Mar 31, 2023
The Members of Suprajit Engineering Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Suprajit Engineering Limited ("the Company"), which comprise the standalone Balance sheet as at March 31 2023, the standalone Statement of Profit and Loss, including the statement of Other Comprehensive Income/ (Loss), the standalone Cash Flow Statement and the standalone Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended ("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, 2023, its profit including other comprehensive income/ (loss), its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), asspecified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Standalone Financial Statements'' section of our
report. We are independent of the Company in accordance with the ''Code of Ethics'' issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Impairment assessment of Investments in Subsidiaries (as described in Note 6(a) of the standalone financial statements) |
|
As at March 31,2023, the carrying value of investments in wholly owned subsidiaries included in the standalone balance sheet amounts to Rs. 2,599.59 million (net of impairment provision). To assess if there is any impairment in these investments, management conducts impairment tests annually or whenever changes in circumstances or events indicate that, the carrying amount of such investment may not be recoverable. An impairment loss is recognized if the recoverable amount is lower than the carrying value. The recoverable amount is estimated by calculating the value in use, basis valuation conducted by the management factoring future business plans and such valuation report/ future business plans are reviewed and approved by the Audit Committee/ Board of Directors of the Company. This is a key audit matter as the testing of investment impairment is complex and involves significant judgment. The key assumptions included in impairment tests are projected revenue growth, operating margins, discount rates and terminal growth etc. |
Our audit procedures included the following: We understood the Company''s process for identification of indicators for impairment and evaluated the Company''s internal controls over its impairment assessment of investment in subsidiaries. We understood the key assumptions applied by the management such as revenue growth, operating margins, discount rates and terminal growth rates in determining impairment; We tested the key assumptions and considered the sensitivity scenarios performed by management; We tested the methodologies used and the computations by the management in their valuation reports; and We assessed the disclosures made in the standalone financial statements. |
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements, consolidated financial statements and our auditor''s report thereon. The Annual report is expected to be made available to us after the date of this auditor''s report.
Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether such other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income/ (loss), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company''s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Charged with Governance are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("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 1" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
(c) The standalone Balance Sheet, the standalone Statement of Profit and Loss including the Statement of Other Comprehensive Income/ (Loss), the standalone Cash Flow Statement and standalone Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31,2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls of the Company with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2023 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer note 37(a) to the standalone financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, on long-term contracts including derivative contracts - Refer note 20 and note 43(ii) to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv.a) The management has represented that, to the best of its knowledge and belief, as disclosed in the note 50(v) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v.a) The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
b) The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with section 123 of the Act.
c) As stated in note 17 to the standalone financial statements,
the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules,
2014 is applicable for the Company only w.e.f. April 1, 2023,
reporting under this clause is not applicable.
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
Partner
Membership Number: 213803
Unique Document Identification Number (UDIN):
23213803BGXALC9736
Place of Signature: Bengaluru
Date: May 29, 2023
Mar 31, 2018
INDEPENDENT AUDITORS'' REPORT ON STANDALONE FINANCIAL STATEMENTS
To
The Members of SUPRAJIT ENGINEERING LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Suprajit Engineering Limited ("the Companyâ), which comprises of the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Actâ)with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS 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 standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of 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 standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other Matter
The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April
01, 2016 included in these standalone Ind AS financial statements, are based on the previously issued standalone financial statements prepared in accordance with the recognition and measurement principles of the Accounting Standards, specified under section 133 of the Companies Act, 2013, read with relevant rules issued there under and other accounting principles generally accepted in India and audited by the predecessor auditor whose report for the year ended March 31, 2017 and March 31, 2016 dated May 29, 2017 and May 30, 2016 respectively expressed an unmodified opinion on those standalone financial statements and the restated financial statements for the year ended March 31, 2017, which was restated to give effect to scheme of Amalgamation between the Company and Phoenix Lamps Limited (erstwhile subsidiary of the Company), pursuant to the approval of the Honourable National Company Law Tribunal vide its order dated August 11, 2017, on which the predecessor auditor has expressed an unmodified opinion vide report dated September 13, 2017, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2016 ("the Orderâ) issued by the Central Government of India in terms of subsection (11) of section 143 of the Act, we give in the Annexure 1 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 purpose of our audit;
(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of section 164(2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate report in "Annexure 2â to this report; and
(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer note 35 to the standalone Ind AS financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer note 18 and note 44(iv) to the standalone Ind AS financial statements; and
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Statement on the matters specified in paragraphs 3 and 4 of the Companies (Auditor''s report) Order, 2016 ("the Order")
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment. However, identification/ tagging of certain classes of assets needs to be further strengthened to facilitate timely reconciliation with results of physical verification.
(b) During the year, the Company has carried out physical verification of certain property, plant and equipment in accordance with the planned programme, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Major portion of the assets verified during the year were reconciled with fixed asset register and no material discrepancies were noted and in respect of certain classes of assets reconciliation process is under way. Pending outcome of such reconciliation no adjustments have been made to these Ind AS financial statements.
(c) According to the information and explanations given by the management and confirmation from banks relating to title deeds of immovable properties mortgaged with the banks, the title deeds of immovable properties are held in the name of the Company.
(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given by the management, the Company has
(c) According to the records of the Company, there are no dues of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and services tax and cess which have not been deposited on account of any dispute, except the following:
Name of the Statute |
Nature of the dues |
Amount (Rs, in millions) |
Payment under protest |
Period (financial year) to which the amount relates |
Forum where dispute is pending |
The Income Tax Act, 1961 |
Disallowance of certain expenses and benefit (including interest) |
1.26 |
- |
2012-13 |
Income Tax Appellate Tribunal |
The Finance Act, 1994 |
Ineligible cenvat credit availed (including interest and penalty) |
1.03 |
- |
2009-10 & 2010-11 |
Customs, Excise and Service Tax Appellate Tribunal, New Delhi |
0.11 |
- |
2015-16 |
Customs Excise & Service tax Appellate Tribunal |
||
Sales Tax (various statutes) |
Value added tax/Sales tax |
33.75 |
0.8 |
2006-07 |
Joint Commissioner of Sales Tax (Appeals) |
28.67 |
0.8 |
2009-10 |
|||
2.93 |
0.3 |
2012-13 |
Deputy Commissioner of Commercial Tax (Appeals) |
complied with the provisions of section 185 and 186 of the Act in respect of grant of loans to directors including entities in which they are interested and in respect of loans and advances given, making investments and providing guarantees and securities, as applicable.
(v) In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act, and the rules framed there under, to the extent applicable, have been complied with. We are informed by the management that no order has been passed by the National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act, related to the manufacture of automobile components and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowings to bank or dues to a financial institution. The Company did not have any outstanding dues to debenture holders or government during the year.
(ix) In our opinion and according to information and explanations given by the management, monies raised by the Company by way of term loans were applied for the purposes for which the loans were obtained. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Act where applicable and the details have been disclosed in the notes to the standalone Ind AS financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Act.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Report on the Internal Financial Controls under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 (âthe Act")
We have audited the internal financial controls over financial reporting of Suprajit Engineering Limited ("the Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. 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 the 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting with reference to these standalone Ind AS financial statements 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 as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these standalone Ind AS financial statements 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 over financial reporting with reference to these standalone Ind AS financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone Ind AS financial statements, 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 internal financial controls over financial reporting with reference to these standalone Ind AS financial statements.
Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Standalone Ind AS Financial Statements
A company''s internal financial control over financial reporting with reference to these standalone Ind AS financial statements 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 with reference to these standalone Ind AS financial statements 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 with reference to these standalone Ind AS financial statements
Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone Ind AS financial statements, 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 with reference to these standalone Ind AS financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone Ind AS financial statements 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, adequate internal financial controls over financial reporting with reference to these standalone Ind AS financial statements and such internal financial controls over financial reporting with reference to these standalone Ind AS financial statements were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Rajeev Kumar
Partner
Membership No.: 213803
Place : Bengaluru
Date : May 29, 2018
Mar 31, 2017
INDEPENDENT AUDITORS'' REPORT ON STANDALONE FINANCIAL STATEMENTS
To
The Members of SUPRAJIT ENGINEERING LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Suprajit Engineering Limited (âthe Company"), which comprise the Balance Sheet as at 31st March, 2017, the Profit and Loss Statement and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as âthe standalone financial statements").
