Mar 31, 2023
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of CG Power and Industrial Solutions Limited (âthe Companyâ), which comprise the Balance sheet as at March 31, 2023, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
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, as amended (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), 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 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 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 standalone financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Revenue recognition (as described in Note 27 of the standalone financial statements) |
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The Company has two operating segments, namely, Power and Industrial Segment. The type of customers varies across these segments, ranging from Large Government companies / corporations to Original Equipment Manufacturers and Industrial Customers etc. Majority of the Companyâs revenue is from sale of goods which are recognized at a point in time based on the terms of the contract with customers which may vary case to case. Terms of sales arrangements with various customers within each of the operating segments, including Incoterms determine the timing of transfer of control and require judgment in determining timing of revenue recognition. Due to the judgement relating to determination of point of time in satisfaction of performance obligations with respect to sale of products, this matter is considered as Key Audit Matter. |
Our audit procedures amongst others included the following: ⢠We read the Company''s accounting policy for timing of revenue recognition and assessed compliance in terms of Ind AS 115 - Revenue from Contracts with Customers. ⢠We performed walkthroughs of the Company''s revenue processes, including design and implementation of controls and tested the design and operating effectiveness of such controls in relation to revenue recognition. ⢠On a sample basis, we tested contracts with customers, purchase orders issued by customers, and sales invoices raised by the Company to determine the timing of transfer of control along with pricing terms and the timing of the revenue recognition in respect of such contracts. ⢠We compared revenue with historical trends and where appropriate, conducted further enquiries and testing. ⢠On a sample basis, we analyzed revenue transactions near the reporting date and tested whether the timing of revenue was recognized in the appropriate period with reference to shipping records, sales invoices etc. for those transactions. ⢠We assessed the disclosures for compliance with applicable accounting standards. |
INDEPENDENT AUDITORâS REPORT TO THE MEMBERS OF CG POWER AND INDUSTRIAL SOLUTIONS LIMITED (Contd.) |
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Key audit matters |
How our audit addressed the key audit matter |
Recognition of Deferred Tax Assets (as described in Note 9 of the standalone financial statements) |
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The Company has Deferred Tax Asset (DTA) of '' 445.32 crores as at March 31,2023 on tax losses based on availability of future taxable profits against which DTA will be utilized. The tax losses were primarily on account of write off of receivable balances in relation to various transactions in earlier years which are under investigations by regulatory authorities. Basis legal opinion, management has considered these written-offs as an allowable expense under the Income tax and recognized deferred tax assets on such losses. The recognition of deferred tax asset is identified as key audit matter considering the significance of amounts and judgements involved. |
Our audit procedures amongst others included the following: ⢠We obtained an understanding, assessed and tested the operating effectiveness of internal control relating to the measurement and recognition of deferred tax. ⢠We involved our tax specialist to assess tax computation as per the local fiscal regulations in India. ⢠We tested on a sample basis the identification and quantification of differences between the recognition of assets and liabilities according to tax law and financial reporting in accordance with Indian Accounting Standards. ⢠We have evaluated the Company''s assumptions and estimates in relation to the likelihood of generating sufficient future taxable income based on most recent budgets and plans, prepared by management principally by performing sensitivity analyses and evaluated and tested the key assumptions used to determine the amounts recognized. ⢠We assessed the reasonableness of management''s business plans considering the relevant economic and industry indicators. ⢠We obtained and read the legal opinion considered by the management for recognition of deferred tax assets on losses. ⢠We assessed the disclosures in the Standalone Financial Statements in accordance with the requirements of Ind AS 12 âIncome Taxesâ. |
Claims and exposures relating to taxation and litigation (as described in Note 36 of the standalone financial statements) |
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The Company has disclosed contingent liabilities in respect of disputed claims / levies under tax and legal matters. Taxation and litigation exposures have been identified as a key audit matter due to significant outstanding matters with authorities and management assessment towards potential financial impact of these matters will involve significant judgement and assumptions. |
Our audit procedures amongst others included the following: ⢠We understood the process and assessed the internal control environment relating to the identification, recognition and measurement of provisions for disputes, potential claims and litigation, and contingent liabilities. ⢠We obtained details of legal and tax disputed matters from management and assessed management''s position through discussions on both the probability of success in significant cases, and the magnitude of any potential loss. ⢠We involved tax specialists to assist us in evaluating tax positions taken by management. ⢠We circulated legal confirmation for material litigations to external legal counsel and reviewed their assessment and had a discussion on their assessment with the senior management of the Company. ⢠We assessed the relevant disclosures made in the Standalone Financial Statements for compliance with the requirements of Ind AS 37. |
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31,2023. 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. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
Information Other than the Standalone Financial Statements and Auditorâs Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditor''s 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 such other information is materially inconsistent with the 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.
Responsibilities of Management 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 financial position, financial performance including other comprehensive income, cash flows and changes in equity 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. 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 the 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.
In preparing the standalone 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.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone 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 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 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 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 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.
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 standalone 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â a statement on the matters specified in paragraphs 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 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 the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(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 these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31,2023 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) 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, 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 standalone financial statements -Refer Note 36 to the standalone 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 were no amounts which were required 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 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 persons or entities, including foreign entities (âIntermediariesâ), 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 (âUltimate Beneficiariesâ) 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 have been
received by the Company from any persons or entities, including foreign entities (âFunding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performed 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 subclause (a) and (b) contain any material misstatement.
v. The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with section 123 of the Act.
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w.e.f. April 1, 2023, reporting under this clause is not applicable.
For S R B C & CO LLP Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
Membership Number: 210934 UDIN: 23210934BGYJLP5174 Place of Signature: Chennai Date: May 8, 2023
Mar 31, 2022
Key audit matters |
How our audit addressed the key audit matter |
Revenue recognition (as described in Note 29 of the Standalone Financial Statements) |
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The Company has two operating segments, namely, Power and Industrial Segment. The type of customers varies across these segments, ranging from Large Government companies /corporations to Original Equipment Manufacturers and Industrial Customers etc. Majority of the Companyâs revenue is from sale of goods which are recognized at a point in time based on the terms of the contract with customers which may vary case to case. Terms of sales arrangements with various customers within each of the operating segments, including Incoterms determine the timing of transfer of control and require judgment in determining timing of revenue recognition. Due to the judgement relating to determination of point of time in satisfaction of performance obligations with respect to sale of products, this matter is considered as Key Audit Matter. |
Our audit procedures amongst others included the following: ⢠We read and understood the Companyâs accounting policy for timing of revenue recognition and assessed compliance in terms of Ind AS 115- Revenue from Contracts with Customers. ⢠We understood the Companyâs revenue processes, including design and implementation of controls which vary based on product segment and customer, and tested the operating effectiveness of such controls in relation to revenue recognition. ⢠On a sample basis, we tested contracts with customers, purchase orders issued by customers, and sales invoices raised by the Company to determine the timing of transfer of control along with pricing terms and the timing of the revenue recognition in respect of such contracts. ⢠Compared revenue with historical trends and where appropriate, conducted further enquiries and testing. ⢠On a sample basis, we analyzed revenue transactions near the reporting date and tested whether the timing of revenue was recognized in the appropriate period with reference to shipping records, sales invoices etc. for those transactions. ⢠We assessed the disclosures for compliance with applicable accounting standards. |
Key audit matters |
How our audit addressed the key audit matter |
Recognition of Deferred Tax Asset (as described in Note 9 of the Standalone Financial Statements) |
|
The Company has Deferred Tax Asset (DTA) of '' 613.28 crores as at March 31,2022 on tax losses based on availability of future taxable profits against which DTA will be utilized. The tax losses were primarily on account of write off of receivable balances in relation to various transactions in earlier years which are under investigations by regulatory authorities. Basis legal opinion, management has considered these written-offs as an allowable expense under the Income tax and recognized deferred tax assets on such losses. The recognition of deferred tax asset is identified as key audit matter considering the significance of amounts and judgements involved. |
Our audit procedures amongst others included the following: ⢠We obtained an understanding, assessed and tested the operating effectiveness of internal control relating to the measurement and recognition of deferred tax. ⢠We involved internal experts to assess tax computation as per the local fiscal regulations in India. ⢠We tested on a sample basis the identification and quantification of differences between the recognition of assets and liabilities according to tax law and financial reporting in accordance with Indian Accounting Standards. ⢠We obtained and verified the budgeted forecast approved by the senior management which was in line with the projections approved by the Board of the Company for recoverability of deferred tax asset. ⢠We performed reasonability testing in relation to assumptions and estimates considered by the management for assessing recoverability of deferred tax asset. ⢠We obtained and read the legal opinion considered by the management for recognition of deferred tax assets on losses. ⢠We assessed the disclosures in the Standalone Financial Statements in accordance with the requirements of Ind AS 12 âIncome Taxesâ. |
Claims and exposures relating to taxation and litigation (as described in Note 38 of the Standalone Financial Statements) |
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The Company has disclosed contingent liabilities of '' 24.37 crores in respect of disputed claims/ levies under tax and legal matters. Taxation and litigation exposures have been identified as a key audit matter due to significant outstanding matters with authorities and management assessment towards potential financial impact of these matters will involve significant judgement and assumptions. |
Our audit procedures amongst others included the following: ⢠We understood the process and assessed the internal control environment relating to the identification, recognition and measurement of provisions for disputes, potential claims and litigation, and contingent liabilities. ⢠We obtained details of legal and tax disputed matters from management and assessed managementâs position through discussions on both the probability of success in significant cases, and the magnitude of any potential loss. ⢠We involved tax specialists to assist us in evaluating tax positions taken by management. ⢠We circulated legal confirmation for material litigations to external legal counsel and reviewed their assessment and had a discussion on their assessment with the senior management of the Company. ⢠We assessed the relevant disclosures made in the Standalone Financial Statements for compliance with the requirements of Ind AS 37. |
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of CG Power and Industrial Solutions Limited (âthe Company"), which comprise the Balance sheet as at March 31 2022, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
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, as amended (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Standalone Financial Statementsâ section of our report. We are independent of the Company in accordance with the âCode of Ethicsâ 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 standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2022. 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. We have fulfilled the responsibilities described in the Auditorâs responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
Information Other than the Standalone Financial Statements and Auditor''s Report Thereon
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditorâs 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 such other information is materially inconsistent with the 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.
Responsibilities of Management for the Standalone Financial Statements
The Companyâs 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 financial position, financial performance including other comprehensive income, cash flows and changes in equity 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. 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 the 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
of our auditorâs 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.
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 standalone financial statements for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditorâs 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 Matters
The Company has voluntarily revised standalone financial statements for the year ended March 31, 2021, as per National Company Law Tribunal (the âNCLTâ) approval dated December 22, 2021 under section 131(1) of the Companies Act, 2013, included in these standalone financial statements as comparatives. Those financial statements have been audited by us and we expressed an unmodified opinion on those revised standalone financial statements on December 31, 2021
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â a statement on the matters specified in paragraphs 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 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 the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
or entity, including foreign entities (âIntermediariesâ), 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 (âUltimate Beneficiariesâ) 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 have been received by the company from any person or entity, including foreign entities (âFunding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures that were 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 (a) and (b) contain any material misstatement.
v. No dividend has been declared or paid during the year by the
Company.
For S R B C & CO LLP Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Bharath N S Partner
Membership Number: 210934 UDIN: 22210934AIGHCU7576 Place of Signature: Mumbai Date: May 2, 2022
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.
In preparing the standalone financial statements, management is responsible for assessing the Companyâs 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.
Those charged with governance are also responsible for overseeing the Companyâs financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs 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 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 managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2022 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 these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31,2022 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditorâs 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 standalone financial statements -Refer Note 38 to the standalone 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 has been no delay in transferring amounts, required 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 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
Mar 31, 2021
Report on the Audit of the Revised Standalone Financial Statements Opinion
We have audited the accompanying revised standalone financial statements of CG Power and Industrial Solutions Limited (âthe Company"), which comprise the Revised Standalone Balance Sheet as at March 31,2021, the Revised Standalone Statement of Profit and Loss, including the Revised Standalone Statement of Other Comprehensive Income, the Revised Standalone Cash Flow Statement, the Revised Standalone Statement of Changes in Equity for the year then ended and notes to the Revised Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as the âRevised Standalone Financial Statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Revised Standalone Financial Statements give the information required by the Companies Act, 2013, as amended (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the Revised Standalone Financial Statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Revised Standalone Financial Statementsâ section of our report. We are independent of the Company in accordance with the âCode of Ethicsâ 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 Revised Standalone Financial Statements.
