Mar 31, 2016
INDEPENDENT AUDITOR''S REPORT
To the Members of EMCO Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of EMCO Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, and 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 Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the 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 fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and 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 auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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. 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 standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its loss and its cash flows for the year ended on that date.
Emphasis of Matter
1. We refer to note 28 of the accompanying financial statement regarding the investments and loan aggregating to Rs.9919.64 Lacs into its wholly owned subsidiary EMCO Power Limited (EPL), which is setting up power projects in the state of Chhattisgarh and Odisha through joint venture companies. There has been temporary suspension of work on these projects by the management for the reasons stated therein. In the event, prolong delay, carrying value of the said investment will require to be adjusted for impairment.
2. We refer to note 27(b) of the accompanying financial statement regarding the liquidated damages/deduction made by customers aggregating to Rs,5805 Lacs, which are carried as Trade Receivables. The company has or is in the process of taking legal action for recovery of the same. Pending outcome of the matters which are presently unascertainable, no adjustments have been made in the accompanying financial statements.
Our opinion is not qualified in these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act , we give in the "Annexure A" 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 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 aforesaid standalone financial statements comply with the accounting standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) The matters described under the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
f) On the basis of written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016, from being appointed as a director in terms of section 164(2) of the Act.
g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rules 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 26(II) 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.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure A" to Independent Auditors'' Report referred to in Paragraph 1 under the heading of "Report on other legal and
regulatory requirements" of our report of even date.
1) In respect of its fixed assets :
a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.
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) According to the information and explanations given to us and the title deeds / lease deeds and other records examined by us, we report that the title deeds / lease deeds in respect of all the immovable properties of lands which are freehold, immovable properties of land that have been taken on lease and disclosed as fixed assets in the financial statement and buildings are held in the Company''s name or in the Company''s erstwhile name as at the balance sheet date except freehold land and buildings situated at Baroda and Rajkot having gross carrying value of ''21.02 lacs as at balance sheet date which are in the name of Urja Engineers Limited, the transferor company, which got amalgamated in to the Company.
2) As explained to us, physical verification of the inventories have been conducted at reasonable intervals by the management, which in our opinion is reasonable, having regard to the size of the Company and nature of its inventories. No material discrepancies were noticed on such physical verification.
3) The Company has granted unsecured loans to two wholly owned subsidiaries covered in the register maintained under Section 189 of the Act. The terms and conditions of the grant of such loans are not prejudicial to the interest of the company except in case of one subsidiary, company has given interest free loan. There is no schedule of repayment of principal and are repayable on demand. Also, there is no stipulation as to date of payment of interest. In view of this, question of overdue does not arise.
4) In respect of loans, investments, guarantees and security given by the Company:
a) Company has not directly or indirectly advanced loan to the persons or given guarantees or securities in connection with the loan taken by persons covered under Section 185 of the Act.
b) According to the information and explanations given to us, the activity of the Company falls under the definition of infrastructural facilities as defined under explanation to section 186 of the Act. Since section 186 of the Act is not applicable to such companies, the requirement of clause (iv)(b) of paragraph 3 of the Order is not applicable.
5) 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 clause (v) of paragraph 3 of the Order is not applicable to the Company.
6) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under subsection (1) of Section 148 of the Act applicable in respect of certain activities undertaken by the company and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
7) In respect of Statutory dues :
a) According to the records of the Company, there have been delays in depositing undisputed statutory of Tax Deducted at Source, Sales Tax, VAT, Service Tax, LBT, Excise Duty with appropriate authorities. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company is generally regular in depositing undisputed statutory dues of income tax, custom duty, Provident Fund, ESlC and other material statutory dues during the year with the 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 March 31, 2016 for a period of more than six months from the date they became payable.
b) According to the records of the Company and the information and explanations given to us, the disputed dues on account of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess that have not been deposited with appropriate authorities are as under:
Name of Statute |
Nature of Dues |
Amount in '' |
Period to which the amount relates |
Forum where the dispute is pending |
Sales Tax Act |
West Bengal VAT |
77,30,205 |
2007-08 & 2009 -10 |
Joint Commissioner of Sales Tax, Behala Circle |
Sales Tax Act |
Jharkhand VAT |
27,98,182 |
2009-09 & 2010 -11 |
Deputy Commissioner of Commercial Tax |
Name of Statute |
Nature of Dues |
Amount in '' |
Period to which the amount relates |
Forum where the dispute is pending |
Sales Tax Act |
Rajasthan VAT |
9,71,76,846 |
2011-12 & 2012 -13 |
Rajasthan Tax Board, Ajmer. |
Sales Tax Act |
Maharashtra VAT |
16,68,76,205 |
2005 -06 |
Joint Commissioner, Mazgaon. |
Sales Tax Act |
Uttar Pradesh VAT |
6,64,000 |
2011 -12 |
Asst.Commissioner Sales Tax, Barabanki, Circle-1 |
Sales Tax Act |
Rajasthan VAT |
1,62,466 |
2012 -13 |
Assistant Commissioner Works & Leasing Tax Bikaner, Rajasthan |
Central Excise Act |
Short Payment of Duty |
697,889 |
2007-08 |
Customs, Excise and Service Tax Appellate, Mumbai |
Central Excise Act |
Excise Duty |
1,25,99,049 |
2007-08, 2009-10, 2011-13 |
Additional Commissioner Central Excise & Customs |
Central Excise Act |
Excise Duty |
86,27,775 |
2009-10 |
Commissioner of central excise & Customs, Nasik |
Central Excise Act |
Excise Duty |
1,06,32,851 |
Oct 2013 to May 2014 |
Customs, Excise and Service Tax Appellate, Ahmadabad |
Central Excise Act |
Excise Duty |
3,83,85,129 |
April 2009-Sept 2013 |
Commissioner of central excise & Customs, Ahmadabad |
Central Excise Duty 12,63,37,485 Excise Act |
Nov,2001 to May 2015 & April,2009 to Aug,2010 |
Customs, Excise and Service Tax Appellate Tribunal, Mumbai |
||
Central Excise Act |
Excise Duty |
861,560 |
April 2009 to May 2015 |
Assistant Commissioner of Central Excise, Thane |
Central Excise Act |
Excise Duty |
2,57,41,820 |
2006-2012 |
Commissioner of Central Excise and Custom |
Central Excise Act |
Excise Duty |
14,209,518 |
July.2011 to Feb.2012 |
Commissioner, Central Excise & Customs, Nasik |
Central Excise Act |
Excise Duty |
4,151,743 |
July.2011 to Feb.2012 |
Additional Commissioner, Central Excise & Customs, Nasik |
Central Excise Act |
Excise Duty |
588,694 |
March 2007 to June 2008 |
Customs, Excise and Service Tax Appellate |
Central Excise Act |
Excise Duty |
21,61,338 |
April 2014 to July 2015 |
Asst. Commissioner of Central Excise & Customs, Jalgaon |
Income Tax Act |
Income Tax |
32,51,285 |
Ass. Yr. 2010-11 to 2013-14 |
Commissioner of Income Tax (Appeals), Thane |
Income Tax Act |
Income Tax |
45,50,292 |
2008-09 |
Assistant Commissioner of Income Tax |
Service Tax |
Service Tax and Penalty |
8,857,210 |
Jan 2005 -June 2006 |
Commissioner (Appeals), Central Excise and Customs, Vadodra |
Service Tax |
Service Tax ,lnterest and Penalty |
132,71,799 |
Jan 2007- Oct 2010 |
Commissioner (Appeals), Central Excise, Mumbai Zone-I |
Service Tax |
Penalty |
14,52,674 |
Jan-2007 to Oct-2010 |
Commissioner of Service Tax (Appeals)-ll, Mumbai- VII |
Service Tax |
Penalty |
430,491 |
Aug 2006 to Mar 2010 |
Customs Excise & Service Tax Appellate Tribunal |
Service Tax |
Service Tax and Penalty |
85,815 |
Oct.2007 to Dec.2008 |
Customs Excise & Service Tax Appellate Tribunal |
Service Tax |
Penalty |
847,854 |
April 2010 to March 2011 |
Customs Excise & Service Tax Appellate Tribunal |
In the following matters, the department has preferred appeals at higher levels:
Name of the Statute |
Nature of Dues |
Amount in '' |
Financial Year to which the amount relates |
Forum where dispute is pending |
Central Excise Act |
Excise Duty |
1,41,32,088 |
1996-01 |
Supreme Court |
Central Excise Act |
Excise Duty |
313,841 |
2008-09 |
Customs, Excise and Service Tax Appellate |
8) In our opinion and according to the information and explanations given to us, the Company has not delayed in repayment of loans to a financial institution or government or dues to debenture holders of the company. The Company has delayed in repayment of dues to banks during the year. The lender wise details are tabulated as under:
Name of Lender |
Amount (in Lakhs) |
Delay in Days |
Remarks, If any |
Dena Bank |
2907 |
- |
Overdrawn Working capital |
Federal Bank |
478 |
- |
Overdrawn Working capital |
Union Bank |
2871 |
- |
Overdrawn Working capital |
Exim Bank |
200 |
30 to 59 |
Working Capital term Loan |
6456 |
9) In our opinion and according to the information and explanations given to us, the company has utilized the money raised by way of term loans during the year for the purposes for which they were raised.
10) Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
11) In our opinion and according to the information and explanations given to us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
12) In our opinion company is not a nidhi company. Therefore, the provisions of clause (xii) of paragraph 3 of the Order are not applicable to the company.
13) In our opinion and according to the information and explanations given to us, all transactions with related parties are in compliance with sections 177 and 188 of the Act and their details have been disclosed in the financial statements etc., as required by the applicable accounting standards.
14) In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year and hence clause (xiv) of paragraph 3 of the Order is not applicable to the company.
15) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transaction with the directors or persons connected with him and covered under section 192 of the Act. Hence, clause (xv) of the paragraph 3 of the Order is not applicable to the Company.
16) To the best of our knowledge and as explained, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Annexure B" to Independent Auditors'' Report referred to in paragraph 2(f) under the heading "Report on other legal and regulatory requirements of our report of even date.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the Internal Financial Control over financial reporting of EMCO Limited
("the company") as of 31st March, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year then ended.
Management Responsibility for the Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with 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 company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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, 2016, 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 P. RAJ & CO. For Chaturvedi & Shah
Chartered Accountants Chartered Accountants
Firm Registration No. 108310W Firm Registration No. 101720W
Sd/- Sd/-
S. V. Chheda Jignesh Mehta
Partner partner
Membership No. 103938 Membership No. 102749
Mumbai, May 30, 2016 Mumbai, May 30, 2016
Mar 31, 2015
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of
EMCO Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2015, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of Significant
accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provision of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgements and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and 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 the disclosures in the financial statements. The
procedures selected depend on the auditor's judgement, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that 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 the 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 standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2015, its Profit and its cash flows for the year ended on
that date.
Emphasis of Matter
1. We refer to note 28 of the accompanying financial statement
regarding the Investments and loan aggregating to Rs. 9341.04 Lacs
into its wholly owned subsidiary EMCO Power Limited (EPL), which is
setting up power projects in the state of Chhattisgarh and Odisha
through joint venture companies. There has been temporary suspension of
work on these projects by the management for the reasons stated
therein. In the event, prolong delay, carrying value of the said
investment will require to be adjusted for impairment.
2. We refer to note 27(b) of the accompanying financial statement
regarding the liquidated damages/deduction made by customers
aggregating to Rs. 5805 lacs, which are carried as Trade Receivables.
The company has or is in the process of taking legal action for
recovery of the same. Pending outcome of the matters which are
presently unascertainable, no adjustments have been made in the
accompanying financial statements.
Our opinion is not qualified in these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's 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 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 standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of the written representations received from the
directors as on March 31, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 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 Rules 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 26 (II) 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.
iii. There has been no delay in transferring required amount to the
Investor Education and Protection Fund by the Company.
Annexure referred to in paragraph 1 under the heading Report on other
legal and regulatory requirements of our report of even date
i. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The fixed assets have been physically verified by the management as
per a phased programme of verification. In our opinion, the frequency
of verification is reasonable having regard to the size of the Company
and the nature of its assets. The discrepancies reported on
verification were not material and have been properly dealt with in the
books of account.
ii. a. The inventories have been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b. In our opinion and according to the information and explanations
given to us, 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. The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between physical inventories and
the book records were not material in relation to the operations of the
Company and the same have been properly dealt with in the books of
account.
iii. The Company has not granted any unsecured loans to companies,
firms or other parties covered in the register maintained under Section
189 of the Act.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and nature of its business for the
purchases of fixed assets and for the sale of goods and services.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in such internal control system.
v. The Company has not accepted any deposits from public.
vi. To the best of our knowledge and as explained, the Company has
maintained the cost records specified under Companies (Cost Records and
Audit) Rules, 2014 issued under sub section (1) of Section 148 of the
Act, in respect of Company's product to which the said rules are made
applicable and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have, however,
not made a detailed examination of the records with a view to determine
whether they are accurate.
vii. a. There have been delays in depositing undisputed statutory dues
of provident fund, employees state insurance, service tax, value added
tax, sales tax, WCT and Tax deducted at source with the appropriate
authorities. According to the information and explanations given to us
and on the basis of our examination of the books of account, the
Company is regular in depositing undisputed statutory dues of income
tax, wealth tax, custom duty, and other material statutory dues during
the year with the appropriate authorities. As on March 31, 2015, there
are no such undisputed dues payable for a period of more than six
months from the date they became payable.
