Auditor Report of Sanghi Industries Ltd.
Mar 31, 2018
Report on the Indian Accounting Standards (Ind AS) Financial Statements
We have audited the accompanying Ind AS financial statements of Sanghi Industries Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2018, 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.
Managementâs Responsibility for the Ind AS Financial Statements
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 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 in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act.
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 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
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act and Rules made thereunder including 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.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the 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 Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the 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 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 Directors, as well as evaluating the overall presentation of the 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 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 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 profit, total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the 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 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ 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 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 Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st March, 2018, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 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 Aâ; 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:
i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements - Refer Note 32 to the Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. The Company does not have any liability which is required to be transferred to Investor Education and Protection Fund.
ANNEXURE âAâ TO THE INDEPENDENT AUDITORâS REPORT
(Referred to in paragraph 2 (f) under âReport on Other Legal and Regulatory Requirementsâ of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Sanghi Industries Limited (âthe Companyâ) as of 31st March, 2018 in conjunction with our audit of the 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. 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 Act.
Auditorâs 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 on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to on audit of internal financial control, 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 judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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 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
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, 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 on Audit of Internal Financial Controls Over Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
ANNEXURE âBâ TO THE INDEPENDENT AUDITORâS REPORT
(Referred to in paragraph 1 under the heading of âReport on other legal and regulatory requirementsâ of our report of even date)
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, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.
c) As per the information and explanations provided to us, title deeds of immovable properties are held in the name of the Company.
ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. As informed, no material discrepancies were noticed on physical verification carried out during the year.
iii) The Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Consequently, the requirement of reporting under clause (iii) (a) to clause (iii) (c) of Paragraph 3 of the Order is not applicable to the Company.
iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities. The Company has not granted any loans to any director or any person in whom director is interested as specified under Section 185 of the Companies Act, 2013 and hence reporting under clause (iv) of Paragraph 3 of the Order is not applicable to the Company to that extent.
v) According to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Therefore, the reporting under clause (v) of Paragraph 3 of the Order is not applicable to the Company.
vi) We have broadly reviewed the books of accounts maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (I) of Section 148 of the Act and the rules framed there under and we are of opinion that prima facie, the prescribed amounts and records have been made and maintained. We have not, however, made detailed examination of the records with the view to determine whether they are accurate or complete.
vii) In respect of Statutory dues :
a) According to the records of the Company, undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess, Goods and Service Tax with effect from July 1, 2017 and other material statutory dues have been generally regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues, were outstanding as at 31st March, 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, there are no dues of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Value Added Tax, on account of any dispute, which have not been deposited except other than disclosed hereunder:
|
Name of Statue |
Nature of Dues |
Amount (in Crore) |
Period to which amount relates |
Forum where dispute is pending |
|
Central Excise Act, 1944 |
Excise Duty |
40.00 |
Various years |
Customs, Excise & service tax Appellate Tribunal |
|
Service Tax The Finance Act, 1994 |
CENVAT Credit |
32.67 |
Various years |
Customs, Excise & service tax Appellate Tribunal |
|
Custom Act, 1962 |
Custom Duty |
12.41 |
2005-10 |
Customs, Excise & service tax Appellate Tribunal |
|
Sales Tax |
Sales Tax |
1.76 |
Various years |
Joint Commissioner Appeal, Rajkot |
|
Gujarat Electricity Duty Act, 1968 |
Electricity duty on power generation |
3.30 |
Various years |
Gujarat High Court |
|
Bombay Land Revenue Code, 1879 |
Land Revenue on Leasehold Land |
1.17 |
Various years |
Gujarat High Court |
viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to financial institution, banks, governments or dues to the debenture holders.
ix) In our opinion, and according to the information and explanations given to us, the money raised by way of term loans have been applied for the purpose for which they were obtained. The company has not raised any money by way of initial public offer or further public offer including debt instruments during the year.
x) In our opinion and according to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.
xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of Paragraph 3 of the Order is not applicable.
xiii) In our opinion and according to the information and explanations given to us the Companyâs transactions with its related party are in compliance with Sections 177 and 188 of the Companies Act, 2013, where applicable, and details of related party transactions have been disclosed in the Ind AS financial statements etc. as required by the applicable accounting standards.
xiv) The Company has not made any preferential allotment of shares or fully or partly converted debentures during the year. However, the Company has raised through Qualified Institutions Placement (âQIPâ) by allotting 31,021,000 Equity Shares at a price of â129 per share. The QIP placement is in compliance with Section 42 of the Companies Act, 2013. Further the Company has disclosed the end use of money received from QIP in Note 10 D) of notes to the Ind AS financial statements.
xv) In our opinion and according to the information and explanations given to us, during the year, the Company has not entered into any non-cash transaction with its directors or persons connected with him and hence, reporting under clause (xv) of Paragraph 3 of the Order is not applicable to the Company.
xvi) In our opinion and 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.