(i) We draw attention to note 3A(a) of the Revised Standalone Financial Statements, which describes that there are ongoing investigations by Serious Fraud Investigation Office (âSFIOâ) and other regulatory authorities. Pending completion
of such investigations, adjustments, if any, have not been considered by the management in these Revised Standalone Financial Statements.
(ii) We draw attention to note 1B of the Revised Standalone Financial Statements as regards completion of recasting and restatements of the standalone financial statements of the Company for the five years ended March 31, 2019 taken on record by National Company Law Tribunal (the âNCLTâ) and NCLT approval dated December 22, 2021 for voluntary revision under section 131 (1) of the Companies Act, 2013 of the Standalone Financial Statements for the year ended March 31, 2020 and March 31, 2021. The revised standalone financial statements for the year ended March 31, 2020 have been approved by the Board of Directors of the Company on December 31, 2021. The Company has now revised the original standalone financial statements for the year ended March 31, 2021, that were approved by the Board of Directors of the Company on June 11, 2021. Consequently, our audit report dated June 11, 2021 on the original standalone financial statements which contained a disclaimer of opinion, on those original standalone financial statements stands withdrawn and this report supersedes our audit report dated June 11, 2021.
Our opinion is not modified in respect of these matters.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Revised Standalone Financial Statements for the financial year ended March 31, 2021. These matters were addressed in the context of our audit of the Revised 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. We have fulfilled the responsibilities described in the Auditorâs responsibilities for the audit of the Revised Standalone Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Revised Standalone Financial Statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Revised Standalone Financial Statements.
Key audit matters |
How our audit addressed the key audit matter |
Revision of standalone financial statements (as described in note 1B of the Revised Standalone Financial Statements) |
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On March 5, 2020, basis application from Ministry of Corporate Affairs (âMCAâ), the National Company Law Tribunal (âNCLTâ) had allowed for reopening and recasting of books of accounts of the Company and its subsidiary companies for the 5 years ending March 31,2019, under section 130 of the Companies Act 2013. Recasting of those financial statements have been completed and taken on record by NCLT on October 26, 2021. The Company had also made an application to the NCLT for voluntary revision of books of accounts of the Company for the financial years 2019-20 and 2020-21 under section 131(1) of the Companies Act 2013, to give consequential impact of the above recasting and reauditing of such prior yearsâ financial statements. The NCLT approved such application on December 22, 2021. In accordance with the above, subsequent to year end, revision of the standalone financial statements for the five years ended March 31,2019 and also March 31,2020 have been completed. The effect of these revisions on the opening balances as on April 1, 2020 are described in note 3B of the Revised Standalone Financial Statements. The Revision of Standalone Financial Statements is identified as key audit matter considering consequential changes in opening balances as on April 1, 2020. |
Our audit procedures amongst others included the following: ⢠We obtained and read the order passed by NCLT for reopening and recasting of books of accounts of the Company and its subsidiary companies for the past 5 years ending March 31,2019, under section 130 of the Companies Act 2013. ⢠We obtained and read the NCLT order for taking on record the re-casted standalone financial statements for 5 years ending March 31,2019. ⢠We obtained and read the application to and order of the NCLT for voluntary revision of books of accounts of the Company for the financial years 2019-20 and 2020-21 under section 131(1) of the Companies Act 2013. ⢠We obtained the reconciliation prepared by the management in respect of impact of revision on the amounts reported in the approved standalone financial statements for the year ended March 31,2021. ⢠We tested reconciliations and treatment of the effect of changes in the books of accounts. ⢠We have assessed the disclosures made in note 3B of the Revised Standalone Financial Statements. |
Restructuring of Debts (as described in note 3A(b) of the Revised Standalone Financial Statements) |
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During the year on November 20, 2020, the Company executed the Master Implementation cum Compromise Settlement Agreement (âSettlement Agreementâ) with lenders and the Company has discharged and settled the existing credit facilities including corporate guarantees. Further, the lenders and the Company received a binding offer from Tube Investments of India Limited (âTIIâ), for resolving the debts of the Company and to infuse capital in the Company. During the year, the Company, lenders and TII executed the required binding agreement for one time settlement and restructuring of funded and unfunded credit facilities. After receiving necessary regulatory approvals and fulfilment of Conditions Precedents, the Board of the Company allotted securities to TII and discharged the liability of the lenders. Consequent to the settlement of outstanding debt and corporate guarantees, the Company recognised cessation of liability arising on settlement and restructuring of borrowings including interest thereon as per resolution plan amounting to Rs. 1426.89 crores and provision towards corporate guarantee obligation settlement amounting to Rs. 306.01 (including foreign exchange gain of Rs. 1.75 crores) respectively as an exceptional item in the statement of profit and loss during the year. The Restructuring of Debt is identified as key audit matter considering the significance of amounts involved. |
Our audit procedures amongst others included the following: ⢠We obtained and read the Master Implementation cum Compromise Settlement and Corporate guarantee settlement agreements. ⢠We obtained and read the minutes of the board meeting providing approvals in relation to restructuring of debt ⢠We tested the accounting entries in relation to debt restructuring and settlement of corporate guarantees and exceptional gain on the debt restructuring. ⢠We tested the computation prepared by the management of the Company in relation to debt restructuring and settlement of corporate guarantees. ⢠We traced the payment made to lenders and capital infusion in the bank statements of the Company. ⢠We obtained and read the No Objection Certificates provided by the lenders for settlement of the existing debts. ⢠We obtained direct bank confirmation for balance outstanding as on March 31,2021. ⢠We assessed the disclosures in the revised standalone financial statements in relation to restructuring of debt and settlement of corporate guarantees as exceptional items. |
Key audit matters |
How our audit addressed the key audit matter |
Recognition of Deferred Tax Asset (as described in note 24 of the Revised Standalone Financial Statements) |
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The Company has Deferred Tax Asset (DTA) of '' 727.27 crores as at March 31,2021 on tax losses based on availability of future taxable profits against which DTA will be utilized. The tax losses were primarily on account of write off of receivable balances in relation to various transactions, which are under investigations by regulatory authorities. Basis legal opinion, management has considered these written-offs as an allowable expense under the Income tax and recognized deferred tax assets on such losses. The recognition of deferred tax asset is identified as key audit matter considering the significance of amounts and judgements involved. |
Our audit procedures amongst others included the following: ⢠We obtained an understanding, assessed and tested the operating effectiveness of internal control relating to the measurement and recognition of deferred tax. ⢠We involved internal experts to assess tax computation as per the local fiscal regulations in India ⢠We tested on a sample basis the identification and quantification of differences between the recognition of assets and liabilities according to tax law and financial reporting in accordance with Indian Accounting Standards. ⢠We obtained and verified the budgeted forecast approved by the senior management which was in line with the projections approved by the Board of the Company for recoverability of deferred tax asset. ⢠We performed reasonability testing in relation to assumptions and estimates considered by the management for assessing recoverability of deferred tax asset ⢠We obtained and read the legal opinion considered by the management for recognisation of deferred tax assets on losses ⢠We assessed the disclosures in the Revised Standalone Financial Statements in |
Revenue recognition (as described in note 30 of the Revised Standalone Financial Statements) |
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The Company has two operating segments, namely, Power and Industrial Segment. |
Our audit procedures amongst others included the following: |
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The type of customers varies across these segments, ranging from Large Government |
⢠|
We read and understood the Companyâs accounting policy for timing of revenue |
companies to Original Equipment Manufacturers and Industrial Customers etc. |
recognition. |
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The Company has major revenue from sale of goods which is recognized at a point in time based on the terms of the contract with customers which may vary case to case, further revenue from construction contracts is recognized over period of time. Terms of sales arrangements with various customers within each of the operating segments, including Incoterms determine the timing of transfer of control and require judgment in |
⢠|
We understood the Companyâs revenue processes, including design and implementation of controls which vary based on product segment and customer, and tested the operating effectiveness of such controls in relation to revenue recognition. |
⢠|
On a sample basis, we tested contracts with customers, purchase orders issued by customers, and sales invoices raised by the Company to determine the timing of transfer of control along with pricing terms and the timing of revenue recognition in respect of such contracts. |
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determining timing of revenue recognition. |
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Due to the judgement relating to determination of point of time in satisfaction of performance obligations with respect to sale of products, this matter is considered as Key Audit Matter. |
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⢠|
Compared revenue with historical trends and where appropriate, conducted further enquiries and testing. |
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⢠|
On a sample basis, we analyzed revenue transactions near the reporting date and tested whether the timing of revenue was recognized in the appropriate period with reference to shipping records, sales invoices etc. for those transactions |
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⢠|
We evaluated the Companyâs accounting policies pertaining to revenue recognition and assessed compliance with the policies in terms of Ind AS 115 - Revenue from Contracts with Customers. |
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⢠|
We assessed the disclosures for compliance with applicable accounting standards. |
Information Other than the Financial Statements and Auditor''s Report Thereon
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the Revised Standalone Financial Statements and our auditorâs report thereon.
Our opinion on the Revised 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 Revised Standalone 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 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.
Responsibilities of Management and Those Charged with Governance for the Revised Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Revised Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity 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. 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 the 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 Revised Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Key audit matters |
How our audit addressed the key audit matter |
Claims and exposures relating to taxation and litigation (as described in note 39 of the Revised Standalone Financial Statements) |
|
The Company has disclosed contingent liabilities of Rs. 34.83 crores in respect of disputed claims/ levies under tax and legal matters. Taxation and litigation exposures have been identified as a key audit matter due to significant outstanding matters with authorities and management assessment towards potential financial impact of these matters will involve significant judgement and assumptions. |
Our audit procedures included the following: ⢠We understood the process and assessed the internal control environment relating to the identification, recognition and measurement of provisions for disputes, potential claims and litigation, and contingent liabilities. ⢠We obtained details of legal and tax disputed matters from management and assessed managementâs position through discussions on both the probability of success in significant cases, and the magnitude of any potential loss. ⢠We involved tax specialists to assist us in evaluating tax positions taken by management. ⢠We circulated legal confirmation for material litigations to external legal counsel and review their assessment and had a discussion on their assessment with the senior management of the Company. ⢠We assessed the relevant disclosures made in the Revised Standalone Financial Statements for compliance with the requirements of Ind AS 37. |
In preparing the Revised Standalone Financial Statements, management is responsible for assessing the Companyâs 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.
Those charged with governance are also responsible for overseeing the Companyâs financial reporting process.
Auditor''s Responsibilities for the Audit of the Revised Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Revised Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs 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 Revised 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 Revised 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 financial statements in place and the operating effectiveness of such controls.
viii. with respect to the other matters to be included in the Auditorâs 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 Revised Standalone Financial Statements - Refer Note 39 to the Revised Standalone Financial Statements;
(ii) the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs 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 Revised Standalone Financial Statements, including the disclosures, and whether the Revised Standalone 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 Revised Standalone Financial Statements for the financial year ended March 31, 2021 and are therefore the key audit matters. We describe these matters in our auditorâs 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.
I. The comparative figures for the year ended March 31,2020 of the Company included in these Revised Standalone Financial Statements, are as per the revised standalone financial statements of the Company for the year ended March 31, 2020, which have been audited by the Independent firm of Chartered Accountants approved by the NCLT vide its order dated December 22, 2021, who have issued an unmodified opinion on those revised standalone financial statements.
II. As mentioned in Note 1B to the Revised Standalone Financial Statements, the recasting of the standalone financial statements of the Company for the five years ended March 31, 2019 has been completed in accordance with the Section 130 of the Act and taken on record by National Company Law Tribunal (the âNCLTâ).