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 (âthe 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 and the Companies (Accounting Standards) Amendment Rules, 2016.
This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors'' 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 standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone 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 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 standalone 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, 2017, and its profit and its cash flows for the year ended on that date.
Other Matter
We did not audit the financial statements of erstwhile Phoenix Lamps Limited (the âTransferor Company"), included in the financial statements pursuant to amalgamation with the Company (Refer Note 23.5 of this standalone financial statements), which constitute total assets of '' 2551.25 million as at 31st March, 2017, total revenue (including other income) of Rs, 2366.21 million and net cash outflows of Rs, 0.52 million for the year then ended as considered in the standalone financial statements. The financial statements and other financial information of the Transferor Company have been audited by other auditors whose reports have been furnished to us, and our opinion on these financial statements in so far as it relates to the amounts and disclosures included in respect of the Transferor Company is based solely on the report of such other auditors.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (''the Order'') issued by the Central Government of India in terms of section 143(11) of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the ''Annexure A'' a statement on the matters specified in the paragraph 3 and 4 of the said Order, to the extent applicable
2. As required by Section 143 (3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. The Balance Sheet, the Profit and Loss Statement, 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 and the Companies (Accounting Standards) Amendment Rules, 2016;
e. On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.
f. With respect to the adequacy 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''; and
g. With respect to the other matters to be included in the Auditor''s report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. the Company has pending litigations disclosed as contingent liabilities in its Note No.23.6.1 to the standalone financial statements, the impact if any on the final settlement of these litigations is not ascertainable at this stage;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. there were no delays in transferring undisputed amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year and
iv. the Company has provided requisite disclosure in note no. 23.15 of its standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016 and these are in accordance with the books of account maintained by the Company.
(i) (a) As stated in Note No. 23.4 to the standalone financial statement, the full particulars giving quantitative details and situation of fixed assets are maintained in the ERP system in respect of additions made after 1st April 2008, however certain particulars requires to be updated. The particulars of fixed assets acquired prior to this date have been updated in the ERP system in a summarized format. However, item wise particulars are available for major assets in manual form.
(b) We are informed by the management that most of the fixed assets of the Company are being physically verified in accordance with a programme, which in our opinion, is reasonable having regard to the size and nature of its assets. According to the information and explanations given to us material discrepancies identified on such verification when compared with available records have been properly dealt within the books of account.
(c) According to the information and explanations given to us and as per verification of the records of the Company, the title deeds of the immovable properties included in the property plant and equipment are held in the name of the Company. As stated in note no. 4.1.3, 4.1.4, 5.1.2 to 5.1.4 of the standalone financial statements, the immovable properties are mortgaged for availing credit facilities from banks and financial institution.
(ii) According to the information and explanation given to us and as per our verification of the records of the Company, the management has conducted physical verification of inventory at reasonable intervals during the year and the discrepancies of material nature noticed on physical verification, by the management, have been properly dealt with in the books of account during the year.
(iii) According to the information and explanations given to us, the Company has not granted loans, secured or unsecured, to companies, firms, limited liability partnerships, or other parties covered in the register maintained under section 189 of the Act, except to the extent of '' 108.86 million loan given to a body corporate (wholly owned foreign subsidiary) in respect of which '' 108.53 million has been repaid by such body corporate during the year as mentioned in Note no. 23.17(a) of the standalone financial statements. Based on our verification of books and records of the Company, in our opinion, the terms and conditions of such loan are not prejudicial to the interest of the Company. Since there are no repayment terms agreed upon with the borrower, we have not commented upon the regularity of the repayment of principal and interest and as a result there are no amounts overdue as on 31st March 2017.
to us and as per our verification of the records of the Company, the following disputed amounts of tax/ duty have not been deposited with appropriate authorities as at 31st March 2017:
Name of the Statute |
Nature of the dues |
Amount (Rs, in millions) |
Period (financial year) to which the amount relates to |
Forum where dispute is pending |
Maharashtra VAT Act, 2002 # |
Value Added Tax |
31.65* |
2006-07 |
Joint Commissioner of Sales Tax (Appeals) |
Central Sales Tax Act,1956 # |
Central Sales Tax |
2.10* |
2006-07 |
Joint Commissioner of Sales Tax (Appeals) |
Maharashtra VAT Act, 2002 # |
Value Added Tax |
31.09* |
2008-09 |
Deputy Commissioner of Sales Tax(Appeals) |
Maharashtra VAT Act, 2002 # |
Value Added Tax |
24.78* |
2009-10 |
Joint Commissioner of Sales Tax (Appeals) |
Central Sales Tax Act,1956 # |
Central Sales Tax |
3.89* |
2009-10 |
Joint Commissioner of Sales Tax (Appeals) |
Income Tax Act,1961 |
Income Tax |
4.52** |
2009-10 (AY 2010-11) |
Commissioner of Income Tax (Appeals) |
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of the section 185 and 186 of the Act in respect of the investments made, loans granted, guarantees given and securities provided by the Company.
(v) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder, applicable to the Company. According to the information and explanations given to us, in respect of such deposits there are no directives issued by the Reserve Bank of India which requires to be complied with by the Company.
(vi) We have broadly reviewed the books of account and records maintained by the Company pursuant to the Rules made by the Central Government, for the maintenance of cost records under Section 148(1) of the Companies Act, 2013 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 determining whether they are accurate or complete.
(vii) (a) According to the information and explanations given
to us and as per our verification of the records of the Company, the Company has been fairly regular in depositing undisputed statutory dues including Provident fund, Employee''s State Insurance, Income Tax, Sales Tax, Custom Duty, Excise Duty, Service Tax, Value Added Tax, Cess and other statutory dues with the appropriate authorities during the year to the extent applicable. There are no arrears of undisputed statutory dues of a material nature outstanding as at the last day of the financial year for a period of more than six months from the date on which they became payable.
(b) According to the information and explanations given (The above does not include demands in relation to General Lighting business which was sold by the Transferor Company on August 30, 2013 and any statutory liabilities relating to such business will be borne by buyer, in accordance with the Business Transfer signed by the Transferor Company and the buyer.)
Name of the Statute |
Nature of the dues |
Amount (Rs, in millions) |
Period (financial year) to which the amount relates to |
Forum where dispute is pending |
Income Tax Act,1961 |
Income Tax |
3.24 |
2010-11 (AY 2011-12) |
Commissioner of Income Tax (Appeals) |
Income Tax Act,1961 |
Income Tax |
2.19 |
2012-13 (AY 2013-14) |
Dispute Resolution Panel |
Finance Act, 1994 |
Service Tax |
0.11 |
2015-16 |
Customs Excise & Service tax Appellate Tribunal |
Central Sales Tax Act, 1956 |
Pending C Forms |
0.23 |
FY 2006-07 & 2008-09 |
Deputy Commissioner of Assessment, Uttarakhand |
Delhi Sales Tax Act, 1975 |
Sales tax demand |
0.08 |
FY 1994-95 |
D.C. Appeal IV, Delhi |
Finance Act, 1994 |
Penalty against service tax demand |
0.04 |
FY 2008-09 & 2012-13 |
Superintendent, Service Tax Range-XVII, Division-IV, Noida |
Finance Act, 1994 |
Penalty against service tax demand |
1.03 |
FY 2009-10 & 2010-11 |
CESTAT, New Delhi |
Total |
104.95 |
* includes Rs, 3.60 million paid under protest in respect of such demand.
