
normal course of audit, we state that:
(i) (a) (A) The Company is under the process of maintaining proper
records
showing full particulars, including quantitative details and situation
of property, plant and equipment and investment properties.
(B) The company is in the process of maintaining proper records showing
full particulars of intangible assets
(b) The Company has a programme of physical verification of its
property, plant and equipment and investment properties by which the property, plant and
equipment and investment properties are verified by the management according to a phased
programme designed to cover all the items over a period of three years. The Company has
not physically verified property, plant and equipment and investment properties during the
year.
(c) The title deeds of immovable properties of land and buildings as
disclosed in the financial Statements, are held in the name of SM Auto stamping Pvt. Ltd.
as SM Auto Stamping Limited is formed after conversion of private limited to public
limited company due to which title deeds of immovable property are in the name of Private
limited company, company is in process of rectification of above names.
| Description of Property |
Gross
Carrying
Value |
Held in the
name of |
Whether promoter, director or their
relative or employee |
Period
held-
indicate
range,
where
appropriate |
Reason for not being held in name of
company |
| Plot Number B- 198, MIDC Nashik |
Rs. 586.57 (Amount is Lacs) |
M/s S.M. Auto
Stamping
Private
Limited |
M/s. S.M.Auto Stamping limited formerly
known as SM Auto Stamping Private Limited |
Year of
Acquisition
2007 |
SM Auto Stamping Limited is formed after
conversion of SM Auto private limited to public limited company due to which title deeds
of immovable property are in the name of Private limited company. The company is in
process of rectification of above names |
| Plot Number J-41, MIDC Nashik |
|
M/s S.M. Auto
Stamping
Private
Limited |
M/s. S.M.Auto Stamping limited formerly
known as SM Auto Stamping Private Limited |
Year of
Acquisition
2007 |
|
| Plot Number C-13, MIDC Nashik |
|
M/s S.M. Auto
Stamping
Private
Limited |
M/s. S.M.Auto Stamping limited formerly
known as SM Auto Stamping Private Limited |
Year of
Acquisition
2007 |
|
(d) The Company has not revalued its Property, Plant and Equipment
(including Right of Use assets) or intangible assets or both 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 and Rules made thereunder
(ii) a) The inventory, except for goods-in-transit and stocks lying
with third parties, has been physically verified by the management during the year. In our
opinion, the frequency of such verification is reasonable. The discrepancies noticed on
verification between the physical stocks and the book records were not material and have
been properly dealt with in the books of account.( During this veriifcation no material
discrepancies were noticed)
b) According to the information and explanations given to us and on the
basis of our examination of the records of the Company, the Company has been sanctioned
working capital limits in excess of five crores rupees, in aggregate, from banks or
financial institutions on the basis of security of current assets. In our opinion, the
quarterly returns or statements filed by the Company with such banks or financial
institutions are in agreement with the books of account of the Company except for
statement filed for quarterly stated in following table with TJSB bank, where differences
were noted between the amount as per books of account for respective months and amount as
reported in the monthly statement. The differences are as follows:
Amounts In Lakhs.
|
Closing Stock |
Reasons For Material Discrepancies |
|
| Month |
Closing Stock as per books of accounts |
Closing Stock per stock statement
submitted to bank |
Difference |
| Jun-22 |
487 69 |
487.69 |
0.00 |
| SeD-22 |
455.79 |
455.79 |
0.00 |
| Dec-22 |
391.98 |
391.98 |
0.00 |
| Mar-23 |
403.36 |
403.36 |
0.00 |
|
Sundry Debtors |
Reasons For Material
Discrepancies |
| Month |
Sundry Debtors as per
books of accounts |
Sundry Debtors per Debtor
statement submitted to bank |
Difference |
|
| Jun-22 |
656.58 |
932.96 |
(276.38) |
Error in ERP report resulted
in incorrect reporting |
| SeD-22 |
716.94 |
586 81 |
130.13 |
Out of total outstanding,
only outstanding upto 90 days are reported to the bank |
| Dec-22 |
752.51 |
521.76 |
230.74 |
Out of total outstanding,
only outstanding upto 90 days are reported to the bank |
| Mar-23 |
795.56 |
82342 |
(27.86) |
Reconciliation of customer
ledgers as year end activity resulted in this differece |
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms, limited liability partnerships or other parties covered in the register
maintained under Section 189 of the Companies Act, 2013 (‘the Act’). Hence,
reporting under clause 3 (iii) (a), (b), (c), (d), (e) and (f) of the Order are not
applicable to the Company.
(iv) The Company has complied with the provisions of Sections 185 and
186 of the Companies Act, 2013 in respect of grant of loans, making investments and
providing guarantees and securities, as applicable.
(v) The Company has not accepted deposits as per the directives issued
by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant
provisions of the Act and the rules framed thereunder. Hence, reporting under clause 3 (v)
of the Order is not applicable.
(vi) The company does not fulfill the conditions pursuant to the
companies (Cost Accounting Record) Rules 2011 prescribed by the central Government, under
sub-section (1) of section 148 of the Companies Act, 2013 for maintenance of the
prescribed cost records and therefore such cost records are not maintained by the company.
Hence, reporting under clause 3 (v) of the Order is not applicable.
(vii) In respect of statutory dues,
(a) In our opinion, the Company is regular in depositing statutory dues
including Provident fund, Profession tax, Income tax, Duty of customs, Employees State
Insurance, Goods and Service tax, Cess and other material statutory dues with the
appropriate authorities.