Report on Other Legal and Regulatory Requirements
Read with the matters related to revision of financial statements as stated in paragraph (ii) of the Emphasis of Matter section of this report and paragraph I of the Other Matters section of this report, as above, we report as follows;
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
i. 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;
ii. 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;
iii. the Revised Standalone Balance Sheet, the Revised Standalone Statement of Profit and Loss including the Revised Standalone Statement of Other Comprehensive Income, the Revised Standalone Cash Flow Statement and Revised Standalone Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
iv. in our opinion, the aforesaid Revised Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
v. on the basis of the written representations received from the directors as on March 31, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2021 from being appointed as a director in terms of Section 164(2) of the Act;
vi. with respect to the adequacy of the internal financial controls with reference to these Revised Standalone Financial Statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
vii. in our opinion remuneration of the Managing Director for the year ended March 31, 2021 is in excess of the limits applicable under section 197 of the Act, read with Schedule V thereto. Subsequent to year, the management has obtained approval of the shareholders for remuneration paid to the Managing Director in the extraordinary general meeting held on June 7, 2021 by way of a special resolution;
(iii) other than amount stated in Note 27(a) of the Revised Standalone Financial Statements, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
For S R B C & CO LLP Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
Membership Number: 210934 UDIN: 21210934AAAAIS2966 Place of Signature: Chennai Date: December 31, 2021
ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 OF THE HEADING âREPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSâ OF OUR REPORT OF EVEN DATE, READ WITH PARAGRAPH II OF THE OTHER MATTERS SECTION OF OUR REPORT OF EVEN DATE
(i) (a) The Company has maintained proper records showing full particulars,
including guantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but 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) According to the information and explanations given by the management and audit procedures performed by us, the title deeds of immovable properties, included in property, plant and eguipment are held in the name of the Company, except (i) the title deeds of immovable properties included in property plant and eguipment amounting to Rs 149.98 crores are pledged with the banks. The same has been independently confirmed by the Trustee of the bank;
(ii) Original title deeds of immovable properties included in property plant and eguipment amounting to Rs 11.96 crores are not available with the Company and hence we are unable to comment on the same, (iii) The land and building aggregating to Rs 188.62 crores, for which land lease deed have been expired. As explained to us, the Company is in the process of renewal of expired lease deed.
(ii) The inventory has been physically verified by the management during the year. In our opinion, the freguency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at March 31, 2021 and no material discrepancies were noticed in respect of such confirmations.
(iii) According to the information and explanations given to us and audit procedures performed by us during the year ended March 31, 2021, 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.
(iv) According to the information and explanations given to us, during the year ended March 31, 2021 (i) the Company has not given any loans, investments, guarantees, and securities in respect of which provisions of section 185 of the Companies Act 2013 are applicable; (ii) the Company has made investments, given loans and guarantees exceeding limits specified under section 186 of the Companies Act 2013, hence Company has not complied with the provisions of Section 186 of the Companies Act 2013.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) According to the information and explanations given to us and a certificate by cost accountant provide by the management, we have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture or service of Power and Industrial products, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) According to the information and explanations given to us, during the year ended March 31, 2021;
(a) undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases.
(b) no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) the dues of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax and cess on account of any dispute, are as follows:
Name of |
Nature of |
Amount |
Period |
Forum where the |
the Statute |
Dues |
Unpaid (? |
to which |
dispute is pending |
in crores) |
Amount relates |
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Income Tax |
Income Tax |
607.50* |
2015-2017 |
Commissioner of |
Act, 1961 |
and interest |
Income Tax (Appeals) |
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Central |
Sales Tax, |
308.29# |
1994-2017 |
Additional |
Sales Tax |
VAT, Penalty, |
Commissioner/ |
||
Act, 1956 |
Interest and |
Deputy Commissioner/ |
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and Sales |
Pending |
Joint Commissioner/ |
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Tax Acts of |
sales tax |
Commissioner |
||
various states forms |
(Appeals) |
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including |
6.49# |
1992-2017 |
Appellate Tribunal |
|
related entry tax |
1.11# |
1989-2007 |
High Court |
|
Central |
Excise Duty, |
3.98 |
2002-2016 |
Additional |
Excise Act, |
Penalty and |
Commissioner/ |
||
1944 |
Interest |
Deputy Commissioner/ Joint Commissioner/ Commissioner (Appeals) |
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4.50 |
1999-2015 |
Appellate Tribunal |
||
0.14 |
2001-2002 |
High Court |
||
Finance Act, |
Service Tax, |
13.12 |
2013-2014 |
Additional |
1994 |
Penalty and |
Commissioner/ |
||
Interest |
Deputy Commissioner/ Joint Commissioner/ Commissioner (Appeals) |
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0.05 |
2005-2007 |
Appellate Tribunal |
* Bombay High Court has stayed the demand of ? 606.30 crores. There is a stay from jurisdictional assessing officer on balance amount of ? 1.20 crores.
#The Company has collected âCâ Forms aggregating ? 243.79 Crores which it expects the authorities to accept to reduce total unpaid amount to ? 72.10 crores and further the liability will reduce to ? 36.66 crores after considering related entry tax impact. Further there is stay on these demands in terms of appellate forums procedures.
108 I CG POWER AND INDUSTRIAL SOLUTIONS LIMITED 2020-21
Mar 31, 2018
Report on the Standalone Financial Statements
1. We have audited the accompanying Standalone Financial Statements of CG Power and Industrial Solutions Limited (formerly known as Crompton Greaves Limited) (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, 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 then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Ind AS Financial Statementsâ).
Managementâs Responsibility for the Standalone Ind AS Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial performance including Other Comprehensive Income, Cash flows and Changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
3. 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 Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
4. Our responsibility is to express an opinion on these Standalone Ind AS Financial Statements based on our audit.
5. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
6. We conducted our audit of the Standalone Ind AS Financial Statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS Financial Statements are free from material misstatement.
7. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS Financial Statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Standalone Ind AS Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Board of Directors, as well as evaluating the overall presentation of the Standalone Ind AS Financial Statements.
8. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS Financial Statements.
Opinion
9. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its loss (including Other Comprehensive Income), the Changes in Equity and its Cash Flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
11. 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 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), Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account;
d) In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Ind AS specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;
e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ; and
g) With respect to the other matter to be included in the Auditorâs 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 Standalone Ind AS Financial Statements. (Refer note 38 to the Standalone Ind AS Financial Statements);
ii. The Company did not have any long-term contracts for which there were any material foreseeable losses; and
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Other Matter
12. The comparative Ind AS financial information of the Company for the year ended March 31, 2017, included in these Standalone Ind AS financial statements, have been audited by the previous auditor along with another firm of Chartered Accountants (âprevious joint auditorsâ). The report of the previous joint auditors on the comparative financial information dated May 26, 2017 expressed an unmodified opinion.
i. In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) As explained to us, these fixed assets have been physically verified by the management in accordance with a phased programme of verification, which in our opinion is reasonable, considering the size of the Company and nature of its assets. The frequency of physical verification is reasonable and no material discrepancies were noticed on such verification.
(c) According to information and explanations given to us, the title deeds of immovable properties are held in name of the Company.
ii. As explained to us, inventories have been physically verified by the management during the year other than inventory lying with third parties. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on such verification, which were not material, have been properly dealt with in the books of account.
iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. The Company has granted unsecured loans to companies covered in the register maintained under Section 189 of the act:
(a) the terms and conditions are not prejudicial to the interests of the Company;
(b) the receipts of principal amounts and interest have been regular / as per stipulations; and
(c) there are no overdue amounts for more than ninety days.
iv. According to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments, providing guarantees and securities.
v. According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. Accordingly, the paragraph 3(v) of the Order is not applicable to the Company.
vi. We have broadly reviewed the books of accounts and records maintained by the Company specified by the Central Government for the maintenance of cost records under section 148(1) of the Act with respect to its manufacturing activities and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.
vii. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amount deducted / accrued in the books of account in respect of undisputed statutory dues including provident fund, employeesâ state insurance, income tax, duty of customs, duty of excise, sales tax, value added tax, entry tax, service tax, cess, goods and services tax and any other statutory dues have generally been regularly deposited with the appropriate authorities.
According to the information and explanations given to us, no undisputed amount payable in respect of provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, goods and services tax, cess and other material statutory dues were in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the records examined by us, the particulars of income tax, sales tax, service tax duty of customs, duty of excise and value added taxes at March 31, 2018 which have not been deposited on account of a dispute pending, are as under:
Name ofthe Statute |
Nature of the disputed dues |
Amount Rs. crore* |
Period to which the amount relates |
Forum where disputes are pending |
Income Tax Act,1961 |
Tax,Interest & Penalty |
14.64 |
2011-12, 2013-14, 2014-15 |
Commissionerate (Appeals) |
The Central Excise Act 1944, The Customs Act 1962, and Service Tax under the finance Act 1994 |
Duty, Service tax, Interest and Penalty |
0.21 |
2001-02, 2002-03, 2004-05 to 2007-08 |
High Court |
7.87 |
1991-92, 1999-2000 to 2014-15 |
CESTAT /Tribunal |
||
18.80 |
2002-03 to 2017-18 |
Commissionerate (Appeals) |
||
The Central Sales Tax Act 1956, Local Sales Tax Acts and Works Contract Tax Act |
Tax,Interest and Penalty |
1.14 |
1989-90, 1991-92, 1996-97, 1999-2000, 2006-07 |
High Court |
44.92 |
1992-93, 1994-95, 1996-97, 2000-01 to 2003-04, 2005-06 to 2008-09, 2011-12, 2014-15 |
CESTAT/Tribunal |
||
163.18 |
1997-98 to 1999-2000, 2001-02 to 2015-16 |
Commissionerate (Appeals) |
(*net of pre-deposit paid in getting the stay / appeal admitted)
viii. According to information and explanations given to us and as per the records of the Company examined by us, the Company has not defaulted in repayment of loans or borrowings to banks. The Company has not taken any loans or borrowings from financial institutions and Government. The Company has not issued any debentures.
ix. According to information and explanations given to us, the Company has not raised money by way of initial public offer or further public offer (including debt instruments). In our opinion and according to the explanations given to us, on an overall basis, the term loans were applied for the purposes for which those were raised.
x. During the course of our examination of the books and records of the Company carried out in accordance with generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any fraud by the Company or any fraud on the Company by its officers or employees noticed or reported during the year nor have we been informed of such case by the management.
xi. According to information and explanations given to us, the managerial remuneration has been paid or provided for in accordance with the approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. According to information and explanations given to us, the Company is not a Nidhi Company. Accordingly, the paragraph 3(xii) of the Order is not applicable to the Company.
xiii. According to information and explanations given to us, all transactions with the related parties are in compliance with Sections 177 and 188 of the act, where applicable and the relevant details have been disclosed in the Standalone Ind AS Financial Statements as required by the applicable Indian Accounting Standards.
xiv. According to information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the Paragraph 3(xiv) of the order is not applicable to the Company.
xv. According to information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him during the year. Accordingly, the Paragraph 3(xv) of the Order is not applicable to the Company.
xvi. According to 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.
1. We have audited the internal financial controls over financial reporting of CG Power and Industrial Solutions Limited (formerly known as Crompton Greaves Limited) (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the Standalone Ind AS Financial Statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
2. The Companyâs 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 (the âGuidance Noteâ) 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 Companyâs 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 (the âActâ).
Auditorâs Responsibility
3. Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by the Institute of Chartered Accountantsof India (ICAI) and deemed to be prescribed under Section 143(10) of the Act, 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.
4. 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 auditorâs judgement, including the assessment of the risks of material misstatement of the Standalone Ind AS Financial Statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
6. A Companyâs 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 Companyâs 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 companyâs assets that could have a material effect on the Financial Statements.
Inherent Limitations of Internal Financial Controls over Financial
Reporting
7. 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
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, 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 issued by the Institute of Chartered Accountants of India (ICAI).
K. K. MANKESHWAR & CO.
CHARTERED ACCOUNTANTS
Firmâs Registration No. 106009W
by the hand of
ASHWIN MANKESHWAR
PARTNER
Membership No. 046219
Place: Gurgaon
Date: May 30, 2018
Mar 31, 2017
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of CG Power and Industrial Solutions Limited (Formerly known as Crompton Greaves Limited) (the âCompanyâ), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe standalone Ind AS financial statementsâ).
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the âActâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including Other Comprehensive Income, Cash Flows and Changes in Equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
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 the 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Board of Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2017, and its profit (including Other
Comprehensive Income), its Cash Flows and Changes in Equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (the âOrderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure âAâ, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
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 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), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164(2) of the Act;
(f) With respect to the adequacy ofthe internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure âBâ; and
(g) With respect to the other matters to be included in the Auditorâs 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:
(1) the Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements (Refer Note 39 to the standalone Ind AS financial statements);
(2) the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
(3) there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and
(4) The Company has provided requisite disclosures in Note 40 to these standalone Ind AS financial statements as to the holdings of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representations provided to us by the management, we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management.
(i) In respect of its Axed assets:
(a) The Company has maintained proper records showing full particulars including quantitative details and situation of
Axed assets.
(b) As explained to us, these Axed assets have been physically verified by the management in accordance with a phased programme of verification, which in our opinion is reasonable, considering the size of the Company and nature of its assets. The frequency of physical verification is reasonable and no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us, the title deeds of immovable properties are held in the name of the Company.