** Rs, 4.52 million adjusted against earlier year''s refund.
# a stay order has been received against the amount disputed and not deposited.
(viii) According to the information and explanations given to us and as per our verification of the records of the Company, the Company has not defaulted in repayment of its dues to the banks and financial institution. The Company did not have any outstanding debentures and loan from government during the year end.
(ix) According to the information and explanation given to us and as per our verification of records of the Company, the Company has not raised money by way of initial public offer or further public offer (including debt instrument) during the year.
According to the information and explanations given to us and as per our verification of the records of the Company, the Company has utilized the monies raised by way of term loans for the purposes for which those were raised.
(x) According to the information and explanations given to us and as per our verification of records of the Company, no material fraud either by the Company or on the Company by its officers and employees has been noticed or reported during the year.
(xi) According to the information and explanations given to us and as per our verification of records of the Company, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of the Section 197 read with Schedule V of the Act.
(xii) In our opinion and according to the information given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable and hence not commented upon.
(xiii) According to the information and explanations given to us and as per our verification of records of the Company, transactions with the related parties are in compliance with the sections 177 and 188 of the Act and details of such transactions have been disclosed in the standalone financial statements as required by the applicable Accounting Standards.
(xiv) According to the information and explanations given to us and as per our verification of records of the Company, the Company has not made preferential allotment or private placement of shares or fully or partly convertible debentures during the year. The Company had raised the funds from private placement during the previous year and as explained by the management in Note no 2.1.3(a) to the standalone financial statements and as per our verification of records of the Company, amounts raised during the previous year that were pending utilization as at the end of the previous year, prima facie, have been utilized for the purpose for which funds were raised.
(xv) According to the information and explanations given to us and as per our verification of records of the Company, the Company has not entered into non-cash transactions with the directors or persons connected with the directors. Accordingly, paragraph 3 (xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
We have audited the internal financial controls over financial reporting of Suprajit Engineering Limited (âthe Company") as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures, on test check basis, 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 March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
For VARMA & VARMA
Chartered Accountants
FRN 004532S
R KESAVADAS
Place: Bengaluru Partner
Date : September 13, 2017 M. No. 23862
Mar 31, 2016
To
The Members of SUPRAJIT ENGINEERING LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Suprajit Engineering Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, the Profit and Loss Statement 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 the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial control, 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.
Auditors'' 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 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 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 (read together with significant accounting policies and other explanatory information attached thereto) 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 profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (''the Order''") issued by the Central Government of India in terms of section 143(11) of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the ''Annexure A'' a statement on the matters specified in the paragraph 3 and 4 of the said Order, to the extent applicable
2. As required by Section 143 (3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. The Balance Sheet, the Profit and Loss Statement, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e. On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164
(2) of the Act.
f. With respect to the adequacy of the internal financials controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in ''Annexure B''; and
g. With respect to the other matters to be included in the Auditor''s report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. the Company has pending litigations disclosed as contingent liabilities in its Note No.23.6.1 to the financial statements, the impact if any on the final settlement of these litigations is not ascertainable at this stage;
ii. the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses; and
iii. there were no delays in transferring undisputed amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year.
(i) (a) As stated in Note No. 23.4, the full quantitative
ANNEXURE A TO THE INDEPENDENT AUDITOR''S REPORT ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING ''REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS'' OF OUR INDEPENDENT AUDIT REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF SUPRAJIT ENGINEERING LIMITED FOR THE YEAR ENDED 31ST MARCH 2016
particulars giving item wise/ location wise details of fixed assets are maintained in the ERP system in respect of additions made after 1.4.2008. The particulars of fixed assets acquired prior to this date have been updated in the ERP system in a summarized format. However, item wise particulars are available for major assets in manual form.
(b) We are informed by the management that most of the fixed assets of the Company are being physically verified in accordance with a programme, which in our opinion, is reasonable having regard to the size and nature of its assets. According to the information and explanations given to us material discrepancies identified on such verification when compared with available records have been properly dealt with in the books of account.
(c) According to the information and explanations given to us and as per verification of the records of the Company, the title deeds of the immovable properties are held in the name of the Company. As stated in note no. 4.1.3 and 5.1.2 of the financial statements, the immovable properties are mortgaged for availing credit facilities from banks / financial institution.
(ii) We are informed by the management that the inventory of raw materials, stores and spares, work-in-progress and finished goods in the custody of the Company are physically verified by the management on a quarterly basis as per a programme of perpetual inventory, the frequency of which, in our opinion is reasonable, having regard to the size of the Company and the nature of its business and the discrepancies of material nature noticed on physical verification, by the management, have been properly dealt with in the books of account during the year.
(b) According to the information and explanations given to us and as per our verification of the records of the Company, the following disputed amounts of tax/ duty have not been deposited with appropriate authorities as at 31st March 2016:
Name of the Statute |
Nature of the dues |
Amount (Rs.) |
Period (financial year) to which the amount relates to |
Forum where dispute is pending |
Maharashtra VAT Act, 2002 # |
Value Added Tax |
31,148,407* |
2006-07 |
Joint Commissioner of Sales Tax (Appeals) |
Central Sales Tax Act,1956 # |
Central Sales Tax |
1,802,062* |
2006-07 |
Joint Commissioner of Sales Tax (Appeals) |
Maharashtra VAT Act, 2002 # |
Value Added Tax |
29,085,990* |
2008-09 |
Deputy Commissioner of Sales Tax(Appeals) |
Maharashtra VAT Act, 2002 # |
Value Added Tax |
24,474,972* |
2009-10 |
Joint Commissioner of Sales Tax (Appeals) |
Central Sales Tax Act,1956 # |
Central Sales Tax |
3,392,210* |
2009-10 |
Joint Commissioner of Sales Tax (Appeals) |
Income Tax Act,1961 |
Income Tax |
4,515,160 |
2009-10 (AY 2010-11) |
Commissioner of Income Tax (Appeals) |
Income Tax Act,1961 |
Income Tax |
3,240,000 |
2010-11 (AY 2011-12) |
Commissioner of Income Tax (Appeals) |
Finance Act, 1994 |
Service Tax |
432,920 |
2009-10 |
Customs Excise & Service tax Appellate Tribunal |
Total |
98,091,721 |
(iii) According to the information and explanations given to us,
the Company had not granted loans, secured or unsecured, H cu to companies, firms limited liability partnerships, or other parties covered in the register maintained under section 189 of the
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of the section 185 and 186 of the Act in respect of the investment made and guarantees given by the Company.
(v) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under, applicable to the Company. According to the information and explanations given to us, in respect of such deposits there are no directives issued by the Reserve Bank of India which requires to be complied with by the Company.
(vi) We have broadly reviewed the books of account and records maintained by the Company pursuant to the Rules made by the Central Government, for the maintenance of cost records under Section 148(1) of the Companies Act,
2013 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 determining whether they are accurate or complete.
(vii) (a) According to the information and explanations given
to us and as per our verification of the records of the Company, the Company has been fairly regular in depositing undisputed statutory dues including Provident fund, Employee''s State Insurance, Income Tax, Sales Tax, Custom Duty, Excise Duty, Service Tax, Cess, dues to Investor Education and Protection Fund and other statutory dues with the appropriate authorities during the year to the extent applicable.
There are no arrears of undisputed statutory dues of a material nature outstanding as at the last day of the financial year for a period of more than six months from the date on which they became payable.
(viii) According to the information and explanations given to us and as per our verification of the records of the Company, the Company has not defaulted in repayment of its dues to the financial institutions and banks.
(ix) According to the information and explanation given to us and as per our verification of records of the Company, the Company has not raised money by way of initial public offer or further public offer (including debt instrument) during the year.
