TO THE MEMBERS OF ENVAIR ELECTRODYNE LIMITED
Report on the Financial Statements
We have audited the accompanying standalone financial statements of EnviarElectrodyne Limited ("the Company") which comprise the Balance Sheet as at31st March 2016 the Statement of Profit and Loss the Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement. An audit involves performingprocedures to obtain audit evidence about the amounts and the disclosures in the financialstatements. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the financial statements. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone financial statements.
Basis for qualified opinion
(a) Adequate provision for non recoverability has not been made for receivables andadvances remaining unrecovered and unconfirmed for a long period of time. Although themanagement has not ascertained this amount the same may extend to Rs. 72.68 lakhs. Hadthis provision been made the loss for the year would have been higher by this extent andconsequently Shareholder Funds would have been lower by the same amount.
(b) Provision for gratuity and leave encashment has been made on accrual basis insteadof on actuary valuation basis as is required by AS 15 and the required disclosures havealso not been made in the Notes to Accounts. The effect of the same has not beenascertained.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2016 and its Loss 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 issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act we give in theAnnexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books
(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 except as described in point (b) of the Basis for QualifiedOpinion paragraph above.
(e) The matter described in the Basis for Qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms of Section164 (2) of the Act;
(g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.
(h) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure B;
(i) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements - Refer Note 16 C (1 )(a) to the financialstatements;
il. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company
For M/s P.G.Bhagwat. [ FRN: 101118W]
Membership No. 83374
ANNEXURE A TO THE AUDITORS REPORT
(Referred to in our above report of even date)
(i) (a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;
(b) As explained to us concidering the nature of the Fixed Assets the same have beenphysically verified by the management at reasonable intervals during the year as per theverification plan adopted by the company which in our opinion is reasonable havingregard to the size of the company and the nature of its assets. According to theinformation and explanations given to us and the records produced to us for ourverification the discrepancies noticed during such physical verification were notmaterial and the same have been properly dealt with in the books of account;
(c) The title deeds of immovable properties are held in the name of the company;
(ii) The physical verification of inventory has been conducted at reasonable intervalsby the management and no material discrepancies were noticed during such verification;
(iii) The company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013.
(iv) In respect of loans investments guarantees and security the provisions ofsection 185 and 186 of the Companies Act 2013 have been complied with.
(v) In our opinion and according to the information & explanations given to us thecompany has not accepted any deposits.
(vi) As informed to us by the management the Central Government has not prescribed tothe company the maintaining cost records under Section 148 (1) of the Companies Act 2013.
(vii) (a) According to the records of the company the company is generally regular indepositing undisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added tax cessand any other statutory dues to the appropriate authorities and there were no arrears ofoutstanding statutory dues as on the last day of the financial year concerned for a periodof more than six months from the date they became payable except property tax Rs.462136/- LBT Rs. 87511/- & VAT 28906/-;
(b) According to the records of the company there are no dues of income tax or salestax or service tax or duty of customs or excise duty or value added tax which have notbeen deposited on account of any dispute except:
|Name of the Statute ||Amount (Rs) ||Period to which amount relates ||Forum |
|Income Tax ||8089830 ||AY 2013-14 ||CIT Appeals Pune |
|Sales Tax (MVAT) ||208268 ||FY 2011-12 ||DOST (Appeals) |
|Sales Tax (CST) ||453820 ||FY 2011-12 ||DOST (Appeals) |
(viii) Based on our audit procedures and on the information and explanations given bythe management we are of the opinion that the company has not defaulted in repayment ofloans or borrowing to a financial institution bank Government or dues to debentureholders.
(ix) The company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year;
(x) Based upon the audit procedures performed and information and explanations given bythe management we report that no fraud by the company or any fraud on the Company by itsofficers or employees has been noticed or reported during the year;
(xi) Managerial remuneration for the year has been paid or provided in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Companies Act;
(xii) The company is not a Nidhi Company;
(xiii) Based upon the audit procedures performed and information and explanations givenby the management all transactions with the related parties are in compliance withsections 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the Financial Statements etc. as required by the applicable accountingstandards;
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review;
(xv) Based upon the audit procedures performed and information and explanations givenby the management the company has not entered into any non-cash transactions withdirectors or persons connected with him within the meaning of the provisions of section192 of Companies Act 2013;
(xvi) The company is not required to be registered under section 45- IA of the ReserveBank of India Act 1934.
For M/S P G BHAGWAT
Firm's Registration Number 101118W
Membership Number 83374
Pune; Date: 30/05/2016
Annexure - B to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of EnviarElectrodyne Limited ("the Company") as of 31 March 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occurand not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
Disclaimer of Opinion
Framework for internal financial control over financial reporting not established butdoes not impact the audit opinion on financial statements
According to the information and explanation given to us the Company has notestablished its internal financial control over financial reporting on criteria based onor considering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
Because of this reason we are unable to obtain sufficient appropriate audit evidenceto provide a basis for our opinion whether the Company had adequate internal financialcontrols over financial reporting and whether such internal financial controls wereoperating effectively as at March 312016.
We have considered the disclaimer reported above in determining the nature timing andextent of audit tests applied in our audit of the standalone financial statements of theCompany and the disclaimer does not affect our opinion on the standalone financialstatements of the Company.
For M/S P G BHAGWAT