(ii) As explained to us, inventories have been physically verified by the management during the year other than inventory lying with third parties. In our opinion, the frequency of such verification is reasonable. In respect of inventory lying with third parties, we have relied on the confirmations obtained by the management from such parties. The discrepancies noticed on such verification, which were not material, have been properly dealt with in the books of account.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to Arms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. The Company has granted unsecured loans to companies covered in the register maintained under Section 189 of the Act:
(a) the terms and conditions are not prejudicial to the Companyâs interest;
(b) the receipts of principal amounts and interest have been regular / as per stipulations; and
(c) there are no overdue amounts for more than ninety days.
(iv) According to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments, providing guarantees and securities.
(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. Accordingly, the Paragraph 3(v) of the Order is not applicable to the Company.
(vi) We have broadly reviewed the books of account and records maintained by the Company specified by the Central Government for the maintenance of cost records under Section 148(1) of the Act with respect to its manufacturing activities and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amount deducted / accrued in the books of account in respect of undisputed statutory dues including provident fund, employeesâ state insurance, duty of customs, duty of excise, sales tax, value added tax, entry tax, service tax, income tax, cess and any other statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in few cases with regards to sales tax, entry tax, service tax, and income tax (tax deducted at source).
According to the information and explanations given to us, no undisputed amount payable in respect of provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues were in arrears as at 31st March, 2017 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the records examined by us, the particulars of income tax, sales tax, service tax, duty of customs, duty of excise, and value added tax as at 31st March, 2017 which have not been deposited on account of a dispute pending, are as under:
Name of the Statute |
Nature of the disputed dues |
Amount Rs, crore* |
Period to which the amount relates |
Forum where disputes is pending |
The Income Tax Act, 1961 |
Tax, Interest and Penalty |
13.15 |
2011-12 2013-14 |
Commissioner ate (Appeals) |
The Central Excise Act, 1944, The Customs Act, 1962 and Service Tax |
Duty, Service tax, Interest and Penalty |
0.21 |
2001-02 and 2002-03 |
High Court |
under the Finance Act, 1994 |
10.77 |
1991-92, 1999-00 to 2014-15 |
Tribunal / CESTAT |
|
17.87 |
2002-03 to 2015-16 |
Commissioner ate (Appeals) |
||
The Central Sales Tax Act, 1956, Local Sales Tax Act and Works Contract Tax Act |
Tax, Interest and Penalty |
1.14 |
1989-90, 1991-92, 1996-97, 1999-00, 2006-07 |
High Court |
50.94 |
1992-93, 1994-95, 1996-97, 2000-01 to 2003-04, 2005-06 to 2008-09, 2011-12, 2014-15 |
CESTAT / Tribunal |
||
106.42 |
1997-98 to 1999-00, 2001-02 to 2014-15 |
Commissioner ate (Appeals) |
(*net of pre-deposit paid in getting the stay / appeal admitted)
(viii) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not defaulted in repayment of loans or borrowings to banks. The Company has not taken any loans or borrowings from financial institutions and Government. The Company has not issued any debentures.
(ix) According to the information and explanations given to us, the Company has not raised money by way of initial public offer or further public offer (including debt instruments). In our opinion and according to the explanations given to us, on an overall basis, the term loans were applied for the purposes for which those were raised.
(x) During the course of our examination of the books and records of the Company carried out in accordance with generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any fraud by the Company or any fraud on the Company by its officers or employees noticed or reported during the year nor have we been informed of such case by management.
(xi) According to the information and explanations given to us, the managerial remuneration has been paid or provided in accordance with the approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, the Paragraph 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us, all transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable and the relevant details have been disclosed in the standalone Ind AS financial statements etc., as required by the applicable Indian Accounting Standards.
(xiv) According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the Paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him during the year. Accordingly, the Paragraph 3(xv) of the Order is 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.
We have audited the internal financial controls over financial reporting of CG Power and Industrial Solutions Limited (Formerly known as Crompton Greaves Limited) (the âCompanyâ) as of 31st March, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs 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 (the âGuidance Noteâ) 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 Companyâs 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 (the âActâ).
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, 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 auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companyâs 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 Companyâs 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 authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companyâs 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 system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2017, 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 issued by the ICAI.
For SHARP & TANNAN For CHATURVEDI & SHAH
CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS
Firmâs Registration No.109982W Firmâs Registration No.101720W
Vinayak M. Padwal Parag D. Mehta
PARTNER PARTNER
Membership No. 049639 Membership No. 113904
Place: New Delhi
Dated: 26th May, 2017
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Crompton Greaves Limited (the ''Company''), which comprise the Balance
Sheet as at 31st March, 2016, the Statement of Profit and Loss. the
Statement of Changes in Equity and the Cash Flows Statement for the
year then ended, and a summary of the significant accounting policies
and other explanatory information.
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 Companies Act, 2013 (the ''Act'') with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. 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 financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and Rules made there
under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. 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. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that gives a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and reasonableness of
the accounting estimates made by the Company''s Directors as well as
evaluating the overall presentation of the financial statements.
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.
Opinion
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 Act, in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31 st March, 2016, and its loss, changes in equity and its cash
flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (the
''Order'') issued by the Central Government of India in terms of Section
143(11) of the Act, we give in the Annexure ''A, a Statement on the
matters specified in paragraphs 3 and 4 of the Order, to the extent
applicable.
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
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. the Statement
of Changes in Equity and the Cash Flow Statement dealt with by this
report are in agreement with the books of account;
(d) in our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards 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 31st March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2016
from being appointed as a director in terms of Section 164(2) of the
Act; and
(f) with respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in Annexure ''B'';
(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:
(1) the Company has disclosed the impact of pending litigations on its
financial position in its financial statements (Refer Note 39 to the
Financial Statements):
(2) the Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses; and
(3) there has been no delay in transferring amounts, required to be
transferred, to Investor Education and Protection Fund by the Company.
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, these fixed assets have been physically
verified by the management in accordance with a phased programme of
verification, which in our opinion is reasonable. considering the size
of the Company and nature of its assets. The frequency of physical
verification is reasonable and no material discrepancies were noticed
on such verification.
(c) According to the information and explanations given to us, the
title deeds of immovable properties are held in the name of the
Company.
(ii) As explained to us, inventories have been physically verified by
the management during the year. In our opinion, the frequency of such
verification is reasonable. The discrepancies noticed on such
verification, which were not material, have been properly dealt with in
the books of account.
(iii) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to firms,
limited liability partnerships or other parties covered in the register
maintained under Section 189 of the Act. The Company has granted
unsecured loans to companies covered in the register maintained under
Section 189 of the Act:
(a) the terms and conditions are not prejudicial to the Company''s
interest;
(b) the receipts of principle amounts and interest have been regular /
as per stipulations; and
(c) there are no overdue amounts for more than ninety days.
(iv) According to the information and explanations given to us, the
Company has complied with the provisions of Sections 185 and 186 of the
Act in respect of loans, investments, guarantees and security.
(v) According to the information and explanations given to us and the
records examined by us, the Company has not accepted any deposits from
the public during the year. Accordingly, the Paragraph 3(v) of the
Order is not applicable to the Company.
(vi) We have broadly reviewed the books of account and records
maintained by the Company specified by the Central Government for the
maintenance of cost records under Section 148(1) of the Act with
respect to its manufacturing activities and are of the opinion that
prima facie, the prescribed accounts and records have been made and
maintained. The contents of these accounts and records have not been
examined by us.
(vii) (a) According to the information and explanations given to us,
the Company is generally regular in depositing undisputed statutory
dues including provident fund, employees'' state insurance, income tax,
sales tax, service tax, duty of customs, duty of excise, value added
tax, cess and any other statutory dues, where applicable, to the
appropriate authorities. According to the information and explanations
given to us, there are no arrears of outstanding statutory dues as at
the last day of the financial year for a period of more than six months
from the date they became payable.
(b) According to the information and explanations given to us and the
records examined by us, the particulars of income tax, sales tax,
service tax, duty of customs, duty of excise, and value added tax as at
31st March, 2016 which have not been deposited on account of a dispute
pending, are as under:
Name of the staute Nature of Amount Period to Forum where
the dispu Rs,core which the disputtes are
ted dues amount pending
relates
The Income
Tax Act, Tax,
interest 18.94 2010-11 Commissionerate
1961 and
penalty 2012-13 (Appeals)
The Central Sales Tax,
interest 1.11 1989-90 High Court
Tax Act, 1956,
Local and
penalty 1999-00
Sales Tax
Acts and 1991-92
Works Contract
Tax 1996-97
Act
26.54 1992-93 Tribunal /
1994-95 CESTAT
2000-01
to 2010-11
2014-15
94.65 1999-00 Commissionerate
1997-98 (Appeals)
1998-99
2001-02 to
2014-15
The Central
Excise Duty,
service 0.21 1986-87 High Court
Act, 1944, the tax,
interest to 1988-89
Customs Act, 1962 and
penalty 2001-02
and Service Tax 2002-03
under the
Finance 2004-05
Act, 1994 to 2007-08
11.09 1991-92 CESTAT /
1998-99
to Tribunal
2013-14
13.44 2002-03
to Commissionerate
2015-16 (Appeals)
(*net of pre-deposit paid in getting the stay / appeal admitted)
(viii) According to the information and explanations given to us and as
per the records of the Company examined by us, the Company has not
defaulted in repayment of loans or borrowings to financial institutions
and banks. The Company has not taken any loans or borrowings from
Government. The Company has not issued any debentures. Accordingly, the
Paragraph 3(viii) of the Order is not applicable to the Company.
(ix) According to the information and explanations given to us, the
Company has not raised monies by way of initial public offer or further
public offer (including debt instruments). In our opinion and according
to the explanations given to us, on an overall basis, the term loans
were applied for the purposes for which those were raised.
(x) During the course of our examination of the books and records of
the Company carried out in accordance with generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any fraud by the Company or
any fraud on the Company by its officers or employees noticed or
reported during the year nor have we been informed of such case by
management.
(xi) According to the information and explanations given to us, the
managerial remuneration has been paid or provided in accordance with
the approvals mandated by the provisions of Section 197 read with
Schedule V to the Act.
(xii) According to the information and explanations given to us, the
Company is not a Nidhi company. Accordingly, the Paragraph 3(xii) of
the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us, all
transactions with the related parties are in compliance with Sections
177 and 188 of the Act, where applicable and the relevant details have
been disclosed in the financial statements etc., as required by the
applicable accounting standards.
(xiv) According to the information and explanations given to us, the
Company has not made any preferential allotment or private placement of
shares or fully or partly convertible debentures during the year.
Accordingly, the Paragraph 3(xiv) of the Order is not applicable to the
Company.
(xv) According to the information and explanations given to us, the
Company has not entered into any non-cash transactions with directors
or persons connected with him during the year. Accordingly, the
Paragraph 3(xv) of the Order is 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.
SHARP & TANNAN CHARTERED ACCOUNTANTS
Firm''s Registration No.109982W by the hand of
Milind P. Phadke PARTNER
Mumbai, 27th May, 2016 Membership No. 033013
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Crompton Greaves Limited (the ''Company''), which comprise the Balance
Sheet as at 31st March, 2016, the Statement of Profit and Loss. the
Statement of Changes in Equity and the Cash Flows Statement for the
year then ended, and a summary of the significant accounting policies
and other explanatory information.
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 Companies Act, 2013 (the ''Act'') with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. 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 financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and Rules made there
under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. 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. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that gives a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and reasonableness of
the accounting estimates made by the Company''s Directors as well as
evaluating the overall presentation of the financial statements.
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.
Opinion
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 Act, in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31 st March, 2016, and its loss, changes in equity and its cash
flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (the
''Order'') issued by the Central Government of India in terms of Section
143(11) of the Act, we give in the Annexure ''A, a Statement on the
matters specified in paragraphs 3 and 4 of the Order, to the extent
applicable.
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
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. the Statement
of Changes in Equity and the Cash Flow Statement dealt with by this
report are in agreement with the books of account;
(d) in our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards 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 31st March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2016
from being appointed as a director in terms of Section 164(2) of the
Act; and
(f) with respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in Annexure ''B'';
(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:
(1) the Company has disclosed the impact of pending litigations on its
financial position in its financial statements (Refer Note 39 to the
Financial Statements):
(2) the Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses; and
(3) there has been no delay in transferring amounts, required to be
transferred, to Investor Education and Protection Fund by the Company.