b. As at 31st March, 2015 according to the records of the Company and
the information and explanations given to us disputed dues on account
of Income Tax, Sales Tax, Service Tax, Excise Duty, Custom Duty, Value
added Tax or Cess (as applicable) that have not been deposited before
appropriate authorities are as under:-
Name of Nature of Dues Amount in Rs. Period to which
the
Statute Lakhs amount relates
Sales Tax West Bengal VAT 42.91 2007-08
Act
Sales Tax West Bengal VAT 44.83 2009-10
Act
Sales Tax Jharkhand VAT 4.24 2008-09
Act
Sales Tax Jharkhand VAT 24.60 2010-11
Act
Sales Tax Rajasthan VAT 347.23 2011-12
Act
Central Short Payment of 6.98 2007-08
Excise Act Duty
Central Excise Duty 5.86 2007-08
Excise Act
Central Excise Duty 37.00 2011-12
Excise Act
Central Excise Duty 48.22 2012-13
Excise Act
Central Excise Duty 76.40 2005-11
Excise Act
Central Excise Duty 106.33 Oct 2013 to
Excise Act May 2014
Central Excise Duty 383.85 April 2009-
Excise Act Sept 2013
Central Excise Duty 5.89 March 2007 to
Excise Act June 2008
Service Tax Service Tax and 88.57 2004-07
Penalty
Service Tax Service Tax, Interest 130.83 April 2007 Â
and Penalty March 2008
Name of Statute Forum where the dispute is pending
Sales Tax Act West Bengal Commercial Taxes Appellate and
Revision Board
Sales Tax Act Joint Commissioner of Sales Tax
Sales Tax Act Deputy Commissioner of Commercial Tax
Sales Tax Act Deputy Commissioner of Commercial Tax
Sales Tax Act Asst. Commissioner
Central Excise Act Customs, Excise and Service Tax Appellate
Central Excise Act Additional Commissioner Central Excise & Customs
Central Excise Act Commissioner (Appeals)
Central Excise Act Additional Commissioner Central Excise & Customs
Central Excise Act Commissioner (Appeals)
Central Excise Act Customs, Excise and Service Tax Appellate
Central Excise Act Commissioner of central excise & Customs
Central Excise Act Customs, Excise and Service Tax Appellate,Jalgaon
Service Tax Commissioner (Appeals), Central Excise and
Customs, Vadodra
Service Tax Commissioner (Appeals), Central Excise, Mumbai
Zone
In the following matters, the department has preferred appeals at
higher levels:
Name of Nature of Dues Amount
in Rs. Financial
Year to Forum where dispute is
the Statute Lakhs which the
amount pending
relates
Sales Tax Rajasthan VAT 6.38 2008-10 Commercial Tax Officer
Act
Central Excise Duty 141.32 1996-01 Supreme Court
Excise Act
Central Excise Duty 4.10 1993-98 High Court
Excise Act
Central Excise Duty 3.14 2008-09 Customs, Excise and
Service
Excise Act Tax Appellate
c. The amount required to be transferred to investor education and
protection fund in accordance with the provisions of the Companies Act,
2013 and rules made there under has been transferred to such fund
within time.
viii. The Company does not have any accumulated losses at the end of
the financial year and has not incurred any cash losses in the current
and immediately preceding financial year
ix. Based on our audit procedures and as per the information and
explanations provided by the management, we are of the opinion that
Company has not defaulted in repayment of dues to banks and debentures
holders except during the year there has been overdrawn in working
capital facilities from banks. The details of such overdrawn during the
year and as at year end are as under:
Nature of Dues Overdrawn Range Overdrawn Range
(Amount in Rs.) (in no. of days)
Working Capital / Cash
Credit / Packing Rs. 2,000 lakhs to
Rs. 7,000 lakhs Up to 89 days
Credits / Other fund
based working capital
facilities*
* Aggregate principal amount overdrawn as at 31.3.2015 Â Rs. 3,300
lakhs
x. According to the information and explanations provided to us and the
records examined by us, the Company has given guarantee for loan taken
by its wholly owned subsidiary from bank. According to information and
explanation given to us, we are of the opinion that terms and
conditions of guarantee given is not prejudicial to the interest of the
Company.
xi. In our opinion and according to the information and explanations
given to us, term loan taken during the year have been applied for the
purpose for which they were obtained.
xii. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations provided by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For P. RAJ & CO. For Chaturvedi & Shah
Chartered Accountants Chartered Accountants
Firm Registration No. 108310W Firm Registration No. 101720W
Sd/- Sd/-
S. V. Chheda Amit Chaturvedi
Partner Partner
Membership No. 103938 Membership No. 103141
Mumbai, May 29, 2015 Mumbai, May 29, 2015
Mar 31, 2014
We have audited the accompanying financial statements of EMCO Limited
("the Company"), which comprise the Balance Sheet as at March 31, 2014,
and the Statement of Profit and Loss and the Cash Flow Statement for the
year then ended, and a summary of significant accounting policies and
other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards notified under the Companies Act, 1956 ("the
Act") read with the General Circular 15/2013 dated 13th September 2013
of the Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013. 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 auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity''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 March 31, 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.
Emphasis of Matter
We draw attention to Note 28 to these financial statements regarding the
Company''s investment and net loan aggregating to Rs. 8,123.20 Lakhs into
its wholly owned subsidiary EMCO Power Limited, which is setting up
power projects in the state of Chhattisgarh and Orissa through joint
venture companies. Said Investment has been utilised towards project
development expenditure like feasibility studies, acquisition of land,
allocation of water, EIA studies and other pre-operative expenses.
There are delays in these projects mainly on account of economic
scenario and uncertainty in coal allocation policy. In the event,
prolonged delay, carrying value of said Investment will require to be
adjusted for impairment.
Our opinion is not qualified in this matter
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s 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, the Profit and Loss statement
comply with the accounting standards notified under the Companies Act,
1956 read with the General Circular 15/2013 dated 13th September 2013
of the Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013.
e. on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors are disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure referred to the Auditors'' Report
(Referred to in Paragraph 1 under the heading Report on other legal and
regulatory requirements of our Report of even date)
1. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
As explained to us, the fixed assets have been physically verified by the
management as per a phased programme of verification. In our opinion,
the frequency of verification is reasonable having regard to the size of
the Company and the nature of its fixed assets. The discrepancies
noticed on such verification were not material and have been properly
dealt with in the books of account.
The Company has not disposed off a substantial part of fixed assets
during the year.
2. The management has conducted physical verification of inventories at
reasonable intervals. In respect of stocks lying with the third
parties, confirmation for most of the stocks has been received.
In our opinion and according to information and explanations given to
us, 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.
The Company is maintaining proper records of inventories. The
discrepancies noticed on verification between physical inventories and
the book records were not material in relation to the operations of the
Company and the same have been properly dealt with in the books of
account.
3. In respect of the loans, secured or unsecured, granted or taken by
the Company to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) According to the information and explanations provided to us and as
per the records examined by us, as at 31st March 2014, Company has
granted unsecured loans to three of its wholly owned subsidiaries
covered in the register maintained under section 301 of the Companies
Act, 1956. The maximum balance outstanding at any time during the year
was Rs. 15,111.24 lakhs and the year-end balance is Rs. 14,874.54 lakhs.
In our opinion and according to the information and explanations given
to us, the rate of interest other terms and conditions of such loan are
prima facie not prejudicial to the interest of the Company.
The loan granted to one of wholly owned subsidiary is repayable on
demand and to other two wholly owned subsidiary is not due during the
year for repayment; hence question of overdue principal amount doesn''t
arise. In cases, where there is no stipulation as to payment of
interest, same is converted into loan, therefore, question of receipt
of interest does not arise in this case. In other cases, company is
regular in receipt of interest.
b) As per information and explanations provided 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. Consequently, the requirements of Clauses (iii)
(f) and (iii) (g) of paragraph 4 of the Order are not applicable.
4. In our opinion and according to the information and explanations
provided to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventories, fixed assets and for the sale
of goods and services. During the course of our audit, no major
weakness has been noticed in the internal controls in respect of these
areas.
5. Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered into the register maintained under section 301 of the
Companies Act, 1956 have been so entered.
In our opinion and according to the information and explanations provided
to us, the transactions made in pursuance of such contracts
or arrangements have been made at reasonable prices having regard to
the prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
provided to us, the Company has not accepted any deposits from the
public. Therefore, the provisions of 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 cost records maintained by the Company
pursuant (Cost Accounting Records) Rules, 2011 prescribed by the
Central Government under Section 209(1) (d) and are of the opinion that
prima facie the prescribed records have been made and maintained. We
have however not made a detailed examination of the records with a view
to determine whether they are accurate or complete.