For Chaturvedi & Shah, For S.K Mehta & Co,
Chartered Accountants Chartered Accountants
Firmâs Registration No: 101720W Firmâs Registration No: 000478N
Vitesh D. Gandhi S. K. Mehta
Partner Partner
Membership Number: 110248 Membership Number: 010870
Place of Signature: Ahmedabad Place of Signature: Ahmedabad
Date: May 19, 2018 Date: May 19, 2018
Mar 31, 2017
To the Members of Sanghi Industries Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Sanghi Industries Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
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 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 relevant rules there under. 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 and ensuring their operating effectiveness and 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on these 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 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 disclosures in the financial statements. The procedures selected depend on the auditorsâ 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 financial control relevant to the Companyâs preparation of the 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 accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 audit opinion on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the 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, its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditorsâ Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in âAnnexure 1â, 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 purpose 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, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act read with relevant rules there under;
e. On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 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, we give our separate Report in âAnnexure 2â.
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:
(i) The Company has disclosed the impact of pending litigation on its financial position in its financial statements -Refer Note 36 on Contingent Liabilities to the financial statements;
(ii) The Company did not have any long-term contracts including derivative contracts. Hence, the question of any material foreseeable losses does not arise;
(iii) The Company does not have any liability which is required to be transferred to the Investor Education and Protection Fund.
(iv) The Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedures and relying on the management representation, 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 (Refer Note No. 43(7) to the financial statements);
[Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorâs Report of even date to the members of Sanghi Industries Limited on the financial statements for the year ended March 31, 2017]
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) During the period, fixed assets have been physically verified by the management as per the regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties recorded in the books of account of the Company are held in the name of the Company.
(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. As informed, no material discrepancies were noticed on physical verification carried out during the year.
(iii) As informed, 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 Act. Accordingly, paragraph 3
(iii)(a), 3 (iii)(b) and 3 (iii)(c) of the Order are not applicable to the Company.
(iv) Based on information and explanation given to us in respect of loans, investments, guarantees and securities, the Company has complied with the provisions of Section 185 and 186 of the Act.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act and the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (1) of Section 148 of the Act and the rules framed there under and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.
(vii) (a) The Company is regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it.
According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income tax, sales tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, were outstanding, at the year end, for a period of more than six months from the date they became payable.
(b) According to the information and explanation given to us, the dues outstanding with respect to, income tax, sales tax, service tax, value added tax, customs duty, excise duty on account of any dispute, are as follows:
|
Name of the statute |
Nature of dues |
Amount (Rs in Crore) |
Period to which the amount relates |
Forum where dispute is pending |
|
Central Excise Act,l944 |
Excise Duty |
40.00 |
Various years |
Customs, Excise & Service tax Appellate Tribunal |
|
Service Tax Act |
CENVAT Credit |
21.46 |
Various years |
Customs, Excise & Service tax Appellate Tribunal |
|
Customs Act, 1962 |
Customs Duty |
12.41 |
2005-10 |
Customs, Excise & Service tax Appellate Tribunal |
|
Sales Tax |
Sales Tax |
1.76 |
Various years |
Joint Commissioner Appeal, Rajkot |
|
Gujarat Electricity Duty Act, 1958 |
Electricity duty on power Generation |
3.30 |
Various years |
Gujarat High Court |
|
Bombay Land Revenue Code, 1879 |
Land Revenue on Leasehold Land |
1.17 |
Various years |
Gujarat High Court |
(viii)According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to financial institutions, banks, governments or dues to debenture holders.
(ix) According to the information and explanations given to us, the money raised by way of term loans have been applied by the Company for the purposes for which those are raised.
(x) 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 instance of 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 any such instance by the management.
(xi) As per the information and explanations given to us, managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Therefore, paragraph 3(xii) of the Order is not applicable to the Company.
(xiii)As per the information and explanation given to us, all transactions entered into by the Company with the related parties are in compliance with Sections 177 and 188 of Act, where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable Indian accounting standards.
(xiv)The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Therefore, paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) The Company has not entered into any non-cash transactions with directors or persons connected with him.
(xvi)Based on the information and explanation given to us the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
[Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorâs Report of even date to the members of Sanghi Industries Limited on the financial statements for the year ended March 31, 2017]
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Act")
We have audited the internal financial controls over financial reporting of Sanghi Industries Limited (âthe Companyâ) as of March 31, 2017 in conjunction with our audit of the 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 issued by the Institute of Chartered Accountants of India (âICAIâ). 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.