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, these fixed assets have been physically
verified by the management in accordance with a phased programme of
verification, which in our opinion is reasonable. considering the size
of the Company and nature of its assets. The frequency of physical
verification is reasonable and no material discrepancies were noticed
on such verification.
(c) According to the information and explanations given to us, the
title deeds of immovable properties are held in the name of the
Company.
(ii) As explained to us, inventories have been physically verified by
the management during the year. In our opinion, the frequency of such
verification is reasonable. The discrepancies noticed on such
verification, which were not material, have been properly dealt with in
the books of account.
(iii) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to firms,
limited liability partnerships or other parties covered in the register
maintained under Section 189 of the Act. The Company has granted
unsecured loans to companies covered in the register maintained under
Section 189 of the Act:
(a) the terms and conditions are not prejudicial to the Company''s
interest;
(b) the receipts of principle amounts and interest have been regular /
as per stipulations; and
(c) there are no overdue amounts for more than ninety days.
(iv) According to the information and explanations given to us, the
Company has complied with the provisions of Sections 185 and 186 of the
Act in respect of loans, investments, guarantees and security.
(v) According to the information and explanations given to us and the
records examined by us, the Company has not accepted any deposits from
the public during the year. Accordingly, the Paragraph 3(v) of the
Order is not applicable to the Company.
(vi) We have broadly reviewed the books of account and records
maintained by the Company specified by the Central Government for the
maintenance of cost records under Section 148(1) of the Act with
respect to its manufacturing activities and are of the opinion that
prima facie, the prescribed accounts and records have been made and
maintained. The contents of these accounts and records have not been
examined by us.
(vii) (a) According to the information and explanations given to us,
the Company is generally regular in depositing undisputed statutory
dues including provident fund, employees'' state insurance, income tax,
sales tax, service tax, duty of customs, duty of excise, value added
tax, cess and any other statutory dues, where applicable, to the
appropriate authorities. According to the information and explanations
given to us, there are no arrears of outstanding statutory dues as at
the last day of the financial year for a period of more than six months
from the date they became payable.
(b) According to the information and explanations given to us and the
records examined by us, the particulars of income tax, sales tax,
service tax, duty of customs, duty of excise, and value added tax as at
31st March, 2016 which have not been deposited on account of a dispute
pending, are as under:
Name of the staute Nature of Amount Period to Forum where
the dispu Rs,core which the disputtes are
ted dues amount pending
relates
The Income
Tax Act, Tax,
interest 18.94 2010-11 Commissionerate
1961 and
penalty 2012-13 (Appeals)
The Central Sales Tax,
interest 1.11 1989-90 High Court
Tax Act, 1956,
Local and
penalty 1999-00
Sales Tax
Acts and 1991-92
Works Contract
Tax 1996-97
Act
26.54 1992-93 Tribunal /
1994-95 CESTAT
2000-01
to 2010-11
2014-15
94.65 1999-00 Commissionerate
1997-98 (Appeals)
1998-99
2001-02 to
2014-15
The Central
Excise Duty,
service 0.21 1986-87 High Court
Act, 1944, the tax,
interest to 1988-89
Customs Act, 1962 and
penalty 2001-02
and Service Tax 2002-03
under the
Finance 2004-05
Act, 1994 to 2007-08
11.09 1991-92 CESTAT /
1998-99
to Tribunal
2013-14
13.44 2002-03
to Commissionerate
2015-16 (Appeals)
(*net of pre-deposit paid in getting the stay / appeal admitted)
(viii) According to the information and explanations given to us and as
per the records of the Company examined by us, the Company has not
defaulted in repayment of loans or borrowings to financial institutions
and banks. The Company has not taken any loans or borrowings from
Government. The Company has not issued any debentures. Accordingly, the
Paragraph 3(viii) of the Order is not applicable to the Company.
(ix) According to the information and explanations given to us, the
Company has not raised monies by way of initial public offer or further
public offer (including debt instruments). In our opinion and according
to the explanations given to us, on an overall basis, the term loans
were applied for the purposes for which those were raised.
(x) During the course of our examination of the books and records of
the Company carried out in accordance with generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any fraud by the Company or
any fraud on the Company by its officers or employees noticed or
reported during the year nor have we been informed of such case by
management.
(xi) According to the information and explanations given to us, the
managerial remuneration has been paid or provided in accordance with
the approvals mandated by the provisions of Section 197 read with
Schedule V to the Act.
(xii) According to the information and explanations given to us, the
Company is not a Nidhi company. Accordingly, the Paragraph 3(xii) of
the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us, all
transactions with the related parties are in compliance with Sections
177 and 188 of the Act, where applicable and the relevant details have
been disclosed in the financial statements etc., as required by the
applicable accounting standards.
(xiv) According to the information and explanations given to us, the
Company has not made any preferential allotment or private placement of
shares or fully or partly convertible debentures during the year.
Accordingly, the Paragraph 3(xiv) of the Order is not applicable to the
Company.
(xv) According to the information and explanations given to us, the
Company has not entered into any non-cash transactions with directors
or persons connected with him during the year. Accordingly, the
Paragraph 3(xv) of the Order is 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.
SHARP & TANNAN CHARTERED ACCOUNTANTS
Firm''s Registration No.109982W by the hand of
Milind P. Phadke PARTNER
Mumbai, 27th May, 2016 Membership No. 033013
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Crompton Greaves Limited (the ''Company''), which comprise the Balance
Sheet as at 31st March, 2016, the Statement of Profit and Loss. the
Statement of Changes in Equity and the Cash Flows Statement for the
year then ended, and a summary of the significant accounting policies
and other explanatory information.
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 Companies Act, 2013 (the ''Act'') with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. 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 financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and Rules made there
under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. 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. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that gives a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and reasonableness of
the accounting estimates made by the Company''s Directors as well as
evaluating the overall presentation of the financial statements.
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.
Opinion
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 Act, in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31 st March, 2016, and its loss, changes in equity and its cash
flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (the
''Order'') issued by the Central Government of India in terms of Section
143(11) of the Act, we give in the Annexure ''A, a Statement on the
matters specified in paragraphs 3 and 4 of the Order, to the extent
applicable.
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
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. the Statement
of Changes in Equity and the Cash Flow Statement dealt with by this
report are in agreement with the books of account;
(d) in our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards 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 31st March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2016
from being appointed as a director in terms of Section 164(2) of the
Act; and
(f) with respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in Annexure ''B'';
(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:
(1) the Company has disclosed the impact of pending litigations on its
financial position in its financial statements (Refer Note 39 to the
Financial Statements):
(2) the Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses; and
(3) there has been no delay in transferring amounts, required to be
transferred, to Investor Education and Protection Fund by the Company.
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, these fixed assets have been physically
verified by the management in accordance with a phased programme of
verification, which in our opinion is reasonable. considering the size
of the Company and nature of its assets. The frequency of physical
verification is reasonable and no material discrepancies were noticed
on such verification.
(c) According to the information and explanations given to us, the
title deeds of immovable properties are held in the name of the
Company.
(ii) As explained to us, inventories have been physically verified by
the management during the year. In our opinion, the frequency of such
verification is reasonable. The discrepancies noticed on such
verification, which were not material, have been properly dealt with in
the books of account.
(iii) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to firms,
limited liability partnerships or other parties covered in the register
maintained under Section 189 of the Act. The Company has granted
unsecured loans to companies covered in the register maintained under
Section 189 of the Act:
(a) the terms and conditions are not prejudicial to the Company''s
interest;
(b) the receipts of principle amounts and interest have been regular /
as per stipulations; and
(c) there are no overdue amounts for more than ninety days.
(iv) According to the information and explanations given to us, the
Company has complied with the provisions of Sections 185 and 186 of the
Act in respect of loans, investments, guarantees and security.
(v) According to the information and explanations given to us and the
records examined by us, the Company has not accepted any deposits from
the public during the year. Accordingly, the Paragraph 3(v) of the
Order is not applicable to the Company.
(vi) We have broadly reviewed the books of account and records
maintained by the Company specified by the Central Government for the
maintenance of cost records under Section 148(1) of the Act with
respect to its manufacturing activities and are of the opinion that
prima facie, the prescribed accounts and records have been made and
maintained. The contents of these accounts and records have not been
examined by us.
(vii) (a) According to the information and explanations given to us,
the Company is generally regular in depositing undisputed statutory
dues including provident fund, employees'' state insurance, income tax,
sales tax, service tax, duty of customs, duty of excise, value added
tax, cess and any other statutory dues, where applicable, to the
appropriate authorities. According to the information and explanations
given to us, there are no arrears of outstanding statutory dues as at
the last day of the financial year for a period of more than six months
from the date they became payable.
(b) According to the information and explanations given to us and the
records examined by us, the particulars of income tax, sales tax,
service tax, duty of customs, duty of excise, and value added tax as at
31st March, 2016 which have not been deposited on account of a dispute
pending, are as under:
Name of the staute Nature of Amount Period to Forum where
the dispu Rs,core which the disputtes are
ted dues amount pending
relates
The Income
Tax Act, Tax,
interest 18.94 2010-11 Commissionerate
1961 and
penalty 2012-13 (Appeals)
The Central Sales Tax,
interest 1.11 1989-90 High Court
Tax Act, 1956,
Local and
penalty 1999-00
Sales Tax
Acts and 1991-92
Works Contract
Tax 1996-97
Act
26.54 1992-93 Tribunal /
1994-95 CESTAT
2000-01
to 2010-11
2014-15
94.65 1999-00 Commissionerate
1997-98 (Appeals)
1998-99
2001-02 to
2014-15
The Central
Excise Duty,
service 0.21 1986-87 High Court
Act, 1944, the tax,
interest to 1988-89
Customs Act, 1962 and
penalty 2001-02
and Service Tax 2002-03
under the
Finance 2004-05
Act, 1994 to 2007-08
11.09 1991-92 CESTAT /
1998-99
to Tribunal
2013-14
13.44 2002-03
to Commissionerate
2015-16 (Appeals)
(*net of pre-deposit paid in getting the stay / appeal admitted)
(viii) According to the information and explanations given to us and as
per the records of the Company examined by us, the Company has not
defaulted in repayment of loans or borrowings to financial institutions
and banks. The Company has not taken any loans or borrowings from
Government. The Company has not issued any debentures. Accordingly, the
Paragraph 3(viii) of the Order is not applicable to the Company.
(ix) According to the information and explanations given to us, the
Company has not raised monies by way of initial public offer or further
public offer (including debt instruments). In our opinion and according
to the explanations given to us, on an overall basis, the term loans
were applied for the purposes for which those were raised.
(x) During the course of our examination of the books and records of
the Company carried out in accordance with generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any fraud by the Company or
any fraud on the Company by its officers or employees noticed or
reported during the year nor have we been informed of such case by
management.
(xi) According to the information and explanations given to us, the
managerial remuneration has been paid or provided in accordance with
the approvals mandated by the provisions of Section 197 read with
Schedule V to the Act.
(xii) According to the information and explanations given to us, the
Company is not a Nidhi company. Accordingly, the Paragraph 3(xii) of
the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us, all
transactions with the related parties are in compliance with Sections
177 and 188 of the Act, where applicable and the relevant details have
been disclosed in the financial statements etc., as required by the
applicable accounting standards.
(xiv) According to the information and explanations given to us, the
Company has not made any preferential allotment or private placement of
shares or fully or partly convertible debentures during the year.
Accordingly, the Paragraph 3(xiv) of the Order is not applicable to the
Company.
(xv) According to the information and explanations given to us, the
Company has not entered into any non-cash transactions with directors
or persons connected with him during the year. Accordingly, the
Paragraph 3(xv) of the Order is 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.
SHARP & TANNAN CHARTERED ACCOUNTANTS
Firm''s Registration No.109982W by the hand of
Milind P. Phadke PARTNER
Mumbai, 27th May, 2016 Membership No. 033013
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Crompton Greaves Limited (the ''Company''), which comprise the Balance
Sheet as at 31st March, 2016, the Statement of Profit and Loss. the
Statement of Changes in Equity and the Cash Flows Statement for the
year then ended, and a summary of the significant accounting policies
and other explanatory information.
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 Companies Act, 2013 (the ''Act'') with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. 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 financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and Rules made there
under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. 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. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that gives a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and reasonableness of
the accounting estimates made by the Company''s Directors as well as
evaluating the overall presentation of the financial statements.
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.