According to the information and explanations given to us and as per our verification of the records of the Company, it has availed a term loan of Rs. 100 Crores during the year for the purpose of financing the acquisition of shares in the subsidiary through public offer and annual capital expenditure. The Company has repaid Rs. 60 Crores of the term loan, leaving an unutilized balance of Rs. 40 Crores. The Company had a similar unutilized loan amount of Rs. 17.44 Crores brought forward from the previous year making the total unutilized loan amount to Rs. 57.44 Crores. Out of this, the Company has incurred Rs. 37.75 Crores towards capital expenditure, which is prima facie, applied for the purposes for which the loan was obtained. The balance of Rs. 19.69 Crores, as informed by the management of the Company, is proposed for utilization towards capital projects under progress.
(x) According to the information and explanations given to us and as per our verification of records of the Company, no material fraud either by the Company or on the Company by its officers and employees has been noticed or reported during the year.
(xi) According to the information and explanations given to us and as per our verification of records of the Company, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of the Section 197 read with Schedule V of the Act.
(xii) In our opinion and according to the information given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and as per our verification of records of the Company, transactions with the related parties are in compliance with the sections 177 and 188 of the Act and details of such transactions have been disclosed in the standalone financial statements as required by Accounting Standard 18 - Related Party Transactions.
(xiv) According to the information and explanations given to us and as per our verification of records of the Company, the Company has issued shares to the Qualified Institutional Buyers on a private placement basis on February 23, 2016 and requirement of the section 42 of the Act have been complied with. The Company had raised the funds from the private placement for the purpose of optimizing the mix of debt and equity to meet its needs of the growing business and it has partially utilized the funds in repayment of loans availed and the balance of Rs. 100 Crores have been temporarily invested in current investments, pending utilization for the above mentioned purpose, as informed to us by the management of the Company.
(xv) According to the information and explanations given to us and as per our verification of records of the Company, the Company has not entered into non-cash transactions with the directors or persons connected with the directors. Accordingly, paragraph 3 (xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
We have audited the internal financial controls over financial reporting of Suprajit Engineering Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
ANNEXURE B TO THE INDEPENDENT AUDITOR''S REPORT ANNEXURE REFERRED TO IN PARA 2 (F) "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF THE INDEPENDENT AUDITOR''S REPORT OF REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 ("THE ACT")
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures, on test check basis, 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 authorisations 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 March 31, 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 Institute of Chartered Accountants of India.
For VARMA & VARMA
Chartered Accountants FRN 004532S
R KESAVADAS
Place: Bengaluru Partner
Date : 30,h May, 2016 M. No. 23862
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Suprajit Engineering Limited ('the Company'), which comprise the
Balance Sheet as at 31st March, 2015, the Profit and Loss Statement and
the Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other notes on financial
statements.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters 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 the maintenance of adequate
accounting records in accordance with the provision of the Act for
safeguarding of the assets of the Company and for preventing and
detecting the frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and design, implementation
and maintenance of internal financial control, 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.
Auditors' 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 judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of 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
read together with significant accounting policies and other notes on
financial statements attached thereto, 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, 2015, and its
profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ('the
Order') issued by the Central Government of India in terms of section
143(11) of the Act, we give in the Annexure a statement on the matters
specified in the paragraph 3 and 4 of the said Order, to the extent
Applicable.
2. As required by Section 143 (3) of the Act, we report that:
a. We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books.
c. The Balance Sheet, the Profit and Loss Statement, and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
accounts.
d. In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
f. With respect to the other matters to be included in the Auditor's
report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us :
i. the Company has pending litigations disclosed as contingent
liabilities in its Note No.23.6.1 to the financial statements, the
impact if any on the final settlement of these litigations is not
ascertainable at this stage;
ii. the Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses; and
iii. there were no delays in transferring undisputed amounts which
were required to be transferred to the Investor Education and
Protection Fund by the Company during the year.
ANNEXURE TO INDEPENDENT AUDITORS' REPORT
ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING 'REPORT ON OTHER
LEGAL AND REGULATORY REQUIREMENTS' OF OUR INDEPENDENT AUDIT REPORT OF
EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF SUPRAJIT
ENGINEERING LIMITED FOR THE YEAR ENDED 31st MARCH 2015
(i) (a) As stated in Note No. 23.4, the full quantitative particulars
giving item wise/ location wise details of fixed assets are maintained
in the ERP system in respect of additions made after 1.4.2008. The
particulars of fixed assets acquired prior to this date have been
updated in the ERP system in a summarised format. However, item wise
particulars are available for major assets in manual form.
(b) We are informed by the management that most of the fixed assets of
the Company are being physically verified in accordance with a
programme which however requires to be streamlined. According to the
information and explanations given to us no material discrepancies were
identified on such verification when compared with available records.
(ii) (a) We are informed that the inventory of raw materials, stores and
spares, work-in-progress and finished goods in the custody of the
Company are physically verified by the management on a quarterly basis
as per a programme of perpetual inventory, the frequency of which, in
our opinion is reasonable, having regard to the size of the Company and
the nature of its business;
(b) In our opinion and according to the explanations given to us, the
procedures of physical verification of inventory followed by the
management are fairly reasonable and adequate in relation to the size
of the Company and the nature of its business;
(c) The Company is maintaining proper records of inventory and as
informed to us, discrepancies of material nature noticed on physical
verification, by the management, have been properly dealt with in the
books of account during the year.
(iii) According to the information and explanations given to us, the
Company had not granted loans, secured or unsecured, to companies,
firms or other parties covered in the register maintained under section
189 of the Companies Act 2013.
(iv) In our opinion and according to the information and explanations
given to us, there are fairly adequate internal control systems
commensurate with the size of the Company and nature of its business
for the purchase of inventory and fixed assets and for the sale of
goods and services. We have not noted any continuing failure to correct
major weaknesses in internal control systems, subject to Auditor's
Responsibility paragraph mentioned in the Independent Auditor's Report
above.
(v) The Company has complied with the directives issued by the Reserve
Bank of India and the provisions of sections 73 to 76 or any other
relevant provisions of the Companies Act, 2013 and the rules framed
thereunder, applicable to the Company.
(vi) We have broadly reviewed the books of account and records
maintained by the Company relating to the manufacture of auto
components, for the maintenance of cost records under Section 148(1) of
the Companies Act, 2013 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 determining whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and
as per our verification of the records of the Company, the Company has
been fairly regular in depositing undisputed statutory dues including
Provident fund, Employee's State Insurance, Income Tax, Sales Tax,
Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess, Investor
Education and Protection Fund and other statutory dues with the
appropriate authorities during the year to the extent applicable. There
are no arrears of undisputed statutory dues of a material nature
outstanding as at the last day of the financial year for a period of
more than six months from the date on which they became payable.
(b) According to the information and explanations given to us and as
per our verification of the records of the Company, the following
disputed amounts of tax/ duty have not been deposited with appropriate
authorities as at 31st March 2015:
Nameof the Nature the Amount
Statute dues (Rs.)
Maharashtra VAT Act, 2002 # Value Added Tax 31,148,407*
central sales Tax Act,1956 # Central Sales Tax 1,802,062*
maharastra VAT Act, 2002 # Value Added Tax 29,085,990*
maharastra VAT Act, 2002 # Value Added Tax 24,474,972*
central sales Tax Act,1956 # Central Sales Tax 3,392,210*
Income tax Act,1961 Income Tax 4,515,160
Finance Act, 1994 Service Tax 432,920
Period (financial
Nameof the year) to which the Forum where dispute
Statute amount relates to is pending
Maharashtra VAT Joint Commissioner of
Act, 2002 # 2006-07 Sales Tax (Appeals)
central sales Tax oint Commissioner of
Act,1956 # 2006-07 Sales Tax (Appeals)
maharastra VAT Deputy Commissioner of
Act, 2002 # 2008-09 Sales Tax(Appeals)
maharastra VAT Joint Commissioner of
Act, 2002 # 2009-10 Sales Tax (Appeals)
central sales Tax Joint Commissioner of
Act,1956 # 2009-10 Sales Tax (Appeals)
Income tax 2009-10 Commissioner of
Act,1961 (AY 2010-11) Income Tax (Appeals)
Finance Act, 1994 2009-10 costom Excies & Service tax
Appellate Tribunal
* net of Rs. 3,600,000/- paid under protest.