9. According to the information and explanations provided to us and on
the basis of our examination of the books of account, the Company has
been, except for certain cases generally regular in depositing
undisputed statutory dues including Provident Fund, Employees'' State
Insurance, Income Tax, Value Added Tax, Service Tax , Customs Duty,
Wealth Tax, Excise Duty, Cess, Investor Education and Protection Fund,
and other material statutory dues during the year with the appropriate
authorities. As on 31st March 2014, there are no undisputed dues
payable for a period of more than six months from the date they became
payable.
As at 31st March 2014, according to the records of the Company and the
information and explanations given to us, disputed dues on account of
Income Tax, Sales Tax, Service Tax, Excise Duty and other material
statutory taxes that have not been deposited before appropriate
authorities are as under:-
Name of
Statute Nature of
Dues Amount Period
to which the Forum where the dispute
is pending
(in
lakhs) amount
relates
Sales Tax
Act West Bengal
VAT 42.91 2007-08 West Bengal Commercial
Taxes Appellate
and Revision Board
Sales Tax
Act West Bengal
VAT 34.39 2009-10
Joint Commissioner of
Sales
Tax
Sales Tax
Act Jharkhand
VAT 3.38 2008-09 Deputy Commissioner of
Commercial Tax
Sales Tax
Act Gujarat
VAT 5.54 2008-09 Assistant Commissioner
of Sales
Tax
Central
Excise
Act Penalty
Proceeding 1.51 2002-05 CESTAT
Central
Excise
Act Short
Payment of
Duty 6.98 2007-08 CESTAT
Central
Excise
Act Interest 2.86 2009-10 CESTAT
Central
Excise
Act Excise
Duty 37.00 2011-12 Commissioner (Appeals)
Central
Excise
Act Excise
Duty 5.86 2007-08 Additional Commissioner
Central Excise
& Customs
Central
Excise
Act Excise
Duty 48.22 2012-13 Additional Commissioner
Central Excise
& Customs
Service
Tax Service
Tax and 88.57 2004-07 Commissioner (Appeals),
Central Excise
Penalty & Customs
Service
Tax Service
Tax,
Interest 175.18 Jan 2007
To Oct Additional
Commisioner of Service
Tax
and
Penalty 2010
Service
Tax Service
Tax 5.89 March 2007
to June CESTAT
2008
In the following matters, the department has preferred appeals at
higher levels:
Name of
the
Statute Nature of
Dues Amount Financial Year
to which the
Forum where dispute
is pending
(in
lakhs) amount relates
Sales
Tax Act Rajasthan
VAT 6.38 2008-10 Commercial Tax Offcer
Central
Excise
Act Excise
Duty 141.32 1996-01 Supreme Court
Central
Excise
Act Excise
Duty 4.10 1993-98 High Court
Central
Excise
Act Excise
Duty 3.14 2008-09 CESTAT
10. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses in current
financial year and in the immediately preceding financial year.
11. Based on our audit procedures and as per the information and
explanations provided by the management, we are of the opinion that
Company has not defaulted in repayment of dues to banks and debenture
holders except default during the year relating to repayment of
overdrawn working capital facilities from banks. The balances due
towards such overdrawn working capital facilities as at year end are as
under:
Nature of Dues Principal Amount due as at
31.3.2014 (Rs. in Lakhs)
Working Capital / Cash Credit / Packing
Credit / Other Fund based
Facilities Overdrawn 3,356
The Company has not borrowed any funds from financial institutions under
audit.
12. Based on our audit procedures and according to the information and
explanations provided 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.
13. In our opinion, the Company is not a chit fund / nidhi / mutual
benefit fund / society. Therefore, the provisions of clause 4(xiii) of
the Order are not applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in
shares, debentures and other investments. Accordingly, the provisions
of clause 4(xiv) of the Order are not applicable to the Company.
15. According to the information and explanations provided to us and
the records examined by us, the Company has given guarantee for loan
taken by its wholly owned subsidiary from bank. According to
information and explanation given to us, we are of the opinion that
terms and conditions of guarantee given is not prejudicial to the
interest of the Company.
16. In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
17. According to the information and explanations provided to us and
on an overall examination of the balance sheet of the Company, we are
of the opinion that the funds raised on short-term basis have not been
used for long-term investment.
18. According to the information and explanations provided to us and
on the basis of records examined by us, during the year Company has not
made a preferential allotment of shares to parties and companies
covered in the Register maintained under Section 301 of the Companies
Act, 1956.
19. According to the information and explanations provided to us and
the records examined by us, the Company had created security and charge
in respect of debentures.
20. The Company has not raised any money through a public issue during
the year.
21. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations provided by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For P. RAJ & CO. For Chaturvedi & Shah
Chartered Accountants Chartered Accountants
Firm Registration No. 108310W Firm Registration
No. 101720W
sd/- sd/-
Sanjay Chheda Amit Chaturvedi
Partner Partner
Membership No. 103938 Membership No. 103141
Mumbai, Mumbai,
25th April, 2014 25th April, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying fi nancial statements of Emco Limited
("the Company"), which comprise the Balance Sheet as at 31st March
2013, and the Statement of Profi t and Loss and the Cash Flow Statement
for the year then ended, and a summary of signifi cant accounting
policies and other explanatory information.
Management s Responsibility for the Financial Statements
Management is responsible for the preparation of these fi nancial
statements that give a true and fair view of the fi nancial position,
fi nancial performance and cash fl ows 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 fi nancial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor s Responsibility
Our responsibility is to express an opinion on these fi nancial
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 fi nancial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fi nancial statements. The
procedures selected depend on the auditor s judgment, including the
assessment of the risks of material misstatement of the fi nancial
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 fi nancial
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 fi nancial statements.
We believe that the audit evidence we have obtained is suffi cient 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 fi nancial 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 31st March 2013;
(b) in the case of the Statement of Profi t and Loss, of the profi t
for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash fl ows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor s Report) Order, 2003 ("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 specifi ed 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 Profi t 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 Profi t and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956;
e. on the basis of written representations received from the directors
as on 31st March, 2013, and taken on record by the Board of Directors,
none of the directors are disqualifi ed as on 31st March 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 referred to the Auditors Report
(Referred to in paragraph 1 of our report of even date)
1. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fi xed assets.
As explained to us, the fi xed assets have been physically verifi ed by
the management as per a phased programme of verifi cation. In our
opinion, the frequency of verifi cation is reasonable having regard to
the size of the Company and the nature of its fi xed assets. The
discrepancies noticed on such verifi cation were not material and have
been properly dealt with in the books of account.
The Company has not disposed off a substantial part of fi xed assets
during the year.
2. The management has conducted physical verifi cation of inventories
at reasonable intervals. In respect of stocks lying with the third
parties, confi rmation for most of the stocks has been received.
In our opinion and according to information and explanations given to
us, the procedures of physical verifi cation of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
The Company is maintaining proper records of inventories. The
discrepancies noticed on verifi cation between physical inventories and
the book records were not material in relation to the operations of the
Company and the same have been properly dealt with in the books of
account.