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 on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing specified under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, 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 judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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 March 31, 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 on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
For Ankit & Co. For Haribhakti & Co. LLP
Chartered Accountants Chartered Accountants
ICAI Firm Registration No.000l8lS ICAI Firm Registration No. I03523W/WI00048
S. Brijkumar Atul Gala
Partner Partner
Membership No.:0I9357 Membership No.: 048650
Place: Ahmedabad
Date: May 24, 2017
Mar 31, 2016
To the Members of Sanghi Industries Limited Report on the Financial Statements
We have audited the accompanying financial statements of Sanghi Industries Limited (âthe Companyâ), which comprises the Balance Sheet for nine months period ended on March 3I, 20I6, the Statement of Profit and Loss, the Cash Flow Statement for the period then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section I34(5) of the Companies Act, 20I3 (âthe Actâ) with respect to 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 principles generally accepted in India, including the Accounting Standards specified under Section I33 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 20I4. 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 and ensuring their operating effectiveness and 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on these 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 in accordance with the Standards on Auditing specified under Section I43(I0) 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 disclosures in the financial statements. The procedures selected depend on the auditorsâ 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 financial control relevant to the Companyâs preparation of the 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 accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 audit opinion on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the 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 3Ist March, 20I6, its profit and its cash flows for the period ended on that date.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditorsâ Report) Order, 20I6 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (II) of Section I43 of the Act, we give in âAnnexure Iâ, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
(2) As required by Section I43(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, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section I33 of the Act read with Rule 7 of the Companies (Accounts) Rules, 20I4;
e. On the basis of written representations received from the directors as on March 3I, 20I6, and taken on record by the Board of Directors, none of the directors is disqualified as on March 3I, 20I6 from being appointed as a director in terms of Section I64 (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, We give our separate Report in âAnnexure 2â; and
g. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule II of the Companies (Audit and Auditors) Rules, 20I4, in our opinion and to the best of our information and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Note 25 on Contingent Liabilities to the financial statements;
(ii) The Company did not have any long-term contracts including derivative contracts, for which there were any material foreseeable losses; and
(iii) There were no amounts, which were required, to be transferred to the Investor Education and Protection Fund by the Company.
[Referred to in paragraph I under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorâs Report of even date to the members of Sanghi Industries Limited on the financial statements for the period ended March 3I, 20I6
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) During the period, fixed assets have been physically verified by the management as per the regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties recorded as fixed assets, in the books of account of the Company, are held in the name of the Company.
(ii) The inventory has been physically verified by the management during the period. In our opinion, the frequency of verification is reasonable. As informed, no material discrepancies were noticed on physical verification carried out during the period.
(iii) As informed, 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 I89 of the Act. Accordingly, paragraph 3
(iii)(a), 3 (iii)(b) and 3 (iii)(c) of the Order are not applicable to the Company.
(iv) Based on information and explanation given to us in respect of loans, investments, guarantees and securities, the Company has complied with the provisions of Section I85 and I86 of the Act.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act and the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (I) of Section I48 of the Act and the rules framed there under and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.
(vii) (a) The Company is regular in depositing with appropriate authorities, undisputed statutory dues including provident
fund, employeesâ state insurance, income tax, sales tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income tax, sales tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, were outstanding, as at March 3Ist, 20I6 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, the dues outstanding with respect to, income tax, sales tax, service tax, value added tax, customs duty, excise duty on account of any dispute, are as follows:
|
Name of the statute |
Nature of dues |
Amount (Rs, in Crore) |
period to which the amount relates |
Forum where dispute is pending |
|
Central Excise Act,I944 |
Excise Duty |
62.24 |
Various years |
Customs, Excise & Service tax Appellate Tribunal |
|
Service Tax Act |
CENVAT Credit |
2I.46 |
Various years |
Customs, Excise & Service tax Appellate Tribunal |
|
Service Tax Act |
Interest and Penalty |
0.05 |
Various years |
Customs, Excise & Service tax Appellate Tribunal |
|
Customs Act, I962 |
Customs Duty |
I2.4I |
2005-I0 |
Customs, Excise & Service tax Appellate Tribunal |
|
Sales Tax |
Sales Tax |
I.76 |
Various years |
Joint Commissioner Appeal, Rajkot |
|
Gujarat Electricity Duty Act, I958 |
Electricity duty on power Generation |
3.30 |
Various years |
Gujarat High Court |
|
Bombay Land Revenue Code, I879 |
Land Revenue on Leasehold Land |
I.I7 |
Various years |
Gujarat High Court |
(viii)According to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions and banks.
(ix) The Company has neither raised money by way of public issue offer nor has obtained any term loans. Therefore, paragraph 3(ix) of the Order is not applicable to the Company.
(x) 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 instance of fraud by the Company or any fraud on the Company by its officers or employees, noticed or reported during the period, nor have we been informed of any such instance by the management.