# a stay order has been received against the amount disputed and not
deposited.
(c) According to the information and explanations given to us, the
amounts which were required to be transferred to the Investor Education
and Protection Fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules there under has been
transferred to such fund within time.
(viii) There are no accumulated losses at the end of the financial
year. The Company has also not incurred cash losses in the financial
year and in the immediately preceding financial year.
(ix) According to the information and explanations given to us and as
per our verification of the records of the Company, the Company has not
defaulted in repayment of its dues to the financial institutions and
banks.
(x) According to the information and explanations given to us, the
terms and conditions of the guarantee given by the Company for loan
taken by the subsidiary company from its banker, are not prima facie
prejudicial to the interest of the Company.
(xi) According to the information and explanations given to us, and as
per our verification of the records of the Company, it has availed a
term loan in respect of capital projects under progress of RS. 50 crores
during the year out of which as at 31st March 2015 RS. 32.56 crores
were, prima facie, utilised by the Company for the purposes for which
the loan was obtained and the balance of RS. 17.44 crores, as informed
by the management of the Company, will be utilised towards the capital
projects under progress.
(xii) According to the information and explanations given to us and the
records of the Company examined by us, no material fraud either on or by
the Company has been noticed or reported during the year.
For VARMA & VARMA
Chartered Accountants
FRN004532S
R KESAVADAS
Place: Bangalore Partner
Date : 29.05.2015 M. No. 23862
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Suprajit
Engineering Limited ("the Company"), which comprise the Balance Sheet
as at 31st March, 2013, and the Profit and Loss Statement 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 in accordance with the Accounting Standards
referred to in sub-section (3C) of section 211 of the Companies Act,
1956 ("the Act"). This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the 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 31st, 2013;
b. In the case of the Profit and Loss Statement, of the profit for the
year ended on that date; and
c. In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 issued
by the Central Government of India in terms of Section 227 (4A) of the
Act, we enclose in the Annexure a statement on the matters specified in
Paragraphs 4 and 5 of the said 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, Profit and Loss Statement, and 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 Statement, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Act;
e. on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER
LEGAL AND REGULATORY REQUIREMENTS" OF OUR INDEPENDENT AUDIT REPORT OF
EVEN DATE ON THE FINANCIAL STATEMENTS OF SUPRAJIT ENGINEERING LIMITED
FOR THE YEAR ENDED 31st MARCH 2013
1. (a) As stated in Note No. 21.4, the full quantitative particulars
giving item wise/location wise details of fixed assets are maintained
in the ERP system in respect of additions made after 1.4.2008. The
particulars of fixed assets acquired prior to this date have been
updated in the ERP system in a summarized format. However, item wise
particulars are available for major assets in manual form.
(b) We are informed by the management that most of the fixed assets of
the Company are being physically verified in accordance with a
programme. According to the information and explanations given to us no
material discrepancies were identified on such verification when
compared with available records.
(c) The Company has not disposed off substantial part of fixed assets
during the year.
2. (a) We are informed that the inventory of raw materials, stores and
spares in the custody of the Company are physically verified by the
management on a continuing basis as per a programme of perpetual
inventory and inventories of other items have been physically verified
at the year-end, the frequency of which, in our opinion is reasonable,
having regard to the size of the Company and the nature of its
business;
(b) In our opinion and according to the explanations given to us, the
procedures of physical verification of inventory followed by the
management are fairly reasonable and adequate in relation to the size
of the Company and the nature of its business;
(c) The Company is maintaining proper records of inventory and as
informed to us, discrepancies of material nature noticed on physical
verification, by the management, have been adequately adjusted in the
books of account during the year.
3. According to the information and explanations given to us, the
Company had not granted or taken loans, secured or unsecured, to/ from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act 1956 except the fixed deposits
accepted from relatives of directors in accordance with the fixed
deposit scheme of the Company, the terms and conditions of which are
prima facie not prejudicial to the interests of the Company and there
are no arrears of principal or interest due. The payment of principal
amount and interest in respect of such deposits are regular.
4. In our opinion and according to the information and explanations
given to us, there are fairly adequate internal control systems
commensurate with the size of the Company and nature of its business
for the purchase of inventory and fixed assets and for the sale of
goods and services. We have not noted any continuing failure to correct
major weaknesses in internal control systems.
5. According to the information and explanations given to us, all
transactions which require to be entered in a register maintained
pursuant to Section 301 of the Companies Act, 1956 have been so
entered. Where each such transaction is in excess of Rs. 5 lakhs in
respect of any party, they have been made at cost/ negotiated prices
and they either compare favourably with market prices or there are no
comparable prices.
6. The Company has accepted deposits from the public and the
provisions of sections 58A and 58AA of the Companies Act, 1956 and the
rules framed there under have been complied with.
7. In our opinion, the Company has a fairly adequate internal audit
system commensurate with the size of the Company and the nature of its
business.
8. We have broadly reviewed the books of account and records
maintained by the Company relating to the manufacture of auto
components, pursuant to the order 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 maintained. We have, however,
not made a detailed examination of the records with a view to
determining whether they are accurate or complete.
9. (a) According to the information and explanations given to us and
as per our verification of the records of the Company, the Company has
been fairly regular in depositing undisputed statutory dues including
Provident fund, Employee''s State Insurance, Income Tax, Sales Tax,
Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other
statutory dues with the appropriate authorities during the year to the
extent applicable. There are no arrears of undisputed statutory dues
of a material nature outstanding for a period of more than six months
from the date on which they became payable.
(b) According to the information and explanations given to us and as
per our verification of the records of the Company, the following
disputed amounts of tax/duty have not been deposited with appropriate
authorities as at 31st March 2013:
Amount Period to
which the Forum where
Name of the
Statute Nature of
the dues (Rs. in
lakhs) amount relates dispute is pending
Karnataka
Value Added
Tax Act, Joint Commissioner
of Commercial
Value Added
Tax 131.59 FY 2010-11
2003 Taxes (Appeals)
FY 2001-02
Income Tax
Act 1961 Income Tax 2.00 Hon''ble Karnataka
High Court
(AY 2002-03)
10. There are no accumulated losses at the end of the financial year.
The Company has also not incurred cash losses during the year and in
the immediately preceding financial year.
11. According to the information and explanations given to us and as
per our verification of the records of the Company, the Company has not
defaulted in repayment of dues to the financial institutions and banks.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. Since the Company is not a chit fund/nidhi/mutual benefit
fund/society, the relative reporting requirements are not applicable.
14. Since the Company is not dealing or trading in shares, securities,
debentures or other investments, the relative reporting requirements
are not applicable.
15. According to the information and explanations given to us, the
terms and conditions of the guarantees given by the Company for loans
taken by the subsidiaries from bank, are not prima facie prejudicial to
the interests of the Company.
16. According to the information and explanations given to us, in our
opinion, term loans availed by the Company were, prima facie, applied
by the Company during the year for the purposes for which the loans
were obtained.
17. According to the information and explanations given to us and as
per our verification of the records of the Company, on an overall
basis, at the year end, the Company has not utilized funds raised on
short-term basis for long term purposes.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Act.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by public issues during the
year.
21. According to the information and explanations given to us and as
per our verification of the records of the Company, no material fraud
either on or by the Company has been noticed or reported during the
year.
For VARMA & VARMA
Chartered Accountants
FRN004532S
R KESAVADAS
Place : Bangalore Partner
Date : 25th May, 2013 M. No. 23862
Mar 31, 2012
We have audited the attached Balance Sheet of SUPRAJIT ENGINEERING
LIMITED as at 31st March 2012, the Profit and Loss Statement for the
year ended on that date 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.