There were no undisputed amounts payable in respect of Provident fund,
Profession tax, Income-tax, Employees State Insurance, Duty of customs, Goods and Service
tax, Cess and other material statutory dues were in arrears as at March 31, 2023 for a
period of more than six months from the date they became payable.
(b) There are no dues of Income-tax, Sales tax, Service tax, Duty of
customs, Duty of excise, Goods and Service tax and Value added tax as at March 31, 2023,
which have not been deposited with the appropriate authorities on account of any dispute
except following For the A.Y.2018-19 the Company had received a demand of Rs. 8.24
Lakhs The company has paid 20% of the amount Rs.1.65 Lakhs on 09/09/2020 and filed an
Appeal with the Commissioner of Income Tax (Appeals) on 14/09/2020. However, the CIT(A)
has not yet decided the matter
(viii) There were no transactions 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. Hence, reporting under clause 3(viii) is not
applicable.
(ix) (a) The Company has not defaulted in repayment of loans
or borrowings to banks and financial institutions.
b) The company has not been declared willful defaulter by any bank or
financial institution or other lender or government or any government authority.
(c) The Company has not taken any term loan during the year However,
there are outstanding term loans at the beginning of the year hence, reporting under
clause 3(ix)(c) of the Order is applicable.
(d) On an overall examination of the financial statements of the
Company, funds raised on short-term basis have, prima facie, not been used during the year
for long-term purposes by the company.
(e) The company has not taken any funds from any entity or person on
account of or to meet the obligations of its subsidiaries, associate companies or joint
ventures.
(f) The company has not raised loans during the year on the pledge of
securities held in its subsidiaries, associate companies or joint ventures.
(x) (a) The Company has not raised any moneys by way of initial public
offer or further public offer (including debt instruments) during the Financial Year
2022-2023 and hence reporting under clause 3(x) (a) of the Order is not applicable.
(b) During the year, the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible debentures during
the year and hence reporting under clause 3(x) (a) of the Order is not applicable.
(xi) a) No material fraud by the Company or on the Company by its
officers and employees has been noticed or reported during the year.
b) No report under sub-Section (12) of Section 143 of the Companies Act
has been filed in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors)
Rules 2014 with the Central Government, during the year and up to the date of this report.
c) There are no whistle-blower complaints received during the year by
the company.
(xii) The Company is not a Nidhi company and hence reporting under
clause 3(xii) (a), (b) and (c) of the Order is not applicable. ^
(xiii) The Company is in compliance with Section 177 and 188 of the
Companies Act, 2013 with respect to applicable transactions with the related parties and
the details of related party transactions have been disclosed in the standalone financial
statements as required by the applicable accounting standards.
(xiv) a) The Company is required an internal audit system as per
Section 138 of the Companies Act, 2013. Hence reporting under clause 3(xiv) (a) and (b) of
the Order is applicable.
b) The reports of the Internal Auditors for the financial year
2022-2023 were considered by us in forming our opinion regarding the audit
(xv) During the year the Company has not entered into any non-cash
transactions with its Directors or persons connected with its directors. And hence
provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.
(xvi) (a) The Company is not required to be registered under Section
45-1A of the Reserve Bank of India Act, 1934.
(b) The company is not required to be registered as Non-Banking
Financial Company or Housing Finance Company as per Reserve Bank of India Act, 1934.
(c) There is no core investment company within the Group (as defined in
the Core Investment Companies (Reserve Bank) Directions, 2016)
Hence, reporting under clause 3(xvi) (a), (b), (c) and (d) of the Order
is not applicable.
(xvii) The Company has not incurred any Cash Losses during the
F.Y.2021-22 & 2022-23
(xviii) There has not been any resignation of the statutory auditors
during the year.
(xix) On the basis of the financial ratios, ageing and expected dates
of realization of Financial assets and payment of financial liabilities, other information
accompanying the financial statements there is no material uncertainty existing as on the
date of the audit report that company is not 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) In respect of other than ongoing projects, the company is not
required to transfer any amount to a Fund specified in Schedule VII to the Companies Act
within a period of six months of the expiry of the financial year in compliance with
second proviso to sub-section (5) of section 135 of the said Act.
Annexure - B to the Auditors’ Report
Refer to Para 2(f) under Heading Report on Other Legal and
Regulatory Requirements" Qf the Independent Auditors Report of the even date
to the memhers of SM Auto Stamping Limited fFormerly known as SM Auto Stamping
Privatp Limited) on Standalone financial statements for the year ended 31st March 2023
Report on the Internal Financial Controls under Clause fi) of
Sub-section 3 of Section 143 of the Companies Act. 2013 f the Act "1:-
We have audited the internal financial controls over financial
reporting of SM Auto Stamping Limited (Formerly known as SM Auto Stamping Private
Limited) as of 31
March 2023 in conjunction with our audit of the standalone financial
statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Company’s management is 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 Internal 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 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.
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 deemed to be 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 Institute of Chartered
Accountants of India. 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 judgment, 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 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 companys internal financial control over
financial reporting includes those policies and procedures that (1) pertain to the
maintenance of lecords 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 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.
Opinion
In our opinion, the company has, in all material respects, an adequate
internal financial controls systems over financial reporting and such internal financial
controls over financial reporting were operating effectively as at 31st March 2023 , 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 Internal Financial controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India.
SM Auto Stamping Ltd.
(Formerly known as SM Auto Stamping Private Limited)
CIN : L27109MH2006PLC163789
+91-9892691696