(xi) According to the information and explanations given to us, managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of Section I97 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Therefore, paragraph 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanation given to us, all transactions entered into by the Company with the related parties are in compliance with Sections I77 and I88 of Act, where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards.
(xiv)The Company has made private placement of Non-convertible Debentures during the period under review and in our opinion and according to the information and explanations given to us, the requirement of Section 42 of the Act have been complied with and the amount raised have been used for the purposes for which the funds were raised.
(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 period.
(xvi)According to the information and explanation given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, I934.
ANNEXURE 2 TO THE INDEPENDENT AUDITORâS REPORT
[Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorâs Report of even date to the members of Sanghi Industries Limited on the financial statements for the period ended March 3I, 20I6]
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Act")
We have audited the internal financial controls over financial reporting of Sanghi Industries Limited (âthe Companyâ) as of March 3I, 20I6 in conjunction with our audit of the financial statements of the Company for the period 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 issued by the Institute of Chartered Accountants of India (âICAIâ). 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, 20I3.
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 on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing specified under section I43(I0) of the Act to the extent applicable to an audit of internal financial controls, 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 judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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 (I) 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 March 3I, 20I6, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
For Ankit & Co. For Haribhakti & Co. LLP
Chartered Accountants Chartered Accountants
ICAI Firm Registration No.000I8IS ICAI Firm Registration No.I03523W
S. Brijkumar Atul Gala
Partner Partner
Membership No. I9357 Membership No. 048650
Place: Ahmedabad Place: Mumbai
May 25, 20I6 May 25, 20I6
Jun 30, 2015
We have audited the accompanying financial statements of Sanghi
Industries Limited ("the Company"), which comprise the Balance Sheet as
at June 30, 2015, the Statement of Profit and Loss, 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
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 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
and ensuring their operating effectiveness and 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.
Auditors, Responsibility
Our responsibility is to express an opinion on these 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
thereunder.
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 disclosures in the financial statements. The procedures
selected depend on the auditors' 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 financial control relevant to the Company's
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and the 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 audit opinion on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the 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 June 30, 2015, its profit and its cash flows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditors' Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of Section 143 of the Act, we give in the Annexure, 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, and the Cash
Flow Statement dealt with by this Report are in agreement with the books
of account;
(d) I n our opinion, the aforesaid 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 written representations received from the directors
as on June 30, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on June 30, 2015 from being
appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 24 on
Contingent Liabilities to the financial statements;
(ii) The Company did not have any long-term contracts including
derivative contracts hence, the question of any material foreseeable
losses does not arise;
(iii) There were no amounts which were required to be transferred to
the Investor Education and Protection Fund by the Company.
ANNEXURE TO INDEPENDENT AUDITORS, REPORT
[Referred to in paragraph 1 under ,Report on Other Legal and Regulatory
Requirements' in the Independent Auditors' Report of even date to the
members of Sanghi Industries Limited on the financial statements for
the year ended June 30, 2015]
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, all the fixed assets have been physically
verified by the management in a phased periodical manner, which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. No material discrepancies were noticed on such
physical verification.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventory followed by
the management are 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 and no
material discrepancies were noticed on physical verification carried
out at the end of the year.
(iii) As informed, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties covered in the register
maintained under Section 189 of the Act. Accordingly, the provisions
stated in paragraph 3(iii)(a) and 3(iii)(b) of the Order are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control system of the Company.
(v) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the provisions of Sections 73 to 76 of the Act and the rules
framed thereunder.
(vi) We have broadly reviewed the books of account maintained by the
Company in respect of products where the maintenance of cost records
has been specified by the Central Government under sub-section (1) of
Section 148 of the Act and the rules framed thereunder and we are of
the opinion that prima facie, the prescribed accounts and records have
been made and maintained.
(vii) (a) Undisputed Statutory dues including provident fund, employees'
state insurance, income tax, sales tax, wealth tax, service tax, value
added tax, customs duty, excise duty and cess have generally been
deposited with the appropriate authorities, though there have been some
delays.
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees'
state insurance, income tax, sales tax, wealth tax, service tax, value
added tax, customs duty, excise duty, cess and any other material
statutory dues applicable to it, were outstanding, at the year end, for
a period of more than six months from the date they became payable.
(b) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of dispute, are as follows:
Name of the statute Nature of dues Amount Amount Depos-
(Rs.in Cr.) ited in
protest
Rs. in Cr.)