Opinion
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 Act, in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31 st March, 2016, and its loss, changes in equity and its cash
flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (the
''Order'') issued by the Central Government of India in terms of Section
143(11) of the Act, we give in the Annexure ''A, a Statement on the
matters specified in paragraphs 3 and 4 of the Order, to the extent
applicable.
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
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. the Statement
of Changes in Equity and the Cash Flow Statement dealt with by this
report are in agreement with the books of account;
(d) in our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards 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 31st March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2016
from being appointed as a director in terms of Section 164(2) of the
Act; and
(f) with respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in Annexure ''B'';
(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:
(1) the Company has disclosed the impact of pending litigations on its
financial position in its financial statements (Refer Note 39 to the
Financial Statements):
(2) the Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses; and
(3) there has been no delay in transferring amounts, required to be
transferred, to Investor Education and Protection Fund by the Company.
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, these fixed assets have been physically
verified by the management in accordance with a phased programme of
verification, which in our opinion is reasonable. considering the size
of the Company and nature of its assets. The frequency of physical
verification is reasonable and no material discrepancies were noticed
on such verification.
(c) According to the information and explanations given to us, the
title deeds of immovable properties are held in the name of the
Company.
(ii) As explained to us, inventories have been physically verified by
the management during the year. In our opinion, the frequency of such
verification is reasonable. The discrepancies noticed on such
verification, which were not material, have been properly dealt with in
the books of account.
(iii) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to firms,
limited liability partnerships or other parties covered in the register
maintained under Section 189 of the Act. The Company has granted
unsecured loans to companies covered in the register maintained under
Section 189 of the Act:
(a) the terms and conditions are not prejudicial to the Company''s
interest;
(b) the receipts of principle amounts and interest have been regular /
as per stipulations; and
(c) there are no overdue amounts for more than ninety days.
(iv) According to the information and explanations given to us, the
Company has complied with the provisions of Sections 185 and 186 of the
Act in respect of loans, investments, guarantees and security.
(v) According to the information and explanations given to us and the
records examined by us, the Company has not accepted any deposits from
the public during the year. Accordingly, the Paragraph 3(v) of the
Order is not applicable to the Company.
(vi) We have broadly reviewed the books of account and records
maintained by the Company specified by the Central Government for the
maintenance of cost records under Section 148(1) of the Act with
respect to its manufacturing activities and are of the opinion that
prima facie, the prescribed accounts and records have been made and
maintained. The contents of these accounts and records have not been
examined by us.
(vii) (a) According to the information and explanations given to us,
the Company is generally regular in depositing undisputed statutory
dues including provident fund, employees'' state insurance, income tax,
sales tax, service tax, duty of customs, duty of excise, value added
tax, cess and any other statutory dues, where applicable, to the
appropriate authorities. According to the information and explanations
given to us, there are no arrears of outstanding statutory dues as at
the last day of the financial year for a period of more than six months
from the date they became payable.
(b) According to the information and explanations given to us and the
records examined by us, the particulars of income tax, sales tax,
service tax, duty of customs, duty of excise, and value added tax as at
31st March, 2016 which have not been deposited on account of a dispute
pending, are as under:
Name of the staute Nature of Amount Period to Forum where
the dispu Rs,core which the disputtes are
ted dues amount pending
relates
The Income
Tax Act, Tax,
interest 18.94 2010-11 Commissionerate
1961 and
penalty 2012-13 (Appeals)
The Central Sales Tax,
interest 1.11 1989-90 High Court
Tax Act, 1956,
Local and
penalty 1999-00
Sales Tax
Acts and 1991-92
Works Contract
Tax 1996-97
Act
26.54 1992-93 Tribunal /
1994-95 CESTAT
2000-01
to 2010-11
2014-15
94.65 1999-00 Commissionerate
1997-98 (Appeals)
1998-99
2001-02 to
2014-15
The Central
Excise Duty,
service 0.21 1986-87 High Court
Act, 1944, the tax,
interest to 1988-89
Customs Act, 1962 and
penalty 2001-02
and Service Tax 2002-03
under the
Finance 2004-05
Act, 1994 to 2007-08
11.09 1991-92 CESTAT /
1998-99
to Tribunal
2013-14
13.44 2002-03
to Commissionerate
2015-16 (Appeals)
(*net of pre-deposit paid in getting the stay / appeal admitted)
(viii) According to the information and explanations given to us and as
per the records of the Company examined by us, the Company has not
defaulted in repayment of loans or borrowings to financial institutions
and banks. The Company has not taken any loans or borrowings from
Government. The Company has not issued any debentures. Accordingly, the
Paragraph 3(viii) of the Order is not applicable to the Company.
(ix) According to the information and explanations given to us, the
Company has not raised monies by way of initial public offer or further
public offer (including debt instruments). In our opinion and according
to the explanations given to us, on an overall basis, the term loans
were applied for the purposes for which those were raised.
(x) During the course of our examination of the books and records of
the Company carried out in accordance with generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any fraud by the Company or
any fraud on the Company by its officers or employees noticed or
reported during the year nor have we been informed of such case by
management.
(xi) According to the information and explanations given to us, the
managerial remuneration has been paid or provided in accordance with
the approvals mandated by the provisions of Section 197 read with
Schedule V to the Act.
(xii) According to the information and explanations given to us, the
Company is not a Nidhi company. Accordingly, the Paragraph 3(xii) of
the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us, all
transactions with the related parties are in compliance with Sections
177 and 188 of the Act, where applicable and the relevant details have
been disclosed in the financial statements etc., as required by the
applicable accounting standards.
(xiv) According to the information and explanations given to us, the
Company has not made any preferential allotment or private placement of
shares or fully or partly convertible debentures during the year.
Accordingly, the Paragraph 3(xiv) of the Order is not applicable to the
Company.
(xv) According to the information and explanations given to us, the
Company has not entered into any non-cash transactions with directors
or persons connected with him during the year. Accordingly, the
Paragraph 3(xv) of the Order is 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.
SHARP & TANNAN CHARTERED ACCOUNTANTS
Firm''s Registration No.109982W by the hand of
Milind P. Phadke PARTNER
Mumbai, 27th May, 2016 Membership No. 033013
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Crompton Greaves Limited (the ''Company''), which comprise the Balance
Sheet as at 31st March, 2016, the Statement of Profit and Loss. the
Statement of Changes in Equity and the Cash Flows Statement for the
year then ended, and a summary of the significant accounting policies
and other explanatory information.
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 Companies Act, 2013 (the ''Act'') with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. 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 financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and Rules made there
under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. 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. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that gives a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and reasonableness of
the accounting estimates made by the Company''s Directors as well as
evaluating the overall presentation of the financial statements.
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.
Opinion
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 Act, in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31 st March, 2016, and its loss, changes in equity and its cash
flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (the
''Order'') issued by the Central Government of India in terms of Section
143(11) of the Act, we give in the Annexure ''A, a Statement on the
matters specified in paragraphs 3 and 4 of the Order, to the extent
applicable.
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
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. the Statement
of Changes in Equity and the Cash Flow Statement dealt with by this
report are in agreement with the books of account;
(d) in our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards 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 31st March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2016
from being appointed as a director in terms of Section 164(2) of the
Act; and
(f) with respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in Annexure ''B'';
(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:
(1) the Company has disclosed the impact of pending litigations on its
financial position in its financial statements (Refer Note 39 to the
Financial Statements):
(2) the Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses; and
(3) there has been no delay in transferring amounts, required to be
transferred, to Investor Education and Protection Fund by the Company.
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, these fixed assets have been physically
verified by the management in accordance with a phased programme of
verification, which in our opinion is reasonable. considering the size
of the Company and nature of its assets. The frequency of physical
verification is reasonable and no material discrepancies were noticed
on such verification.
(c) According to the information and explanations given to us, the
title deeds of immovable properties are held in the name of the
Company.
(ii) As explained to us, inventories have been physically verified by
the management during the year. In our opinion, the frequency of such
verification is reasonable. The discrepancies noticed on such
verification, which were not material, have been properly dealt with in
the books of account.
(iii) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to firms,
limited liability partnerships or other parties covered in the register
maintained under Section 189 of the Act. The Company has granted
unsecured loans to companies covered in the register maintained under
Section 189 of the Act:
(a) the terms and conditions are not prejudicial to the Company''s
interest;
(b) the receipts of principle amounts and interest have been regular /
as per stipulations; and
(c) there are no overdue amounts for more than ninety days.
(iv) According to the information and explanations given to us, the
Company has complied with the provisions of Sections 185 and 186 of the
Act in respect of loans, investments, guarantees and security.
(v) According to the information and explanations given to us and the
records examined by us, the Company has not accepted any deposits from
the public during the year. Accordingly, the Paragraph 3(v) of the
Order is not applicable to the Company.
(vi) We have broadly reviewed the books of account and records
maintained by the Company specified by the Central Government for the
maintenance of cost records under Section 148(1) of the Act with
respect to its manufacturing activities and are of the opinion that
prima facie, the prescribed accounts and records have been made and
maintained. The contents of these accounts and records have not been
examined by us.
(vii) (a) According to the information and explanations given to us,
the Company is generally regular in depositing undisputed statutory
dues including provident fund, employees'' state insurance, income tax,
sales tax, service tax, duty of customs, duty of excise, value added
tax, cess and any other statutory dues, where applicable, to the
appropriate authorities. According to the information and explanations
given to us, there are no arrears of outstanding statutory dues as at
the last day of the financial year for a period of more than six months
from the date they became payable.
(b) According to the information and explanations given to us and the
records examined by us, the particulars of income tax, sales tax,
service tax, duty of customs, duty of excise, and value added tax as at
31st March, 2016 which have not been deposited on account of a dispute
pending, are as under:
Name of the staute Nature of Amount Period to Forum where
the dispu Rs,core which the disputtes are
ted dues amount pending
relates
The Income
Tax Act, Tax,
interest 18.94 2010-11 Commissionerate
1961 and
penalty 2012-13 (Appeals)
The Central Sales Tax,
interest 1.11 1989-90 High Court
Tax Act, 1956,
Local and
penalty 1999-00
Sales Tax
Acts and 1991-92
Works Contract
Tax 1996-97
Act
26.54 1992-93 Tribunal /
1994-95 CESTAT
2000-01
to 2010-11
2014-15
94.65 1999-00 Commissionerate
1997-98 (Appeals)
1998-99
2001-02 to
2014-15
The Central
Excise Duty,
service 0.21 1986-87 High Court
Act, 1944, the tax,
interest to 1988-89
Customs Act, 1962 and
penalty 2001-02
and Service Tax 2002-03
under the
Finance 2004-05
Act, 1994 to 2007-08
11.09 1991-92 CESTAT /
1998-99
to Tribunal
2013-14
13.44 2002-03
to Commissionerate
2015-16 (Appeals)
(*net of pre-deposit paid in getting the stay / appeal admitted)
(viii) According to the information and explanations given to us and as
per the records of the Company examined by us, the Company has not
defaulted in repayment of loans or borrowings to financial institutions
and banks. The Company has not taken any loans or borrowings from
Government. The Company has not issued any debentures. Accordingly, the
Paragraph 3(viii) of the Order is not applicable to the Company.
(ix) According to the information and explanations given to us, the
Company has not raised monies by way of initial public offer or further
public offer (including debt instruments). In our opinion and according
to the explanations given to us, on an overall basis, the term loans
were applied for the purposes for which those were raised.
(x) During the course of our examination of the books and records of
the Company carried out in accordance with generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any fraud by the Company or
any fraud on the Company by its officers or employees noticed or
reported during the year nor have we been informed of such case by
management.
(xi) According to the information and explanations given to us, the
managerial remuneration has been paid or provided in accordance with
the approvals mandated by the provisions of Section 197 read with
Schedule V to the Act.
(xii) According to the information and explanations given to us, the
Company is not a Nidhi company. Accordingly, the Paragraph 3(xii) of
the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us, all
transactions with the related parties are in compliance with Sections
177 and 188 of the Act, where applicable and the relevant details have
been disclosed in the financial statements etc., as required by the
applicable accounting standards.
(xiv) According to the information and explanations given to us, the
Company has not made any preferential allotment or private placement of
shares or fully or partly convertible debentures during the year.
Accordingly, the Paragraph 3(xiv) of the Order is not applicable to the
Company.
(xv) According to the information and explanations given to us, the
Company has not entered into any non-cash transactions with directors
or persons connected with him during the year. Accordingly, the
Paragraph 3(xv) of the Order is 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.