3. In respect of the loans, secured or unsecured, granted or taken by
the Company to / from companies, fi rms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) According to the information and explanations provided to us and as
per the records examined by us, as at 31st March 2013, Company has
granted unsecured loans to two of its wholly owned subsidiaries covered
in the register maintained under section 301 of the Companies Act,
1956. The maximum balance outstanding at any time during the year was
12,357.09 lakhs and the year-end balance is 11,646.87 lakhs.
In our opinion and according to the information and explanations given
to us, the rate of interest, other terms and conditions of such loan
are prima facie not prejudicial to the interest of the Company.
The loan granted to one of wholly owned subsidiary is repayable on
demand and to other wholly owned subsidiary is not due during the year
for repayment; hence question of overdue principal amount doesn t
arise. In respect of one of subsidiary receipt of interest is regular
and for other wholly owned subsidiary there is no stipulation as to
payment of interest, which is annually converted into loan.
b) As per information and explanations provided to us, the Company has
not taken any loans, secured or unsecured from companies, fi rms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956. Consequently, the requirements of Clauses
(iii) (f) and (iii) (g) of paragraph 4 of the Order are not applicable.
4. In our opinion and according to the information and explanations
provided to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventories, fi xed assets and for the
sale of goods and services. During the course of our audit, no major
weakness has been noticed in the internal controls in respect of these
areas.
5. Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered into the register maintained under section 301 of the
Companies Act, 1956 have been so entered.
In our opinion and according to the information and explanations
provided to us, the transactions made in pursuance of such contracts or
arrangements have been made at reasonable prices having regard to the
prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
provided to us, the Company has not accepted any deposits from the
public. Therefore, the provisions of 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 cost records maintained by the Company
pursuant (Cost Accounting Records) Rules, 2011 prescribed by the
Central Government under Section 209(1) (d) and are of the opinion that
prima facie the prescribed records have been made and maintained. We
have however not made a detailed examination of the records with a view
to determine whether they are accurate or complete.
9. According to the information and explanations provided to us and on
the basis of our examination of the books of account, the Company has
been generally regular in depositing undisputed statutory dues
including Provident Fund, Employees State Insurance, Income-tax,
Customs Duty, Wealth Tax, Service Tax, Value Added Tax, Excise Duty,
Cess, Investor Education and Protection Fund, and other material
statutory dues during the year with the appropriate authorities. As on
31st March 2013, there are no undisputed dues payable for a period of
more than six months from the date they became payable.
As at 31st March 2013, according to the records of the Company and the
information and explanations given to us, disputed dues on account of
Income Tax, Sales Tax, Service Tax, Excise Duty and other material
statutory taxes that have not been deposited before appropriate
authorities are as under:-
Name of Statute Nature of Dues Amount Period to which
( in
lakhs) the amount
relates
Sales Tax Act Maharashtra
Sales Tax 18.53 1992-93
Sales Tax Act Tamil Nadu VAT 137.51 2006-08
Sales Tax Act West Bengal VAT 42.91 2007-08
Sales Tax Act Gujarat VAT 0.35 2007-08
Sales Tax Act West Bengal VAT 34.39 2009-10
Sales Tax Act Jharkhand VAT 3.38 2008-09
Sales Tax Act Uttar Pradesh VAT 4.80 2011-12
Central Excise Act Penalty Proceeding 1.51 2002-05
Central Excise
Act Short Payment of
Duty 6.98 2007-08
Central Excise Act Interest 2.86 2009-10
Central Excise Act Excise Duty 37.00 2011-12
Service Tax Service Tax and 88.57 2004-07
Penalty
Service Tax Service Tax 6.24 2006-09
Service Tax Service Tax 3.49 2006-10
Service Tax Service Tax 3.89 2009-10
Service Tax Service Tax 1.18 2010-11
Service Tax Service Tax 5.86 2010-11
NAME Forum where the dispute is pending
Service Tax Assistant Commissioner of Sales Tax
Service Tax The Appellate Deputy Commissioner
Service Tax West Bengal Commercial Taxes Appel-
late and Revision Board
Service Tax Deputy Commissioner of Commercial Tax
Service Tax Joint Commissioner of Sales Tax
Service Tax Deputy Commissioner of Commercial Tax
Service Tax Additional Commissioner Grade II
Service Tax CESTAT
Service Tax CESTAT
Service Tax CESTAT
Service Tax Commissioner (Appeals)
Service Tax Commissioner (Appeals), Central Excise and
Customs
Service Tax CESTAT
Service Tax CESTAT
Service Tax CESTAT
Service Tax CESTAT
Service Tax Commissioner (Appeals), Central Excise
and Customs
10. The Company does not have accumulated losses at the end of the fi
nancial year. The Company has not incurred cash losses in current fi
nancial year and in the immediately preceding fi nancial year.
11. Based on our audit procedures and as per the information and
explanations provided by the management, we are of the opinion that,
the Company has not defaulted in repayment of dues to any fi nancial
institution or bank or to debenture holders as at the Balance Sheet
date.
12. Based on our audit procedures and according to the information and
explanations provided 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.
13. In our opinion, the Company is not a chit fund / nidhi / mutual
benefi t fund / society. Therefore, the provisions of clause 4(xiii) of
the Order are not applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in
shares, debentures and other investments. Accordingly, the provisions
of clause 4(xiv) of the Order are not applicable to the Company.
15. According to the information and explanations provided to us and
the records examined by us, the Company has given guarantee for loan
taken by its wholly owned subsidiary from bank. According to
information and explanation given to us, we are of the opinion that
terms and conditions of guarantee given is not prejudicial to the
interest of the Company.
16. The Company has not raised any term loans during the year covered
under audit.
17. According to the information and explanations provided to us and
on an overall examination of the balance sheet of the Company, we are
of the opinion that the funds raised on short-term basis have not been
used for long-term investment.
18. According to the information and explanations provided to us and
on the basis of records examined by us, during the year Company has not
made a preferential allotment of shares to parties and companies
covered in the Register maintained under Section 301 of the Companies
Act, 1956.
19. According to the information and explanations provided to us and
the records examined by us, the Company has created security and charge
in respect of debentures issued.
20. The Company has not raised any money through a public issue during
the year.
21. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the fi nancial statements and as
per the information and explanations provided by the management, we
report that no fraud on or by the Company has been noticed or reported
during the course of our audit.
By order of the Board of Directors
For EMCO LIMITED
Sd/-
Place: Mumbai Praveen Kumar
Date: 9th May, 2013 Company Secretary
Mar 31, 2012
1. We have audited the attached Balance Sheet of Emco Limited as at
31st March 2012, 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 have conducted our audit in accordance with the 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 the 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 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that
a. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
c. The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow statement dealt with by this report are in agreement with the
books of account;
d. In our opinion, the Balance Sheet, the Statement Profit and Loss
and the 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;
e. On the basis of written representations received from the
directors, as on 31st March 2012 and taken on record by the Board of
Directors, we report that none of the directors are disqualified as on
31st March 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
f. In our opinion, and to the best of our information and according to
the explanations provided to us, they said financial statements read
with the notes thereon, give the information required by the Companies
Act, 1956, in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:
i. in the case of Balance Sheet, of the state of affairs of the
Company as at 31st March 2012;
ii. in the case of Statement of Profit and Loss, of the profit for the
year ended on that date; and
iii. in case of the Cash Flow Statement, of the cash flows for the year
ended on that date.