Central Excise Excise Duty 75.14 43.46
Act,1944
Service Tax Act CENVAT Credit 29.40 1.51
Service Tax Act Interest and 0.05 -
Penalty
Customs Act, 1962 Customs Duty 12.41 6.21
Sales Tax Sales Tax 1.76 1.76
Bombay Land Revenue Code, Land Revenue on 1.17 -
1879 Leasehold Land
The Income Tax Act, 1961 Tax 0.99 -
Name of the statute Period to Forum where dispute is
which the pending
amount relates
Central Excise Various years Customs, Excise & Service
Act,1944 tax Appellate Tribunal
Service Tax Act Various years =
Service Tax Act Various years Customs, Excise & Service
tax Appellate Tribunal
Customs Act, 1962 2005-10 Customs, Excise &
Service tax Appellate
Tribunal
Sales Tax Various years Joint Commissioner Appeal,
Rajkot
Bombay Land Revenue Various years Gujarat High Court
Code, 1879
The Income Tax Act, 2006-07 CIT (A)
1961
(c) According to the information and explanations given to us, there
were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company.
(viii) The Company does not have accumulated losses at the end of the
financial year nor has incurred cash losses in the current and
immediately preceding financial year.
(ix) According to the information and explanations given to us, the
Company has not defaulted in repayment of its dues to banks/financial
institutions, except for delay in some cases. The Company does not have
any dues to debenture holders.
(x) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xi) According to the information and explanations given to us, the
term loans have been applied for the purpose for which the loans were
obtained.
(xii) 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 instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of any such instance by the management.
For Ankit & Co. For Haribhakti & Co. LLp
Chartered Accountants Chartered Accountants
Firm Registration No.000181S Firm Registration No.103523W
S. Brijkumar Atul Gala
Partner Partner
Membership No. 19357 Membership No. 048650
Mumbai: August 28, 2015
Jun 30, 2014
We have audited the accompanying financial statements of Sanghi
Industries Limited ("the Company"), which comprise the Balance Sheet as
at June 30, 2014, the Statement of Profit and Loss and 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 sub- section (3C) of Section
211 of the Companies Act, 1956 ("the Act"). 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.
Auditors'' 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 auditors'' 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, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. 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 Act 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 June 30, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
I. As required by the Companies (Auditors'' Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 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 Act, 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 purpose 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, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of Section 211 of the Act;
e. on the basis of written representations received from the directors
as on June 30, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on June 30, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
ANNEXURE TO INDEPENDENT AUDITORS'' REPORT
[Referred to in paragraph I under ''Report on Other Legal and Regulatory
Requirements'' in the Independent Auditors'' Report of even date to the
members of Sanghi Industries Limited on the financial statements for
the year ended June 30, 2014]
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of
fixed assets.
(b) As explained to us, all the fixed assets have been physically
verified by the management in a phased periodical manner, which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. No material discrepancies were noticed on such
physical verification.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventory followed by
the management are 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 and no
material discrepancies were noticed on physical verification carried
out at the end of the year.
(iii) (a) As informed, the Company has not granted any loans, secured
or unsecured to companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly, the provisions stated in paragraph 4 (iii)(b),(c) and (d)
of the order are not applicable.
(b) As informed, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly, the provisions stated in paragraph 4 (iii)(f)and (g) of
the order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct weakness
in internal control system of the Company.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in section 301 of the Companies Act, 1956 that need to be
entered into the register maintained under section 301 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 exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act and the rules
framed thereunder.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (I) of Section 209 of the
Act and we are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained.
(ix) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees'' state
insurance, income-tax, sales-tax, wealth- tax, service tax, customs
duty, excise duty, cess and other material statutory dues applicable to
it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of the statute Nature of dues Amount
Rs. in Cr.
Central Excise Act,l944 Excise Demand 29.52
Customs Act, 1962 Customs Demand 12.41
Service Tax Act, 1944 Service Tax Demand 6.76
Electricity Act, 1994 Duty on Generation 3.30
from D G Set
Bombay Land Revenue Land Revenue on 1.17
Code, 1879 Leasehold Land
The Income Tax Act, 1961 Tax 0.99
Name of the statute Period to which the Forum where dispute
amount relates is pending
Central Excise Act,l944 Various years Customs, Excise &
Service tax
Appellate Tribunal
Customs Act, 1962 Customs, Excise &
Service tax
Appellate Tribunal
Service Tax Act, 1944 Various years Customs, Excise &
Service tax
Appellate Tribunal
Electricity Act, 1994 Various years Gujarat High Court
Bombay Land Revenue Various years Gujarat High Court
Code, 1879
The Income Tax Act, 1961 2006-07 CIT (A)
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
bank or financial institution as per the mutual arrangements. The
Company has not borrowed any sums through debentures.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause (xiii) of
paragraph 4 of the Companies (Auditor''s Report) Order, 2003 (as
amended) are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of paragraph 4 of the Companies (Auditor''s
Report) Order, 2003 (as amended) are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
(xvi) In our opinion, the term loans have been applied for the purpose
for which the loans were raised.
(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
investment.
(xviii) According to the information and explanation given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under Section 30l of
the Companies Act, l956.
(xix) According to the information and explanations given to us, no
debentures have been issued by the Company during the year.