We conducted our audit in accordance with auditing standards generally
accepted in India. These Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the Financial
Statements are free of material misstatement. An audit includes,
examining on a test basis, evidence supporting the amounts and
disclosures in the Financial Statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall Financial Statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
I. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in Paragraphs 4 and 5 of the said Order;
II. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, Profit and Loss Statement and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Profit and Loss Statement and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Sub-Section (3C) of Section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from the Directors
and taken on record by the Board of Directors, we report that none of
the Director of the Company is 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;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
significant accounting policies and notes on accounts attached thereto,
give the information required by the Companies Act, 1956, in the manner
so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2012;
b) in the case of the Profit and Loss Statement, of the Profit for the
year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash fows of the
Company for the year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH I OF OUR AUDIT REPORT OF EVEN DATE ON
THE ACCOUNTS OF SUPRAJIT ENGINEERING LIMITED FOR THE YEAR ENDED 31ST
MARCH 2012
1. (a) As stated in Note No. 21.4, the full quantitative particulars
giving item wise/location wise details of fixed assets are maintained in
the ERP system in respect of additions made after 1.4.2008. The
particulars of fixed assets acquired prior to this date have been
updated in the ERP system in a summarized format. However, item wise
particulars are available for major assets in manual form.
(b) We are informed by the management that most of the fixed assets of
the Company are being physically verified in accordance with a
programme. According to the information and explanations given to us no
material discrepancies were identified on such verification when compared
with available records.
(c) The Company has not disposed of substantial part of fixed assets
during the year.
2. (a) We are informed that the inventory of raw materials, stores and
spares in the custody of the Company are physically verified by the
management on a continuing basis as per a programme of perpetual
inventory and inventories of other items have been physically verified
at the year-end, the frequency of which, in our opinion is reasonable,
having regard to the size of the Company and the nature of its
business;
(b) In our opinion and according to the explanations given to us, the
procedures of physical verification of inventory followed by the
management are fairly reasonable and adequate in relation to the size
of the Company and the nature of its business;
(c) The Company is maintaining proper records of inventory and as
informed to us, discrepancies of material nature noticed on physical
verification, by the management, have been adequately adjusted in the
books of account during the year.
3. According to the information and explanations given to us, the
Company had not granted or taken loans, secured or unsecured, to/ from
companies, frms or other parties covered in the register maintained
under Section 301 of the Companies Act,1956, except the fixed deposits
accepted from relatives of Directors in accordance with the fixed
deposit scheme of the Company, the terms and conditions of which are
prima facie not prejudicial to the interests of the Company and there
are no arrears of principal or interest due. The payment of principal
amount and interest in respect of such deposits are regular.
4. In our opinion and according to the information and explanations
given to us, there are fairly adequate internal control system
commensurate with the size of the Company and nature of its business
for the purchase of inventory and fixed assets and for the sale of goods
and services. We have not noted any continuing failure to correct
major weaknesses in internal control systems.
5. According to the information and explanations given to us, all
transactions which require to be entered in a register maintained
pursuant to Section 301 of the Companies Act, 1956, have been so
entered. Where each such transaction is in excess of Rs. 5 lakhs in
respect of any party, they have been made at cost/ negotiated prices
and they either compare favourably with market prices or there are no
comparable prices.
6. The Company has accepted deposits from the public and the
provisions of Sections 58A and 58AA of the Companies Act, 1956 and the
rules framed there under have been complied with.
7. In our opinion, the Company has a fairly adequate internal audit
system commensurate with the size of the Company and the nature of its
business.
8. We have broadly reviewed the books of account and records
maintained by the Company relating to the manufacture of auto
components, pursuant to the order 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 maintained. We have, however,
not made a detailed examination of the records with a view to
determining whether they are accurate or complete.
9. (a) According to the information and explanations given to us and
as per our verification of the records of the Company, the Company has
been fairly regular in depositing undisputed statutory dues including
Provident Fund, Employee's State Insurance, Income Tax, Sales Tax,
Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess, except for Rs.
88,698/- of Investor Education and Protection Fund paid after a delay
of 58 days and other statutory dues with the appropriate authorities
during the year to the extent applicable. There are no arrears of
undisputed statutory dues of a material nature outstanding for a period
of more than six months from the date on which they became payable.
(b) According to the information and explanations given to us and as
per our verification of the records of the Company, the following
disputed amounts of tax/duty have not been deposited with appropriate
authorities as at 31st March 2012:
Name of the Nature of Amount Period to Forum where
Statute the dues which the dispute is
(Rs.) amount pending
relates
Income Tax Act, Income Tax 451,715 FY 2008-09 Commissioner
1961 (AY 2009-10) of Income Tax
(Appeals)
10. There are no accumulated losses at the end of the financial year.
The Company has also not incurred cash losses during the year and in
the immediately preceding financial year.
11. According to the information and explanations given to us and as
per our verification of the records of the Company, the Company has not
defaulted in repayment of dues to the financial institutions and banks.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of Shares, Debentures and other securities.
13. Since the Company is not a chit fund/nidhi/mutual benefit
fund/society, the relative reporting requirements are not applicable.
14. Since the Company is not dealing or trading in Shares, Securities,
Debentures or other Investments, the relative reporting requirements
are not applicable.
15. According to the information and explanations given to us, the
terms and conditions of the guarantees given by the Company for loans
taken by the subsidiaries from bank, are not prima facie prejudicial to
the interests of the Company.
16. According to the information and explanations given to us, in our
opinion, term loans availed by the Company were, prima facie, applied
by the Company during the year for the purposes for which the loans
were obtained.
17. According to the information and explanations given to us and as
per our verification of the records of the Company, on an overall basis,
at the year end, the Company has not utilized funds raised on
short-term basis for long term purposes.
18. The Company has not made any preferential allotment of Shares to
parties and companies covered in the Register maintained under Section
301 of the Act.
19. The Company has not issued any Debentures during the year.
20. The Company has not raised any money by public issues during the
year.
21. According to the information and explanations given to us and as
per our verification of the records of the Company, no material fraud
either on or by the Company has been noticed or reported during the
year.
For Varma & Varma
Chartered Accountants
FRN 004532S
R Kesavadas
Place : Bangalore Partner
Date : 29th May, 2012 M. No. 23862
Mar 31, 2011
We have audited the attached Balance Sheet of SUPRAJIT ENGINEERING
LIMITED as at 31 st March 2011, the Profit and Loss Account for the
year ended on that date and the Cash Flow Statement for the year ended
on that date annexed thereto.These Financial Statements are the
responsibility of the Companys management. Our responsibility is to
express an opinion on these Financial Statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. These Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the Financial
Statements are free of material misstatement. An audit includes,
examining on a test basis, evidence supporting the amounts and
disclosures in the Financial Statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditors Report) Order, 2003 issued by
the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in Paragraphs 4 and 5 of the said Order;
Further to our comments in the Annexure referred to above, we report
that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books;
iii.The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956.
v. On the basis of written representations received from the directors
and taken on record by the Board of Directors, we report that none of
the director of the company is disqualified as on 31 st 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;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
significant accounting policies and notes on accounts attached thereto,
give the information required by the Companies Act, 1956, in the manner
so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March 2011;
(b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
company for the year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH I OF OUR AUDIT REPORT OF EVEN DATE ON
THE ACCOUNTS OF SUPRAJIT ENGINEERING LIMITED FOR THE YEAR ENDED 31st
MARCH 2011
1. (a) As stated in Note No. 11(8) of Schedule 20, the full
quantitative particulars giving item wise/location wise details of
fixed assets are maintained in the ERP system in respect of additions
made after 1.4.2008.The particulars of fixed assets acquired prior to
this date have been updated in the ERP system in a summarized format.
However, item wise particulars are available for major assets in manual
form.
(b) We are informed by the management that most of the fixed assets of
the company are being physically verified in accordance with a
programme. According to the information and explanations given to us no
material discrepancies were identified on such verification when
compared with available records.
(c) The company has not disposed off substantial part of fixed assets
during the year.