Annexure referred to the Auditors' Report
(Referred to in paragraph 3 of our report of even date)
1. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
As explained to us, the fixed assets have been physically verified by
the management as per a phased programme of verification. In our
opinion, the frequency of verification is reasonable having regard to
the size of the Company and the nature of its fixed assets. The
discrepancies noticed on such verification were not material and have
been properly dealt with in the books of account.
In our opinion, the Company has not disposed off a substantial part of
fixed assets during the year and going concern status of the Company is
not affected.
2. The management has conducted physical verification of inventories
at reasonable intervals. In respect of stocks lying with the third
parties, confirmation for most of the stocks has been received.
In our opinion and according to information and explanations given to
us, 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.
The Company is maintaining proper records of inventories. The
discrepancies noticed on verification between physical inventories and
the book records were not material in relation to the operations of the
Company and the same have been properly dealt with in the books of
account.
3. In respect of the loans, secured or unsecured, granted or taken by
the Company to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a. According to the information and explanations provided to us and as
per the records examined by us, as at 31st March 2012, Company has
granted unsecured loans to two of its wholly owned subsidiaries covered
in the register maintained under section 301 of the Companies Act,
1956. The maximum balance outstanding at any time during the year was Rs.
15,243.60 lakhs and the year-end balance is Rs. 11,964.54 lakhs.
b. In our opinion and according to the information and explanations
given to us, the rate of interest, other terms and conditions of such
loan are prima facie not prejudicial to the interest of the Company.
c. As per information and explanations provided 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. Consequently, the requirements of Clauses
(iii) (f) and (iii) (g) of paragraph 4 of the Order are not applicable.
4. In our opinion and according to the information and explanations
provided to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventories, fixed assets and for the
sale of goods and services. During the course of our audit, no major
weakness has been noticed in the internal controls in respect of these
areas.
5. Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered into the register maintained under section 301 of the
Companies Act, 1956 have been so entered.
In our opinion and according to the information and explanations
provided to us, the transactions made in pursuance of such contracts or
arrangements have been made at reasonable prices having regard to the
prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
provided to us, the Company has not accepted any deposits from the
public. Therefore, the provisions of 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 cost records maintained by the Company
pursuant (Cost Accounting Records) Rules, 2011 prescribed by the
Central Government under Section 209(1) (d) and are of the opinion that
prima facie the prescribed records have been made and maintained. We
have however not made a detailed examination of the records with a view
to determine whether they are accurate or complete.
9. According to the information and explanations provided to us and on
the basis of our examination of the books of account, the Company has
been generally regular in depositing undisputed statutory dues
including Provident Fund, Employees' State Insurance, Income-tax,
Customs Duty, Wealth Tax, Service Tax, Value Added Tax, Excise Duty,
Cess, Investor Education and Protection Fund and other material
statutory dues during the year with the appropriate authorities. As on
31st March 2012, there are no undisputed dues payable for a period of
more than six months from the date they became payable.
As at 31st March 2012, according to the records of the Company and the
information and explanations given to us, disputed dues on account of
Income Tax, Sales Tax, Service Tax, Excise Duty and other material
statutory taxes that have not been deposited before appropriate
authorities are as under:
(All amount in Rs. lakhs, unless otherwise stated)
Period to which
the Forum where the
dispute is
Name of
Statute Nature of Dues Amount
amount relates pending
Sales
Tax Act Levy of Sales
Tax on
Excise 18.53 1992-93 Assistant
Commissioner of
Duty on Deemed
Export Sales Tax
Sales
Tax Act Non Deduction
of TDS on 137.51 2006-08 The Appellate
Deputy
Works contract Commissioner
Sales
Tax Act Non Deduction
of TDS on 42.91 2007-08 West Bengal
Commercial Taxes
Works contract Appellate and
Revision Board
Sales
Tax Act Non submission
of 9.87 2007-08 Deputy Commis
sioner of
Declaration
Forms Commercial Tax
Central
Excise Act Additions made
in 141.32 1996-01 Supreme Court
Assessable
Value
Central
Excise Act Additions
made in 4.69 2000-03 CESTAT
Assessable
Value
Central
Excise Act Penalty
Proceeding 1.51 2002-05 CESTAT
Central
Excise Act Interest on
Differential
Duty 15.94 2004-09 High Court
Central
Excise Act Additions
made in 3.14 2008-09 CESTAT
Assessable
Value
Central
Excise Act Interest on
Differential
Duty 5.73 2009-10 CESTAT
Service
Tax Service Tax
on Erection & 88.57 2004-07 Commissioner
(Appeals),
Commissioning
and Penalty Central Excise
and Customs
thereon
Service Tax Disallowance
of Input 12.02 2006-09 CESTAT
Service Credit
Service
Tax Service Tax
on Testing 5.86 2010-11 Commissioner
(Appeals),
Charges Central Excise
and Customs
Income
Tax Act Disallowance
of Expenses 0.73 2006-07 Commissioner of
Income Tax-
(Appeal)
Income
Tax Act Disallowance
of Expenses 47.72 2006-07 ITAT
10. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses in current
financial year, but had incurred cash losses in the immediately
preceding financial year.
11. Based on our audit procedures and as per the information and
explanations provided by the management, we are of the opinion that,
the Company has not defaulted in repayment of dues to any financial
institution or bank or to debenture holders as at the Balance Sheet
date.
12. Based on our audit procedures and according to the information and
explanations provided 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.
13. In our opinion, the Company is not a chit fund / nidhi / mutual
benefit fund / society. Therefore, the provisions of clause 4(xiii) of
the Order are not applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in
shares, debentures and other investments. Accordingly, the provisions
of clause 4(xiv) of the Order are not applicable to the Company.
15. According to the information and explanations provided to us and
the records examined by us, the Company has given guarantee for loan
taken by its wholly owned subsidiary from bank. According to
information and explanation given to us, we are of the opinion that
terms and conditions of guarantee given is not prejudicial to the
interest of the Company.
16. The Company has raised term loans during the year. According to
the information and explanations provided to us and the records
examined by us, we are of opinion that the term loans outstanding at
the beginning of the year and those raised during the year have been
applied by the Company for the purpose for which they were obtained.
17. According to the information and explanations provided to us and
on an overall examination of the balance sheet and cash flow statement
of the Company, we are of the opinion that there are no funds raised on
short-term basis that have been used for long-term investment.
18. According to the information and explanations provided to us and
on the basis of records examined by us, during the year Company has not
made a preferential allotment of shares to parties and companies
covered in the Register maintained under Section 301 of the Companies
Act, 1956.
19. According to the information and explanations provided to us and
the records examined by us, the Company has created security and charge
in respect of debentures issued.
20. The Company has not raised any money through a public issue during
the year.
21. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations provided by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For P. RAJ & CO. For CHATURVEDI & SHAH
Chartered Accountants Chartered Accountants
Firm Registration No. 108310W Firm Registration No. 101720W
Sd/- Sd/-
P. S. Shah Amit Chaturvedi
Partner Partner
Membership No. 44611 Membership No. 103141
Mumbai, 15th May 2012 Mumbai, 15th May 2012
Mar 31, 2011
1) We have audited the attached Balance Sheet of EMCO Limited as at
31st March 2011, Profit and Loss Account and the Cash Flow statement
for the year ended on that date annexed thereto. These financial
statements are responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2) We have conducted our audit in accordance with the 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 the 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 (Ãthe
OrderÃ) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4) Further to our comments in the Annexure referred to above, we report
that:
a. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
c. The Balance Sheet, Profit and Loss Account and the Cash Flow
statement dealt with by this report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Profit and Loss Account and the
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;
e. On the basis of written representations received from the
directors, as on 31st March 2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
f. In our opinion, and to the best of our information and according to
the explanations provided to us, the said financial statements read
with the notes thereon, give the information required by the Companies
Act, 1956, in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:
i. in the case of Balance Sheet, of the state of affairs of the
Company as at 31st March 2011;
ii. in the case of Profit and Loss Account, of the loss for the year
ended on that date; and
iii. in case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE REFERRED TO THE AUDITORS' REPORT
(Referred to in paragraph 3 of our report of even date)
1) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
The fixed assets have been physically verified by the management as per
a phased programme of verification. In our opinion, the frequency of
verification is reasonable having regard to the size of the Company and
the nature of its fixed assets. The discrepancies noticed on such
verification were not material and have been properly dealt with in the
books of accounts.
Fixed assets disposed off during the year were not substantial and
therefore do not affect the going concern assumption.
2) The management has conducted physical verification of inventory at
reasonable intervals. In respect of stocks lying with the third
parties, confirmation for most of the stocks has been received.
In our opinion, 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.
The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between physical inventories and
the book records were not material in relation to the operations of the
Company and the same have been properly dealt with in the books of
account.
3) According to the information and explanations provided to us and as
per the records examined by us, as at 31st March 2011, Company has
granted interest free unsecured loans amounting to ` 684,043 lakhs to
two of its wholly owned subsidiaries covered in the register maintained
under section 301 of the Companies Act, 1956. The maximum balance
outstanding during the year amounted to ` 684,043 lakhs.
In our opinion, other terms and conditions of such loan are prima facie
not prejudicial to the interest of the Company.
As per information and explanations provided 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
provided to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory, fixed assets and for the sale
of goods and services. During the course of our audit, no major
weakness has been noticed in the internal controls.
5) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered into the register maintained under section 301 of the
Companies Act, 1956 have been so entered.
In our opinion and according to the information and explanations
provided to us, the transactions made in pursuance of such contracts or
arrangements have been made at reasonable prices having regard to the
prevailing market prices at the relevant time.
6) In our opinion and according to the information and explanations
provided to us, the Company has not accepted any deposits from the
public.
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 accounts maintained by the
Company pursuant 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 are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have however not
made a detailed examination of the records with a view to determine
whether they are accurate or complete.
9) According to the information and explanations provided to us and on
the basis of our examination of the books of account, the Company has
been generally regular in depositing undisputed statutory dues
including Provident Fund, Employees' State Insurance, Income-tax,
Customs Duty, Wealth Tax, Service Tax, Value Added Tax, Excise Duty,
Cess, Investor Education and Protection Fund, and other material
statutory dues during the year with the appropriate authorities. As on
31st March 2011, there are no undisputed dues payable for a period of
more than six months from the date they became payable.
As at 31st March 2011, according to the records of the Company and the
information and explanations given to us, following are the particulars
of disputed dues on account of Income Tax, Sales Tax, Service Tax,
Excise Duty and other material statutory dues :
Name of Statute Nature of Dues Rs in
Lakhs
Sales Tax Act Levy of Sales Tax
on Excise Duty on 18.53
Deemed Export
Sales Tax Act Non Deduction of
TDS on Works 29.47
contract
Sales Tax Act Non submission of
Declaration 33.52
Forms
Central Excise
Act Additions made in
Assessable Value 234.74
Central Excise
Act Additions made in
Assessable Value 4.69
Central Excise
Act Penalty Proceeding 1.51
Central Excise
Act Interest on Differ
-ential Duty 21.63
Central Excise
Act Additions made in
Assessable Value 3.14
Service Tax Service Tax on
Erection & Commis- 88.57
sioning and
Penalty thereon
Service Tax Disallowance of
Input Service Credit 6.24
Income Tax Act Penalty Proceeding
under Section 41.34
271(1)(c)
Income Tax Act Non Credit of Tax
Deducted at 7.62
Source paid IT,
Income Tax Act Disallowance of
Expenses 35.76
Income Tax Act Disallowance of
Expenses 0.73
Income Tax Act Disallowance of
Expenses 51.90
Income Tax Act Short credit for
TDS Certifcates 78.96
Income Tax Act Non Credit of Tax
Deducted at 24.85
Source paid
Income Tax Act Non Credit of Tax
Deducted at 100.86
Source paid
Name of Statute Period to which Forum where the
the amount relates dispute is pending
Sales Tax Act 1992-93 Assistant Commissioner
of Sales Tax
Sales Tax Act 2007-08 Joint Commissioner of
Commercial Taxes
Sales Tax Act 2006-07 Deputy Commissioner of
Commercial Taxes
Central Excise
Act Additions 1996-01 Supreme Court
Central Excise
Act Additions 2000-03 CESTAT
Central Excise
Act 2002-05 CESTAT
Central Excise
Act 2004-09 CESTAT
Central Excise
Act 2008-09 CESTAT
Service Tax 2004-07 Commissioner (Appeals),
Central Excise
and Customs
Service Tax 2006-09 CESTAT
Income Tax
Act 2005-06 Commissioner of Income
Tax-(Appeal)
Income Tax
Act 2005-06 Deputy Commissioner of
Income Tax
Act 2006-07 Income Tax Appellate
Tribunal
Income Tax
Act 2006-07 Commissioner of Income
Tax-(Appeal)
Income Tax
Act 2007-08 CIT-(Appeal)
Income Tax
Act 2007-08 Additional commissioner
of IT
Income Tax
Act 2007-08 Deputy Commissioner of
IT, TDS Circle
Income Tax
Act 2008-09 Deputy Commissioner of
IT, TDS Circle
10) Company has incurred cash losses in the current financial year. The
Company does not have accumulated losses at the end of the financial
year and has not incurred cash losses in the immediately preceding
financial year.
11) Based on our audit procedures and as per the information and
explanations provided by the management, we are of the opinion that,
the Company has not defaulted in repayment of dues to any financial
institution or bank or to debenture holders as at the Balance Sheet
date.
12) Based on our audit procedures and according to the information and
explanations provided 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.
13) In our opinion and according to the information and explanations
provided to us, the nature of activities of the Company does not
attract the provisions of clause 4(xiii) of the Companies (Auditors'
Report) Order, 2003.
14) In our opinion, the Company is not dealing in or trading in shares,
debentures and other investments. Accordingly, the provisions of clause
4(xiv) of the Companies (Auditor's Report) Order, 2003 are not
applicable to the Company.
15) According to the information and explanations provided to us and
the records examined by us, the Company has given guarantee for loan
taken by its wholly owned subsidiary from bank. In our opinion, terms
and conditions of guarantee given is not prejudicial to the interest of
the Company.
16) According to the information and explanations provided to us and
the records examined by us, in our opinion, the term loans were applied
by the Company for the purpose for which they were obtained.
17) According to the information and explanations provided to us and on
an overall examination of the balance sheet and cash flow statement of
the Company, in our opinion, the funds raised on short-term basis have
not been used for long- term investment.
18) According to the information and explanations provided to us and on
the basis of records examined by us, the Company has made a
preferential allotment of shares to a party covered in the register
maintained under section 301 of the Companies Act, 1956. In our
opinion, the price at which shares have been issued is not prejudicial
to the interest of the Company.