(xx) The Company has not raised money by way of public issue during the
year.
(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 instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Ankit & Co. For Haribhakti & Co. LLP
Chartered Accountants Chartered Accountants
Firm Registration No.000181S Firm Registration No.103523W
S.Brijkumar Prashant M. Maharishi
Partner Partner
Membership No. 19357 Membership No. 41452
Place: Mumbai
Date: August 21, 2014
Jun 30, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Sanghi
Industries Limited ("the Company")'' which comprise the Balance Sheet as
at June 30'' 2013'' the Statement of Profit and Loss and Cash Flow
Statement for the year ended on that date and a summary of significant
accounting policies and other explanatory information.
ManagementÂs 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 sub- section (3C) of section
211 of the Companies Act'' 1956 ("the Act"). 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.
Auditors 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 auditors 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
CompanyÂs 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 Act 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 June 30'' 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 the 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 (Auditors Report) Order'' 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act'' 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 Act'' 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 purpose 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'' Statement of Profit and Loss'' and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion'' the Balance Sheet'' Statement of Profit and Loss''
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Compan ies Act'' 1956;
e. On the basis of written representations received from the directors
as on June 30'' 2013'' and taken on record by the Board of Directors''
none of the directors is disqualified as on June 30'' 2013'' from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act'' 1956.
ANNEXURE TO AUDITORSÂ REPORT
[Referred to in paragraph Report on Other Legal and Regulatory
Requirements of the Auditors Report of even date to the members of
Sanghi Industries Limited on the financial statements for the year
ended June 30'' 2013]
(i) (a) The Company has maintained proper records showing full
particulars'' including quantitative details and situation of fixed
assets.
(b) The fixed assets of the Company have been physically verified by
the management during the year and no material discrepancies between
the book records and the physical inventory have been noticed. In our
opinion'' the frequency of verification is reasonable.
(c) In our opinion and according to the information and explanations
given to us'' a substantial part of fixed assets has not been disposed
of by the company during the year.
(ii) (a) The inventory has been physically verified by the management
during the year. In respect of inventory lying with third parties''
these have substantially been confirmed by them. In our opinion'' the
frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are 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 and no
material discrepancies were noticed on physical verification carried
out at the end of the year.
(iii) (a) As informed'' the Company has not granted any loans'' secured
or unsecured to companies'' firms or other parties covered in the
register maintained under section 301 of the Companies Act'' 1956.
Accordingly'' the provisions stated in paragraph 4(iii) (b)'' (c) and (d)
of the order are not applicable.
(b) As informed'' the Company has not taken any loans'' secured or
unsecured from companies'' firms or other parties covered in the
register maintained under section 301 of the Companies Act'' 1956.
Accordingly'' the provisions stated in paragraph 4 (iii) (f) and (g) of
the order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us'' there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory'' fixed assets and with
regard to the sale of goods and services. During the course of our
audit'' we have not observed any continuing failure to correct weakness
in internal control system of the company.
(v) According to the information and explanations given to us'' we are
of the opinion that the particulars of contracts or arrangements
referred to in section 301 of the Companies Act'' 1956 that need to be
entered into the register maintained under section 301 have been so
entered.
(vi) In our opinion and according to the information and explanations
given to us'' the company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act and the rules
framed there under.
(vii) In our opinion'' the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
company in respect of products where'' pursuant to the Rules made by the
Central Government of India'' the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act and we are of the opinion that prima facie'' the prescribed accounts
and records have been made and maintained.
(ix) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund'' investor education and protection fund'' employees state
insurance'' income-tax'' sales-tax'' wealth- tax'' service tax'' customs
duty'' excise duty'' cess and other material statutory dues applicable to
it.
(b) According to the information and explanations given to us'' no
undisputed amounts payable in respect of provident fund'' employeesÂ
state insurance'' investor education and protection fund'' income tax''
wealth tax'' service tax'' sales- tax'' customs duty'' cess and other
undisputed statutory dues were outstanding'' at the year end'' for a
period of more than six months from the date they became payable.
(x) In our opinion'' the accumulated losses of the company are not more
than fifty percent of its net worth. Further'' the company has not
incurred cash losses during the financial year covered by our audit and
the immediately preceding financial year.
(xi) As per the information and explanations given to us'' the Company
has not defaulted in repayment of dues to banks or financial
institutions during the year as per arrangements. The Company has not
borrowed any sums through debentures.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us'' the company has not
granted loans & advances on the basis of security by way of pledge of
shares'' debentures and other securities.
(xiii) In our opinion'' the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore'' the provisions of clause
(xiii) of paragraph 4 of the Companies (AuditorÂs Report) Order'' 2003
(as amended) are not applicable to the Company.