SHARP & TANNAN CHARTERED ACCOUNTANTS
Firm''s Registration No.109982W by the hand of
Milind P. Phadke PARTNER
Mumbai, 27th May, 2016 Membership No. 033013
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Crompton
Greaves Limited (the ''Company'') which comprise the Balance Sheet as at
31 st March, 2013, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting standards referred to in Section 211(3C) of the
Companies Act, 1956. This responsibility includes the design,
implementation and maintenance of internal control 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.
/ Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. 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. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 st March, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in case of the Cash Flow Statement, of the cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 and as
amended by the Companies (Auditor''s Report) (Amendment) Order, 2004
(together the ''Order'') issued by the Central Government of India in
terms of Section 227 (4A) of the Companies Act, 1956, we give in the
Annexure, a statement on the matters specified in Paragraphs 4 and 5 of
the Order.
2. As required by Section 227(3) of the Companies Act, 1956, we report
that:
(a) we have obtained all 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 appears from our examination of
those books;
(c) the Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the accounting standards
referred to in Section 211 (3C) of the Companies Act, 1956; and
(e) on the basis of the written representations received from directors
of the Company as on 31st March, 2013, and taken on record by the Board
of Directors, we report that none of the directors is disqualified as
on 31st March, 2013, from being appointed as a director in terms of
Section 274 (1)(g) of the Companies Act, 1956.
(i) (a) The Company is maintaining proper records to show full
particulars, including quantitative details and situation of all fixed
assets.
(b) As explained to us, these fixed assets have been physically
verified by the management, in accordance with a phased programme of
verification, which in our opinion, is reasonable, considering the size
of the Company and nature of its assets. The frequency of physical
verification is reasonable and no material discrepancies were noticed
on such verification.
(c) The Company has not disposed of any substantial part of its fixed
assets during the year, so as to affect its going concern status.
(ii) (a) As explained to us, the inventories have been physically
verified by the management during the year. In our opinion, the
frequency of such verification is reasonable.
(b) As per the information given to us, the procedures of physical
verification of inventory followed by the management are, in our
opinion, reasonable and adequate in relation to the size of the Company
and the nature of its business.,
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records, which were not material, have been properly dealt
with in the books of account.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured, to
companies, firms and other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, Paragraphs
4(iii) (b), (c) and (d) of the Companies (Auditor''s Report) Order, 2003
are not applicable to the Company.
(b) According to the information and explanations given to us, the
Company has not taken any loans, secured or unsecured, from companies,
firms and other parties covered in the register maintained under
Section 301 of the Companies Act, 1956. Accordingly, Paragraphs 4(iii)
(f) and (g) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the Company.
(iv) In our opinion, and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of audit, we have neither come across nor
have been informed of any continuing failure to correct major
weaknesses in the aforesaid internal control system.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
that need to be entered in the register maintained under Section 301 of
the Companies Act, 1956, have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year, have been made at prices which
are reasonable having regard to the prevailing market prices at the
relevant time.
(vi) The Company has accepted deposits from the public and in our
opinion and according to the information and explanations given to us,
the directives issued by the Reserve Bank of India and the provisions
of Sections 58A, 58AA and other relevant provisions of the Companies
Act, 1956 and the rules framed thereunder, where applicable, have been
complied with. We are informed that no order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account and records
maintained by the Company pursuant to the rules prescribed by the
Central Government for the maintenance of cost records under Section
209 (1) (d) of the Companies Act, 1956 and are of the opinion that
prima facie the prescribed accounts and records have been made and
maintained. The contents of these accounts and records have not been
examined by us.
(ix) (a) According to the information and explanations given to us, in
our opinion, the Company has been regular in depositing undisputed
statutory dues including provident fund, investor education and
protection fund, employees state insurance, income-tax, sales tax,
wealth tax, service tax, custom duty, excise duty, cess and other
statutory dues, as applicable, with the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts were in arrears as at 31st March, 2013, for a period
of more than six months from the date they become payable.
(x) The Company has no accumulated losses as at 31 st March, 2013 and
it has not incurred any cash losses in the financial year ended on that
date and in the immediately preceding financial year.
(xi) According to the information and explanations given to us, in our
opinion the Company has not defaulted in the repayment of dues to any
financial institutions or bank as at the balance sheet date. The
Company has not issued any debentures.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund / societies are not applicable to the
Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in securities.
The Company has invested surplus fund in mutual funds. According to
the information and explanations given to us, proper records have been
made of the transactions and contracts and timely entries have been
made therein. The investments in. mutual funds have been held by the
Company in its own name.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of guarantee given by the Company
for loans taken by others from banks or financial institutions are not
prima facie prejudicial to the interests of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(xvii) According to the information and explanations given to us and on
overall examination of the balance sheet of the Company, we report that
no funds raised on short-term basis have been used for long-term
investments.
(xviii)The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under Section
301 of the Companies Act, 1956, during the year.
(xix) The Company has not issued any debentures during the year.
Hence, reporting on Paragraph 4 (xix) of the Companies (Auditor''s
Report) Order, 2003 pertaining to creation of security or charge for
debentures does not arise.
(xx) The Company has not raised any money by public issues during the
year. Accordingly, Paragraph 4 (xx) of the Companies (Auditor''s Report)
Order, 2003 is not applicable to the Company.
(xxi) During the course of our examination of books and records of the
Company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instances of material
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
CHARTERED ACCOUNTANTS
Registration No. 109982W
Place: Mumbai PARTNER
Date: 24th May, 013 Membership No. 16368
Mar 31, 2012
We have audited the attached Balance Sheet of Crompton Greaves Limited
(the 'Company') as at 31st March, 2012, the Statement of Profit and Loss
and also the Cash Flow Statement for the year ended on that date,
annexed thereto. These Financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these Financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the Financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the Financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall Financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
In accordance with provisions of Section 227 of the Companies Act 1956,
we report that:
1. As required by the Companies (Auditor's Report) Order, 2003 as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
issued by the Central Government of India in terms of Section 227 (4A)
of the Companies Act, 1956, we enclose in the Annexure, a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to above, we
report that:
(a) we have 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 appears from our examination of
those books;
(c) the Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in Section 211 (3C) of the Companies
Act, 1956; and
(e) on the basis of the written representations received from directors
of the Company as on 31st March, 2012 and taken on record by the Board
of Directors, we report that none of the directors is disqualified as on
31st March, 2012 from being appointed as a director in terms of Section
274 (1)(g) of the Companies Act, 1956.
In our opinion and to the best of our information and according to the
explanations given to us, the said Financial Statements, read together
with the significant Accounting Policies in Note 1 and the Notes on the
Financial Statements in Note 2 to 49, give the information required by
the Companies Act, 1956, in the manner so required and give a true and
fair view in conformity with the accounting principles generally
accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(iii) in case of the Cash Flow Statement, of the cash flows for the year
ended on that date.
Annexure to the Auditors' report (referred to in paragraph 1 of our
report of even date)
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of all fixed
assets.
(b) As explained to us, these fixed assets have been physically verified
by the management, in accordance with a Phased programme of
verification, which in our opinion, is reasonable, considering the size
of the Company and nature of its assets. The frequency of physical
verification is reasonable and no material discrepancies were noticed on
such verification.
(c) The Company has not disposed off any substantial part of its fixed
assets during the year, so as to affect its going concern status.
(ii) (a) As explained to us, the inventories have been physically
verified by the management during the year. In our opinion, the
frequency of such verification is reasonable.
(b) As per the information given to us, the procedures of physical
verification of inventory followed by the management are, in our
opinion, reasonable and adequate in relation to the size of the Company
and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records, which were not material, have been properly dealt
with in the books of account.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured, to
companies, firms and other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, paragraphs
4 (iii)(b), (c) and (d) of the Companies (Auditor's Report) Order, 2003
are not applicable to the Company.
(b) According to the information and explanations given to us, the
Company has not taken any loans, secured or unsecured, from companies,
firms and other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Accordingly, paragraphs 4 (iii)(f) and
(g) of the Companies (Auditor's Report) Order, 2003 are not applicable
to the Company.
(iv) In our opinion, and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of audit, we have neither come across nor
have been informed of any continuing failure to correct major
weaknesses in the aforesaid internal control system.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
that need to be entered in the register maintained under Section 301 of
the Companies Act, 1956, have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year, have been made at prices which
are reasonable having regard to the prevailing market prices at the
relevant time.
(vi) The Company has accepted deposits from the public and in our
opinion and according to the information and explanations given to us,
the directives issued by the Reserve Bank of India and the provisions
of Sections 58A, 58AA and other relevant provisions of the Companies
Act, 1956 and the rules framed there under, where applicable, have been
complied with. We are informed that no order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account and records
maintained by the Company pursuant to the rules prescribed by the
Central Government for the maintenance of cost records under Section
209 (1) (d) of the Companies Act, 1956, in respect of electric fans,
motors, power driven pumps, transformers and electric lamps and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained. The contents of these accounts and records
have not been examined by us.
(ix) (a) According to the information and explanations given to us, in
our opinion, the Company has been regular in depositing undisputed
statutory dues including provident fund, investor education and
protection fund, employees state insurance, income-tax, Sales tax,
wealth tax, service tax, custom duty, excise duty, cess and other
statutory dues, as applicable, with the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts were in arrears as at 31st March, 2012, for a period
of more than six months from the date they become payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of income tax,
Sales tax, service tax, excise duty and cess as at 31st March, 2012,
which have not been deposited on account of a dispute, are as under the
table overleaf.
Period to
Nature of Forum where
Amount which
Name of the
Statute the disputed disputes are
Rs.crore* the amount
dues pending
relates
The Income
Tax Act, Tax and 0.38 1998-99 High Court
1961 Interest 1999-2000
2.28 2008-09 Comissioner
(appeals)
The Central
Sales Tax, Interest 7.13 1989-90 High Court
Tax act, 1956,
Local and penalty 1991-92
Sales tax acts
and 1996-97
Works contract 1997-98
Tax Act 1999-2000
2005-06 to
2008-09
11.20 1992-93 Tribunal
1996-97
1997-98
1998-99
2000-01 to
2008-09
17.87 1994-95 Commissione
-rate
1998-99 to (Appeals)
2008-09
The Central
Excise Duty, Service 0.41 2001-02 High Court
Act, 1944 and tax and 2002-03
Service tax
under penalty 2004-05 to
the Finance
Act, 2007-08
1994 9.72 1990-91 CESTAT /
1999-2000 to tribunal
2001-02
2003-04 to
2010-11
5.13 2001-02 to Commissionerate
2009-10 (appeals)
2011-12
(* Net of pre-deposit paid in getting the stay / appeal admitted)
(x) The Company has no accumulated losses as at 31st March, 2012 and it
has not incurred any cash losses in the Financial year ended on that
date and in the immediately preceding Financial year.
(xi) According to the information and explanations given to us, in our
opinion the Company has not defaulted in the repayment of dues to any
Financial institutions or bank as at the balance sheet date. The
Company has not issued any debentures.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund / society are not applicable to the
Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in securities.
The Company has invested surplus funds in mutual funds. According to
the information and explanations given to us, proper records have been
maintained of the transactions and contracts and timely entries have
been made therein. The investments in mutual funds have been held by
the Company in its own name.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of guarantee given by the Company
for loans taken by others from bank or Financial institutions are not
prima facie prejudicial to the interests of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, the term-loans have been applied for the purposes for
which they were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investments.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
Section 301 of the Companies Act, 1956, during the year.
(xix) The Company has not issued any debentures during the year.
Hence, reporting on paragraph 4 (xix) of the Companies (Auditor's
Report) Order, 2003 pertaining to creation of security or charge for
debentures does not arise.
(xx) The Company has not raised any money by public issues during the
year. Accordingly, paragraph 4 (xx) of the Companies (Auditor's Report)
Order, 2003 is not applicable to the Company.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instances of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of such case by the management.
For Sharp & Tannan
Chartered Accountants
Registration no. 109982W
L. Vaidyanathan
Partner
Mumbai, 25th May, 2012 Membership no. 16368
Mar 31, 2011
We have audited the attached Balance Sheet of Crompton Greaves Limited
as at 31st March, 2011, the Profit and Loss Account and also the Cash
Flow Statement for the year ended on that date, annexed thereto. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
In accordance with provisions of Section 227 of the Companies Act 1956,
we report that:
1. As required by the Companies (Auditors Report) Order, 2003 and as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
issued by the Central Government of India in terms of Section 227 (4A)
of the Companies Act, 1956, we enclose in the Annexure, a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to above, we
report that:
(a) we have obtained all 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 appears from our examination of
those books;
(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in Section 211 (3C) of the Companies
Act, 1956; and
(e) on the basis of the written representations received from directors
of the Company as on 31st March, 2011, and taken on record by the Board
of Directors, we report that none of the directors is disqualified as
on 31st March, 2011, from being appointed as a director in terms of
Section 274 (1) (g) of the Companies Act, 1956.