2. (a) We are informed that the inventory of raw materials, stores and
spares in the custody of the company are physically verified by the
management on a continuing basis as per a programme of perpetual
inventory and inventories of other items have been physically verified
at the year-end, the frequency of which, in our opinion is reasonable,
having regard to the size of the company and the nature of its
business;
(b) In our opinion and according to the explanations given to us, the
procedures of physical verification of inventory followed by the
management are fairly reasonable and adequate in relation to the size
of the company and the nature of its business;
(c) The company is maintaining proper records of inventory and as
informed to us, discrepancies of material nature noticed on physical
verification, by the management, have been adequately adjusted in the
books of account during the year.
3. According to the information and explanations given to us, the
Company had not granted or taken loans, secured or unsecured, to/from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act 1956, except as under:
(a) The Company had granted loan to one such party in the previous
year. At the year-end, the outstanding balances of such loans granted
was Rs.Nil/- and the maximum amount involved during the year was Rs.
5,176,686/-, being the interest receivable on such loan.
(b) The rate of interest and other terms and conditions of such loans
are, in our opinion, prima facie not prejudicial to the interests of
the Company.
(c) In respect of this loan, there was no fixed repayment schedule.
(d) 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 except for fixed deposits
accepted from relatives of directors in accordance with the fixed
deposit scheme of the company, the terms and conditions of which are
prima facie not prejudicial to the interests of the company and there
are no arrears of principal or interest due. The payment of principal
amount and interest in respect of such deposits are regular.
4. In our opinion and according to the information and explanations
given to us, there are fairly adequate internal control system
commensurate with the size of the company and nature of its business
for the purchase of inventory and fixed assets and for the sale of
goods and services. We have not noted any continuing failure to correct
major weaknesses in internal control systems.
5. According to the information and explanations given to us, all
transactions which require to be entered in a register maintained
pursuant to Section 301 of the Companies Act, 1956 have been so
entered. Where each such transaction is in excess of Rs.5 lakhs in
respect of any party, they have been made at cost/negotiated prices and
they either compare favourably with market prices or there are no
comparable prices.
6. The company has accepted deposits from the public and the
provisions of sections 58A and 58AA of the Companies Act, 1956 and the
rules framed there under have been complied with.
7. In our opinion, the company has a fairly adequate internal audit
system commensurate with the size of the Company and the nature of its
business.
8. We have broadly reviewed the books of account and records
maintained by the Company relating to the manufacture of auto
components, pursuant to the order 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 maintained. We have,
however, not made a detailed examination of the records with a view to
determining whether they are accurate or complete.
9. (a) According to the information and explanations given to us and
as per our verification of the records of the company, the company has
been fairly regular in depositing undisputed statutory dues including
Provident fund, Employees State Insurance, Income Tax, Sales Tax,
Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess, Investor
Education and Protection Fund and other statutory dues with the
appropriate authorities during the year to the extent applicable. There
are no arrears of undisputed statutory dues of a material nature
outstanding for a period of more than six months from the date on which
they became payable.
(b) According to the information and explanations given to us and as
per our verification of the records of the company, the following
disputed amounts of tax/duty have not been deposited with
appropriate authorities as at 31 st March 2011:
Amount Period to which
the Forum where
dispute is
Name of the
statute Nature of
the dues
(Rs. in
tho
usands) amount relates pending
Central
Excise Act, Additional
Commissioner, LTU
Cenvat 1,434.04 2004-05
1944 Bangalore
10. There are no accumulated losses at the end of the financial year.
The company has also not incurred cash losses during the year and in
the immediately preceding financial year.
11. According to the information and explanations given to us and as
per our verification of the records of the company, the company has not
defaulted in repayment of dues to the financial institutions and banks.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. Since the Company is not a chit fund/nidhi/mutual benefit
fund/society, the relative reporting requirements are not applicable.
14. Since the Company is not dealing or trading in shares, securities,
debentures or other investments, the relative reporting requirements
are not applicable.
15. According to the information and explanations given to us, the
terms and conditions of the guarantees given by the Company for loans
taken by the subsidiaries from bank, are not prima facie prejudicial to
the interests of the Company.
16. According to the information and explanations given to us, in our
opinion, term loans availed by the Company were, prima facie, applied
by the Company during the year for the purposes for which the loans
were obtained.
17. According to the information and explanations given to us and as
per our verification of the records of the company, on an overall
basis, at the year end, the company has not utilized funds raised on
short-term basis for long term purposes.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Act.
19. The company has not issued any debentures during the year.
20. The company has not raised any money by public issues during the
year.
21. According to the information and explanations given to us and as
per our verification of the records of the company, no material fraud
either on or by the company has been noticed or reported during the
year.
ForVARMA&VARMA
Chartered Accountants
FRN 004532S
CHERIAN K BABY
Place: Bangalore Partner
Date :30th May 2011 M. No. 16043
Mar 31, 2010
We have audited the attached Balance Sheet of SUPRAJIT ENGINEERING
LIMITED as at 31st March, 2010, the Profit and Loss Account for the
year ended on that date and the Cash Flow Statement for the year ended
on that date annexed thereto. These financial statements are the
responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. These Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes,
examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditors Report) Order, 2003 issued by
the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in Paragraphs 4 and 5 of the said Order;
Further to our comments in the Annexure referred to above, we report
that:
(I) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion,the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 21 I of the
Companies Act, 1956;
(v) On the basis of written representations received from the Directors
and taken on record by the Board of Directors, we report that none of
the Director of the Company is disqualified as on 3 1st, March
2010,from being appointed as a director in terms of clause (g) of
sub-section (I) of Section 274 of the CompaniesAct, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
significant accounting policies and notes on accounts attached thereto,
give the information required by the Companies Act, 1956, in the manner
so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the
company as at 3 I st March, 2010;
b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
c) in the case of the Cash Flow statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH I OF OUR AUDIT REPORT OF EVEN DATE
ON THE ACCOUNTS OF SUPRAJIT ENGINEERING LIMITED FOR THE YEAR ENDED 31
ST MARCH 2010
1 (a) As stated in Note No. 11(8) of Schedule 20, the full quantitative
particulars giving item wise/location wise details of fixed assets are
maintained in the ERP system in respect of additions made after
1.4.2008. The fixed assets particulars prior to this period have been
updated in the ERP system in a summarized format and additional
particulars are maintained for major assets in manual form.
(b) We are informed by the management that most of the fixed assets of
the Company are being physically verified in accordance with a
programme.According to the information and explanations given to us no
material discrepancies were identified on such verification when
compared with available records.
(c) The Company has not disposed off substantial part of fixed assets
during the year.
2 (a) We are informed that the inventory of raw materials, stores and
spares in the custody of the company are physically verified by the
management on a continuing basis as per a programme of perpetual
inventory and inventories of other items have been physically verified
at the year-end, the frequency of which, in our opinion is reasonable,
having regard to the size of the company and the nature of its
business;
(b) In our opinion and according to the explanations given to us, the
procedures of physical verification of inventory followed by the
management are fairly reasonable and adequate in relation to the size
of the Company and the nature of its business;
(c) The Company is maintaining proper records of inventory and as
informed to us, discrepancies of material nature noticed on physical
verification, by the management, have been adequately adjusted in the
books of account during the year.
3. In respect of loans, secured or unsecured, granted or taken by the
Company to or from companies,firms or other parties covered in the
register maintained under Section 301 of the Companies Act 1956,
according to the information and explanations given to us:
(a) The Company had granted loan to one party in the current year apart
from the existing loan to one party.At the year-end, the outstanding
balances of such loans granted was Rs.Nil/- and the maximum amount
involved during the year was Rs.69,739,687/-
(b) The rate of interest and other terms and conditions of such loans
are, in our opinion, prima facie not prejudicial to the interests of
the Company.
(c) In respect of these loans there is no fixed repayment schedule.