(xiv) In our opinion'' the Company is not dealing in or trading in
shares'' securities'' debentures and other investments. Accordingly'' the
provisions of clause (xiv) of paragraph 4 of the Companies (AuditorÂs
Report) Order'' 2003 (as amended) are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us'' the company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
(xvi) In our opinion'' the term loans have been applied for the purpose
for which the loans were raised.
(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
investment.
(xviii) According to the information and explanation given to us'' 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.
(xix) According to the information and explanations given to us'' no
debentures have been issued by the company during the year.
(xx) The Company has not raised money by way of public issue during the
year.
(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 instance of
fraud on or by the company'' noticed or reported during the year'' nor
have we been informed of such case by the management.
For Ankit & Co. For Haribhakti & Co.
Chartered Accountants Chartered Accountants
Firm Registration No. 000181S Firm Registration No.103523W
S. Brij Kumar Prashant M. Maharishi
Partner Partner
Membership No.19357 Membership No.41452
Place : Mumbai
Date : August 27'' 2013
Jun 30, 2012
1. We have audited the attached Balance Sheet of Sanghi Industries
Limited ('the Company') as at June 30, 2012 and also the Statement of
Profit and Loss and 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.
2. 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.
3. As required by the Companies (Auditor's Report) Order, 2003, (as
amended), issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of 'The Companies Act, 1956' of India
(the 'Act') and on the basis of such checks of the books and records
of the company as we considered appropriate and according to the
information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the paragraph 3 above, we report that:
i. 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;
ii. 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.
iii. The balance sheet, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account.
iv. In our opinion, the balance sheet, statement of profit and loss
and cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956.
v. On the basis of the written representations received from the
directors, as on June 30, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
June 30, 2012 from being appointed as a director in terms of clause (g)
of sub-section (1) of section 274 of the Companies Act, 1956.
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts 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 June 30, 2012;
b) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE TO AUDITORS' REPORT
[Referred to in paragraph 3 of the Auditors' Report of even date to the
members of Sanghi Industries Limited on the financial statements for
the year ended June 30, 20I2.]
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets of the company have been physically verified by
the management during the year and no material discrepancies between
the book records and the physical inventory have been noticed. In our
opinion, the frequency of verification is reasonable.
(c) According to the information and explanations given to us, the
Company has not disposed of any substantial part of the fixed assets
during the year.
(ii) (a) The inventory has been physically verified by the management
during the year. In respect of inventory lying with third parties,
these have substantially been confirmed by them. In our opinion, the
frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are 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 and no
material discrepancies were noticed on physical verification carried
out at the end of the year.
(iii) (a) As informed, the Company has not granted any loans, secured
or unsecured to companies, firms or other parties covered in the
register maintained under section 30I of the Companies Act, I956.
Accordingly, the provisions stated in paragraph 4(iii)(b),(c) and (d)
of the order are not applicable.
(b) As informed, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 30I of the Companies Act, I956.
Accordingly, the provisions stated in paragraph 4 (iii)(f) and (g) of
the order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct weakness
in internal control system of the company.
(v) According to the information and explanations given to us, we are
of the opinion that the particulars of contracts or arrangements
referred to in section 30I of the Companies Act, I956 that need to be
entered into the register maintained under section 30I have been so
entered.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act and the rules
framed there under.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause
(d) of sub-section (I) of Section 209 of the Act and we are of the
opinion that prima facie, the prescribed accounts and records have been
made and maintained.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees' state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it. No
undisputed amounts payable were outstanding as on 30th June 20I2 for a
period more than six months from the date they became payable.
(b) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of the
statute Nature of
dues Amount Period to which Forum where
dispute is
(Rs.in
Crore) the amount pending
relates
Central
Excise
Act,1944 Excise Demand 42.60 Various years Customs,
Excise &
Service
Customs
Act, 1962 Customs Demand 1.52 2005-10 tax Appellate
Tribunal
Service Tax
Act, 1944 Service Tax 6.76 Various years Customs,
Excise &
Service
Demand tax Appellate
Tribunal
Electricity
Act, 1994 Duty on 3.30 Various years Gujarat High
Court
Generation
from D G Set
Bombay Land
Revenue Land Revenue on 1.17 Various years Gujarat High
Court
Code, 1879 Leasehold Land
(x) In our opinion, the accumulated losses of the company are not more
than fifty percent of its net worth. Further, the company has not
incurred cash losses during the financial year covered by our audit and
the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the company has not
granted loans & advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
(xiii) of paragraph 4 of the Companies (Auditor's Report) Order, 2003
(as amended) are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of paragraph 4 of the Companies (Auditor's
Report) Order, 2003 (as amended) are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
(xvi) In our opinion, the term loans have been applied for the purpose
for which the loans were raised.
(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
investment.
(xviii) According to the information and explanation given to us, 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.