19) According to the information and explanations provided to us and
the records examined by us, the Company has created security and charge
in respect of debentures issued.
20) The Company has not raised any money through a public issue during
the year.
21) Based up on the audit procedure performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations provided by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For P. RAJ & CO.
Chartered Accountants
Sd/-
P. S. Shah
Proprietor
Membership No. 44611
Firm Registration No. 108310W
Mumbai, 30th May, 2011
Mar 31, 2010
1) We have audited the attached Balance Sheet of EMCO Limited as at 31
st March 2010, related Profit and Loss Account and the Cash Flow
statement for the year ended on that date annexed thereto. These
financial statements are responsibility of the Companys management.
Our responsibility is to express an opinion on these financial
statements based on our audit,
2) We have conducted our audit in accordance with the 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 the 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 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4) Further to our comments in the Annexure referred to above, we report
that:
a. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
c. The Balance Sheet, Profit and Loss Account and the Cash Flow
statement dealt with by this report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Profit and Loss Account and the
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;
e. On the basis of written representations received from the
directors, as on 31st March 2010 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31 st March 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
f. In our opinion, and to the best of our information and according to
the explanations provided to us, the said financial statements read
with the notes thereon, give the information required by the Companies
Act, 1956, in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:
i. in the case of Balance Sheet, of the state of affairs of the Company
as at 31 st March 2010;
ii. in the case of Profit and Loss Account, of the profit for the year
ended on that date; and
iii. in case of the Cash Flow Statement, of the cash flows for the year
ended on that date.
Annexure referred to Auditors Report
(Referred to in paragraph 3 of our report of even date)
1) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets,
The fixed assets have been physically verified by the management as per
a phased programme of verification. In our opinion, the frequency of
verification is reasonable having regard to the size of the Company and
the nature of its fixed assets. The discrepancies noticed on such
verification were not material and have been properly dealt with in the
books of accounts,
Fixed assets disposed off during the year were not substantial and
therefore do not affect the going concern assumption.
2) The management has conducted physical verification of inventory at
reasonable intervals. In respect of stocks lying with the third
parties, confirmation for most of the stocks has been received.
In our opinion, 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.
The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between physical inventories and
the book records were not material in relation to the operations of the
Company and the same have been properly dealt with in the books of
account.
3) According to the information and explanations provided to us and as
per the records examined by us, ason 31 st March 201 0, Company has
granted unsecured interest free loans amounting to Rs. 4,645.48 lakh to
three of its wholly owned subsidiaries covered in the register
maintained under section 301 of the Companies Act, 1956. The maximum
balance outstanding during the year amounted to Rs. 9,419.86 lakh.
In our opinion, other terms and conditions of such loan are prima facie
not prejudicial to the interest of the Company.
In the absence of terms of repayment, we are not able to comment on the
regularity of the repayment of loans.
As per information and explanations provided 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
provided to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory, fixed assets and for the sale
of goods and services. During the course of our audit, no major
weakness has been noticed in the internal controls.
5) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered into the register maintained under section 301 of the
Companies Act, 1956 have been so entered.
In our opinion and according to the information and explanations
provided to us, the transactions made in pursuance of such contracts or
arrangements have been made at reasonable prices having regard to the
prevailing market prices at the relevant time.
6) In our opinion and according to the information and explanations
provided to us, the Company has not accepted any deposits from the
public.
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 accounts maintained by the
Company pursuant 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 are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have, however
not made a detailed examination of the records with a view to determine
whether they are accurate or complete.
9) According to the information and explanations provided to us and on
the basis of our examination of the books of accounts, the Company has
been generally regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income-tax, Customs Duty, Wealth Tax, Sales
Tax, Service Tax, Excise Duty, Cess and other statutory dues during the
year with the appropriate authorities. As on 31 st March 2010, there
are no undisputed dues payable for a period of more than six months
from the date they became payable.
As at 31 st March 2010, according to the records of the Company and the
information and explanations given to us, the following are the
particulars of disputed dues on account of Sales Tax, Income Tax,
Excise Duty, Service Tax and
Name of Statute Nature of Dues Amount
(Rupees
in lakhs)
Sales Tax Act Levy of Sales Tax on Excise 18.53
Duty on Deemed
Export
Sates Tax Act Non-submission of Statutory 12.49
Forms
Central Excise Act Interest on Differential Duty 21.63
Central Excise Act Interest on Wrong Utilization 5.00
of Cenvat Credit
Service Tax Service Tax on Erection and 1.74
Commissioning
Service Tax Service Tax on Erection and 44.28
Commissioning
Income Tax Act Disallowance of Expenses 90.56
Income Tax Act Disallowance of Expenses 0.73
Income Tax Act Non Credit of Taxes and 18.39
Interest
name of Statute Period to which the Forum where the
amount relates dispute is pending
Sales Tax Act 1992-93 Assistant
Commissioner of
Sales Tax
Sales Tax Act 2000-01 Assistant
Commissioner of
Sales Tax
Central Excise Act 2004-09 CESTAT
Central Excise Act 2007-08 The Commissioner
of Central Excise
(Appellant)
Service Tax 1999-02 CESTAT
Service Tax 2005-06 Additional
Commissioner of
Central Excise
Income Tax Act 2006-07 Commissioner of
Income Tax
(Appeals)
Income Tax Act 2006-07 Commissioner of
Income Tax
(Appeals)
Income Tax Act 2006-07 Assistant
Commissioner of
Income Tax
10) The Company does not have accumulated losses at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
11) Based on our audit procedures and as per the information and
explanations provided by the management, we are of the opinion that,
the Company has not defaulted in repayment of dues to any financial
institution or bank or to debenture holders as at the Balance Sheet
date.
1 2) Based on our audit procedures and according to the information and
explanations provided 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.
13) In our opinion and according to the information and explanations
provided to us, the nature of activities of the Company does not
attract the provisions of clause 4(xiii) of the Companies (Auditors
Report) Order, 2003.
14) In our opinion, the Company is not dealing in or trading in shares,
debentures and other investments.
Accordingly, the provisions of clause 4(xiv) of the Companies
(Auditors Report) Order, 2003 are not applicable to the Company.
15) According to the information and explanations provided to us and
the records examined by us, the Company has given guarantee for loan
taken by its wholly owned subsidiary from bank. In our opinion, terms
and conditions of guarantee given is not prejudicial to the interest of
the Company.
16) According to the information and explanations provided to us and
the records examined by us, in our opinion, the term loans were applied
by the Company for the purpose for which they were obtained.
17) According to the information and explanations provided to us and
on an overall examination of the balance sheet and cash flow statement
of the Company, in our opinion, the funds raised on short term basis
have not been used for long-term investment.
18) According to the information and explanations provided to us and
on the basis of records examined by us, the Company has made a
preferential allotment of shares to party covered in the register
maintained under section 301 of the Companies Act, 1 956. In our
opinion, the price at which shares have been issued is not prejudicial
to the interest of the Company
19) According to the information and explanations provided to us and
the records examined by us, the Company has created security and charge
in respect of debentures issued.
20) The Company has not raised any money through a public issue during
the year.
21) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations provided by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For P. RAJ & CO.
Chartered Accountants
P. S. Shah
Proprietor
Membership No. 44611
Firm Registration No. 10831OW
Mumbai, 26th May 2010
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