In our opinion, and to the best of our information and according to the
explanations given to us, the said accounts, read together with the
Significant Accounting Policies in Schedule A and the Notes on the
Balance Sheet and Profit and Loss Account in Schedule B, give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT (REFERRED TO IN PARAGRAPH 1 OF OUR
REPORT OF EVEN DATE)
(i) (a) The Company is maintaining proper records to show full
particulars, including quantitative details and situation of all fixed
assets.
(b) As explained to us, these fixed assets have been physically
verified by the management, in accordance with a phased programme of
verification, which in our opinion, is reasonable, considering the size
of the Company and nature of its assets. The frequency of physical
verification is reasonable and no material discrepancies were noticed
on such verification.
(c) The Company has not disposed off any substantial part of its fixed
assets during the year, so as to affect its going concern status.
(ii) (a) As explained to us, the inventories have been physically
verified by the management during the year. In our opinion, the
frequency of such verification is reasonable.
(b) As per the information given to us, the procedures of physical
verification of inventory followed by the management are, in our
opinion, reasonable and adequate in relation to the size of the Company
and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records, which were not material, have been properly dealt
with in the books of account.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured, to
companies, firms and other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, paragraphs
4(iii)(b), (c) and (d) of the Companies (Auditors Report) Order, 2003
are not applicable to the Company.
(b) According to the information and explanations given to us, the
Company has not taken any loans, secured or unsecured, from companies,
firms and other parties covered in the register maintained under
Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii)
(f) and (g) of the Companies (Auditors Report) Order, 2003 are not
applicable to the Company.
(iv) In our opinion, and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of audit, we have neither come across nor
have been informed of any continuing failure to correct major
weaknesses in the aforesaid internal control system.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
that need to be entered in the register maintained under Section 301 of
the Companies Act, 1956, have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year, have been made at prices which
are reasonable having regard to the prevailing market prices at the
relevant time.
(vi) The Company has accepted deposits from the public and in our
opinion and according to the information and explanations given to us,
the directives issued by the Reserve Bank of India and the provisions
of Sections 58A, 58AA and other relevant provisions of the Companies
Act, 1956 and the rules framed thereunder, where applicable, have been
complied with. We are informed that no order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account and records
maintained by the Company pursuant to the rules prescribed by the
Central Government for the maintenance of cost records under Section
209 (1) (d) of the Companies Act, 1956, in respect of electric fans,
motors, power driven pumps, transformers and electric lamps and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained. The contents of these accounts and records
have not been examined by us.
(ix) (a) According to the information and explanations given to us, in
our opinion, the Company has been regular in depositing undisputed
statutory dues including provident fund, investor education and
protection fund, employees state insurance, income-tax, sales tax,
wealth tax, service tax, custom duty, excise duty, cess and other
statutory dues, as applicable, with the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts were in arrears as at 31st March, 2011, for a period
of more than six months from the date they become payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of income tax,
sales tax, service tax, excise duty and cess as at 31st March, 2011,
which have not been deposited on account of a dispute, are as under:
Name Nature Amount Period to Forum where
of the of the " crore* which the disputes are
Statute disputed amount pending
dues relates
The Tax and 1997-98 to
8.47 ITAT
Income Tax interest 2005-06
Act, 1961
The Central Tax, 1996-97
Sales Tax interest 1999-2000
Act, 1956, and 5.98 2005-06 to High Court
Local Sales penalty 2008-09
Tax Acts
and Works 1991-92
Contract 1992-93
Tax Act 7 40 1994-95 Tribunal
1996-97
1997-98 to
2004-05
1996-97 to
19.92 2008-09 Commissionerate
1998-99
0.73 Assessing Officer
2006-07
The Central Duty, 2001-02
Excise Act, service 0.42 2002-03 High Court
1944 and tax and 2004-05 to
Service tax penalty 2007-08
under the
Finance 1975-76 to
Act, 1994 1981-82
9.45 1991-92 CESTAT
1999-2000
to 2001-02
2003-04 to
2008-09
2001-02
1.63 2004-05 to Commissionerate
2009-10
* Net of pre-deposit paid in getting the stay / appeal admitted
(x) The Company has no accumulated losses as at 31st March, 2011 and it
has not incurred any cash losses in the financial year ended on that
date and in the immediately preceding financial year.
(xi) According to the information and explanations given to us, in our
opinion the Company has not defaulted in the repayment of dues to any
financial institutions or bank as at the balance sheet date. The
Company has not issued any debentures.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund / society are not applicable to the
Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in securities.
The Company has invested surplus fund in mutual funds. According to the
information and explanations given to us, proper records have been made
of the transactions and contracts and timely entries have been made
therein. The investments in mutual funds have been held by the Company
in its own name.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of guarantee given by the Company
for loans taken by others from banks or financial institutions are not
prima facie prejudicial to the interests of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(xvii) According to the information and explanations given to us and on
overall examination of the balance sheet of the Company, we report that
no funds raised on short-term basis have been used for long-term
investments.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
Section 301 of the Companies Act, 1956, during the year.
(xix) The Company has not issued any debentures during the year. Hence,
reporting on paragraph 4 (xix) of the Companies (Auditors Report)
Order, 2003 pertaining to creation of security or charge for debentures
does not arise.
(xx) The Company has not raised any money by public issues during the
year. Accordingly, paragraph 4 (xx) of the Companies (Auditors Report)
Order, 2003 is not applicable to the Company.
(xxi) During the course of our examination of books and records of the
Company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instances of material
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
For SHARP & TANNAN
CHARTERED ACCOUNTANTS
Registration No.109982W
L. VAIDYANATHAN
PARTNER
Mumbai, 28th April, 2011 Membership No.16368
Mar 31, 2010
We have audited the attached Balance Sheet of Crompton Greaves Limited
as at 31st March, 2010, the Profit and Loss Account and also the Cash
Flow Statement for the year ended on that date, annexed thereto. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
In accordance with provisions of Section 227 of the Companies Act,
1956, we report that:
1. As required by the Companies (Auditors Report) Order, 2003 and as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
issued by the Central Government of India in terms of Section 227 (4A)
of the Companies Act, 1956, we enclose in the Annexure, a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to above, we
report that:
(a) we have obtained all 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 appears from our examination of
those books;
(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in Section 211 (3C) of the Companies
Act, 1956; and
(e) on the basis of the written representations received from directors
of the Company as on 31st March, 2010, and taken on record by the Board
of Directors, we report that none of the directors is disqualified as
on 31st March, 2010, from being appointed as a director in terms of
Section 274 (1)(g) of the Companies Act, 1956.
In our opinion, and to the best of our information and according to the
explanations given to us, the said accounts, read together with the
Significant Accounting Policies in Schedule A and the Notes on the
Balance Sheet and Profit and Loss Account in Schedule B, give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT(referrepto in paragraph 1 of our
report of even date)
(i) (a) The Company is maintaining proper records to show full
particulars, including quantitative details and situation of all fixed
assets.
(b) As explained to us, these fixed assets have been physically
verified by the management, in accordance with a phased programme of
verification, which in our opinion, is reasonable, considering the size
of the Company and nature of its assets. The frequency of physical
verification is reasonable and no material discrepancies were noticed
on such verification.
(c) The Company has not disposed off any substantial part of its fixed
assets during the year, so as to affect its going concern status.
(ii) (a) As explained to us, the inventories have been physically
verified by the management during the year. In our opinion, the
frequency of such verification is reasonable.
(b) As per the information given to us, the procedures of physical
verification of inventory followed by the management are, in our
opinion, reasonable and adequate in relation to the size of the Company
and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records, which were not material, have been properly dealt
with in the books of account.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured, to
companies, firms and other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, paragraphs
4(iii)(b), (c) and (d) of the Companies (Auditors Report) Order, 2003
are not applicable to the Company.
(b) According to the information and explanations given to us, the
Company has not taken any loans, secured or unsecured, from companies,
firms and other parties covered in the register maintained under
Section 301 of the Companies Act, 1956. Accordingly, paragraphs
4(iii)(f) and (g) of the Companies (Auditors Report) Order, 2003 are
not applicable to the Company.
(iv) In our opinion, and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of audit, we have neither come across nor
have been informed of any continuing failure to correct major
weaknesses in the aforesaid internal control system.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
that need to be entered in the register maintained under Section 301 of
the Companies Act, 1956, have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year, have been made at prices which
are reasonable having regard to the prevailing market prices at the
relevant time.
(vi) The Company has accepted deposits from the public and in our
opinion and according to the information and explanations given to us,
the directives issued by the Reserve Bank of India and the provisions
of Sections 58A, 58AA and other relevant provisions of the Companies
Act, 1956 and the rules framed thereunder, where applicable, have been
complied with. We are informed that no order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account and records
maintained by the Company pursuant to the rules prescribed by the
Central Government for the maintenance of cost records under Section
209 (1) (d) of the Companies Act, 1956, in respect of electric fans,
motors, power driven pumps, transformers and electric lamps and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained. The contents of these accounts and records
have not been examined by us.
(ix) (a) According to the information and explanations given to us, in
our opinion, the Company has been regular in depositing undisputed
statutory dues including provident fund, investor education and
protection fund, employees state insurance, income-tax, sales tax,
wealth tax, service tax, custom duty, excise duty, cess and other
statutory dues, as applicable, with the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts were in arrears as at 31st March, 2010, for a period
of more than six months from the date they become payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of income-tax,
sales tax, service tax, excise duty and cess as at 31st March, 2010,
which have not been deposited on account of a dispute, are as under:
Name of Nature Amount Period to Forum where
the Statute of the Rs. which the disputes are
disputed crore* amount pending
dues relates
The Income Tax and 4.31 1997-98 to ITAT
Tax Act, 1961 interest 2004-05
The Central Tax, 1996-97
Sales Tax interest 1999-2000
Act, 1956, and 1.91 2005-06to High Court
Local Sales penalty 2008-09
Tax Acts
1994-95
and Works
1995-96
Contract Tax 7.85 1997-98to Tribunal
Act
2004-05
1996-97 to
20.00 Commtssionerate
1998-99
0.80 2006-07 Assessing Officer
The Central Duty, 2001 -02
Excise Act, service 0.09 2002-03 High Court
1944 and tax and 2005-06
Service tax penalty
1975-76 to
under the 1981-82
2004-05
2006-07
2007-08
2004-05 to
0.95 2007-08 Commissionerate
2009-10
* Net of pre-deposit paid in getting the stay / appeal admitted
(x) The Company has no accumulated losses as at 31 st March, 2010 and
it has not incurred any cash losses in the financial year ended on that
date and in the immediately preceding financial year.
(xi) According to the information and explanations given to us, in our
opinion the Company has not defaulted in the repayment of dues to any
financial institutions or bank as at the balance sheet date. The
Company has not issued any debentures.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund / society are not applicable to the
Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in securities.
The Company has invested surplus fund in mutual funds. According to
the information and explanations given to us, proper records have been
made of the transactions and contracts and timely entries have been
made therein. The investments in mutual funds have been held by the
Company in its own name.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of guarantee given by the Company
for loans taken by others from banks or financial institutions are not
prima facie prejudicial to the interests of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(xvii) According to the information and explanations given to us and on
overall examination of the Balance Sheet of the Company, we report that
no funds raised on short-term basis have been used for long-term
investments.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
Section 301 of the Companies Act, 1956, during the year.
(xix) The Company has not issued any debentures during the year.
Hence, reporting on paragraph 4 (xix) of the Companies (Auditors
Report) Order, 2003 pertaining to creation of security or charge for
debentures does not arise.
(xx) The Company has not raised any money by public issues during the
year. Accordingly, paragraph 4 (xx) of the Companies (Auditors Report)
Order, 2003 is not applicable to the Company.
(xxi) During the course of our examination of books and records of the
Company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instances of material
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
For SHARP & TANNAN
CHARTERED ACCOUNTANTS
Registration No.109982W
L. VAIDYANATHAN
PARTNER
Mumbai, 13th May, 2010 Membership No. 16368