(xix) According to the information and explanations given to us, no
debentures have been issued by the company during the year.
(xx) The Company has not raised money by way of public issue during the
year.
(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 instance of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Ankit & Co. For Haribhakti & Co.
Chartered Accountants Chartered Accountants
FRN No.000I8IS FRN No.I03523W
S . Brij Kumar Prashant Maharishi
Partner Partner
M. No. I9357 M. No.4I452
Place : Mumbai
Date : 28th August, 20I2
Mar 31, 2010
1. We have audited the attached Balance Sheet of Sanghi Industries
Limited (the Company) as at March 31, 2010 and also the Profit and
Loss Account and the Cashflow 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.
2. 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.
3. As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (AuditorÃs Report) (Amendment) Order, 2004,
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of The Companies Act, 1956 of India (the "Act") and on
the basis of such checks of the books and records of the company as we
considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the paragraph 3 above, we report that:
i. 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;
ii. 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
iii. The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account
iv. In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956.
v. On the basis of the written representations received from the
directors, as on March 31, 2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts 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 March 31, 2010;
b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 3 of our report of even date)
1) a) The Company has maintained proper records showing full
particulars including quantitative details and situation of
fixed assets.
b) As informed to us, the assets have been physically verified by the
management during the year and there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification as compared with books
of accounts.
c) According to the information and explanations given to us, the
Company has not disposed off any substantial part of fixed assets
during the year.
2) a) According to the information and explanations given to us, the
inventory has been physically verified during the year
by the management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) According to the information and explanations given to us the
Company is maintaining proper records of inventory. The discrepancies
noticed on verification between the physical stocks and the book
records were not material.
3) a) According to the information and explanations given to us, the
Company has not granted any loans, secured or
unsecured, to Companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956.
b) According to the information and explanations given to us, the
Company has not taken any loans secured or unsecured from Companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956.
4) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory, fixed assets and with regard to the sale of
goods & services. During the course of our audit, we have not observed
any continuing failure to correct major weakness in internal control
system.
5) There are no Contracts or arrangements referred to in section 301 of
the Companies Act, 1956 that need to be entered in the register
maintained under this section. Accordingly, clause (v) (b) of paragraph
4 of the Order is not applicable to the Company.
6) In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits from public.
Therefore, the provisions of the Clause (vi) of paragraph 4 of the
Order are not applicable to the Company.
7) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8) We have broadly reviewed the books of account relating to the
material, labour and other item of cost maintained by the Company
pursuance to the rules made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained.
9) a) According to the records of the Company, undisputed statutory
dues including Provident Fund, Employees State
Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Wealth
Tax, Excise Duty, Cess and any other statutory dues have been generally
regularly deposited with the appropriate authorities. No undisputed
amounts payable were outstanding as on 31st March, 2010 for a period
more than six months from the date they became payable.
b) According to the information and explanations given to us, there
have been no dues of Income Tax, Wealth Tax, Customs Duty, Excise Duty,
Service Tax, Cess and Sales tax, that have not been deposited on
account of any dispute, except as under:
(Rs. Crore)
Name of the Forum where
statute Name of dues Amount Period to dispute is
which the pending
amount relates
Central Excise
Act,1944 Excise Demand 47.22 Various years Custom,
Excise & Serv
ice tax Appel
late Tribunal
Ahmedabad &
Delhi
Service Tax
Act,1994 Service Tax 9.28 Various years Custom, Exci
se & Service
tax Appellate
Demand Tribunal
Ahmedabad
Electricity Duty on
Act,1958 generation 3.30 Various years Gujarat High
Court
from DG Set
Bombay Land Land
Revenue Revenue on 1.17 Various years Gujarat High
Court
Code 1879 Leasehold Land
10) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year covered by our audit and in the immediately preceding financial
year.
11) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution, bank.
12) In our opinion, the term loans have been applied for the purpose
for which the loans were raised.
13) To the best of our knowledge and belief and according to the
information and explanations given to us, and on an overall examination
of the balance sheet of the Company, funds raised on short term basis
have, prima facie, not been used during the year for long term
investment.
14) Based on audit procedures performed and information and
explanations given by the management, we report that no material fraud
on or by the Company has been noticed or reported during the course of
our audit.
15) The clauses iii(b),(c),(d),(f),(g)(xii),(xiii),(xiv),(xv),(xviii),
(xix) and (xx) of paragraph 4 and 5 of the Order are not applicable to
the Company and hence not reported upon.
For Ankit & Co. For Haribhakti & Co.
Chartered Accountants Chartered Accountants
FRN No. 000181S FRN No.103523W
S . Brij Kumar Chetan Desai
Partner Partner
Membership No. 19357 Membership No.17000
Place: New Delhi
Date: 13th August, 2010
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