(d) There are no overdue amounts of over Rs. I lakh remaining
outstanding at the year-end, as explained to us.
(e) 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 except for fixed deposits
accepted
from relatives of Directors in accordance with the fixed deposit scheme
of the company, the terms and conditions of which are prima facie not
prejudicial to the interests of the company and there are no arrears of
principal or interest due.
(f) There is no fixed repayment schedule in respect of loans granted,
the principal amount of the loan has been fully repaid during the year,
however interest aggregating to Rs. 5,176,686/- is outstanding as on
31.03.2010.
4. In our opinion and according to the information and explanations
given to us, there are fairly adequate internal control system
commensurate with the size of the company and nature of its business
for the purchase of inventory and fixed assets and for the sale of
goods and services.We have not noted any continuing failure to correct
major weaknesses in internal control systems.
5. According to the information and explanations given to us, all
transactions which require to be entered in a register maintained
pursuant to Section 301 of the Companies Act, 1956 have been so
entered. Where each of such transactions is in excess of Rs.5 lakhs in
respect of any party, they have been made at cost/negotiated prices and
they either compare favourably with market prices or there are no
comparable prices.
6. The Company has accepted deposits from the public in earlier years
and the provisions of Sections 58A and 58AA of the Companies Act, 1956
and the rules framed there under have been complied with.
7. In our opinion, the Company has a fairly adequate internal audit
system commensurate with the size of the Company and the nature of its
business.
8. We have broadly reviewed the books of account and records
maintained by the Company relating to the manufacture of auto
components, pursuant to the order made by the Central Government for
the maintenance of cost records under Section 209(l)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed accounts and records have been maintained. We have, however,
not made a detailed examination of the records with a view to
determining whether they are accurate or complete.
9 (a) According to the information and explanations given to us and as
per our verification of the record* of the Company, the Company has
been fairly regular in depositing undisputed statutory dues including
Provident fund, Employees State Insurance, Income Tax, Sales Tax,
Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess, Investor
Education and Protection Fund and other statutory dues with the
appropriate authorities during the year to the extent applicable.There
are no arrears of undisputed statutory dues of a material nature
outstanding for a period of more than six months from the date on which
they became payable.
(b) According to the information and explanations given to us and as
per our verification of the records of the Company, the following
disputed amounts of tax/duty have not been deposited with appropriate
authorities as at 3 I st March, 2010:
Name of the Nature of Amount Period to
which the Forum where dispute
statute the dues (Rs. in
thousands) amount
relates is pending
Central
Excise Cenvat 1,434.04 2004-05 Additional
Act, 1944 Commissioner
LTU
10. There are no accumulated losses at the end of the financial year.
The Company has also not incurred cash losses during the year and in
the immediately preceding financial year.
11. According to the information and explanations given to us and as
per our verification of the records of the Company, the Company has not
defaulted in repayment of dues to the financial institutions and banks.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. Since the Company is not a chit fund/nidhi/mutual benefit
fund/society, the relative reporting requirements are not applicable.
14. Since the Company is not dealing or trading in shares, securities,
debentures or other investments, the relative reporting requirements
are not applicable.
15. According to the information and explanations given to us, the
terms and conditions of the guarantees given by the Company for loans
taken by the subsidiaries from bank, are not prima facie prejudicial to
the interests of the Company.
16. According to the information and explanations given to us, in our
opinion, term loans availed by the Company were, prima facie, applied
by the Company during the year for the purposes for which the loans
were obtained, other than temporary deployment pending application.
17. According to the information and explanations given to us and as
per our verification of the records of the Company, on an overall
basis, at the year end, the Company has not utilized funds raised on
short-term basis for long term purposes.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Act.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by public issues during the
year.
21. According to the information and explanations given to us and as
per our verification ofthe records of the companyno material fraud
either on or by the Company has been notice or reported during the
year.
For Varma & Varma
Chartered Accountants
FRN 004532S
Cherian K Baby
Partner
M. No. 16043
Place:Bangalore
Date: 29th May, 2010
Mar 31, 2000
We have audited the attached Balance Sheet of SUPRAJIT ENGINEERING
LIMITED as at 31st March 2000 and aiso the Profit and Loss Account for
the year ended on that date annexed thereto and report that :
1. We have obtained ail the information and explanations which, to the
best of our knowledge and belief, were considered necessary for the
purpose of our audit.
2. In our opinion, proper books or account, as required by law have
been kept by the Company, so far as appears from our examination of the
books.
3. In our opinion the Profit and Loss Account and the Balance Sheet
Comply with the Accounting Standards referred to in sub section (3C)
of Section 211 of the Companies ACT, 1956.
4. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts subject to and I 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 ;
a. in the case of the Balance Sheet of the state of affairs of the ;
Company as at 31st March 2000, and
b. in the case of the Profit and Loss Account of the profit of the
Company for the year ended on that date.
As required by the Manufacturing and Other Companies (Auditors Report)
Order, 1988 issued by the Central Government in terms of Section 227
(4A) of the Companies Act, 1956, we further report that :
i) The Company has maintained proper records to show full particulars
including quantitative details and situation of fixed assets which were
physically verified by the management at reasonable intervals and no
material discrepancies were noticed on such verification.
ii) None of the fixed assets have been revalued during the year.
iii) The stocks of finished goods, stores, spare parts and raw
materials have been physically verified by the management at reasonable
intervals.
iv) In our opinion, the procedures for physical verification of stocks
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
v) No material discrepancies have been noticed on physical verification
of stocks as compared to book records.
vi) In our opinion, the valuation of stocks is fair and proper in
accordance with the normally accepted accounting principles and is on
the same basis as in the preceding year.
vii) According to the information and explanations given to us, the
Company has not, during the year, taken / granted any loans, secured or
j unsecured, from / to companies, firms or other parties listed in the
registers maintained under Section 301 of the Companies Act, 1956,
where the rate of interest / and other terms and conditions of such
loans are prima facie prejudicial to the interests of the Company. We
are informed that there are no Companies under the same management
within the meaning of Section 370(1B) of the Companies Act, 1956.
viii) Advances have been given oniy to the employees who are repaying
the principal amount as stipulated. No interest is charged on such
advances.
ix) In our opinion and according to the information and explanations
given to us, there is adequate internal control procedures commensurate
with the size of the Company and the nature of its business with regard
to purchase of stores, raw materials including components, plant and
machinery, equipment and other assets and for the sale of goods.
x) According to the information and explanations given to us, the
Company has not entered into any transaction of purchase of goods and
materials and sale of goods, materials and services, made in pursuance
of contracts or arrangements entered in the register maintained under
Section 301 of the Companies Act, 1956 and aggregating to Rs. 50,000 or
more during the year in respect of each party.
xi) According to the information and explanations given to us by the
management, the Company did not have any unserviceable or damaged
stores, raw materials or finished goods.
xii) The Company has not accepted any deposits from the public.
xiii) In our opinion, reasonable records have been maintained by the
Company for the sale and disposal of scrap. The Company has no
by-products.
xiv) The Company, in our opinion, has an internal audit-system
commensurate with the size and the nature of its business.
xv) We have been informed that the Central Government has not
prescribed maintenance of cost records under Section 209(1) (d) of the
Companies Act, 1956.
xvi) The Company has been generally regular in depositing Provident
Fund and Employees State Insurance dues with the appropriate
authorities.
xvii) No undisputed amount of taxes or duties were outstanding as on
31st March 2000, for a period of more than six months from the date
they become payable.
xviii) According to the information and explanations given to us, no
personal expenses of employees or directors have been charged to the
revenue account of the Company other than those payable under
contractual obligation, or in accordance with the generally accepted
business practice.
xix) The Company is not a Sick Industrial Company within the meaning
of Clause (O) of Sub-section (1) of Section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985.
for T.R. VARADARAJAN & ASSOCIATES
Chartered Accountants
Place: Bangalore T.R. VARADARAJAN
Date: 25th May 2000 Partner