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Eon Electric Ltd.

BSE: 532658 Sector: Engineering
NSE: EON ISIN Code: INE076H01025
BSE LIVE 15:24 | 18 Aug 61.50 -0.60
(-0.97%)
OPEN

62.25

HIGH

62.50

LOW

60.15

NSE 15:31 | 18 Aug 61.65 -0.45
(-0.72%)
OPEN

62.00

HIGH

62.70

LOW

61.00

OPEN 62.25
PREVIOUS CLOSE 62.10
VOLUME 6727
52-Week high 95.30
52-Week low 48.00
P/E 24.70
Mkt Cap.(Rs cr) 99
Buy Price 61.50
Buy Qty 400.00
Sell Price 62.60
Sell Qty 45.00
OPEN 62.25
CLOSE 62.10
VOLUME 6727
52-Week high 95.30
52-Week low 48.00
P/E 24.70
Mkt Cap.(Rs cr) 99
Buy Price 61.50
Buy Qty 400.00
Sell Price 62.60
Sell Qty 45.00

Eon Electric Ltd. (EON) - Auditors Report

Company auditors report

Independent Auditors’ Report

To The Members of Eon Electric Ltd.

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Eon ElectricLimited ("the Company") which comprise the Balance Sheet as at March 312016and the Statement of Profit and Loss and the Cash Flow Statement for the year then endedand 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 Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting 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 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.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions 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 performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone 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 March 312016 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 ("the Order")issued by the Central Government of India in terms of sub- section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure I a statement on the matters specifiedin 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 the law have been kept bythe Company so far as it appears from our examination of those books;

(c) the Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

(d) in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) on the basis of the written representations received from the Directors as on March312016 taken on record by the Board of Directors none of the Directors is disqualifiedas on March 312016 from being appointed as a Director in terms of Section 164 (2) of theAct;

(f) 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 II; and

(g) 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 31(a) to the financial statements.

(ii) the Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) there were no amounts which were required to be transferred to Investor Educationand Protection Fund by the Company.

Rajesh Sethi
Partner
M. No. 085669
For and on behalf of
JC Bhalla & Co.
Place: New Delhi Chartered Accountants
Dated: May 23 2016 Firm Regn. No: 001111N

Annexure I to Independent Auditors’ Report

Referred to in Paragraph 1 under "Report on Other Legal and RegulatoryRequirements" section of report of even date on the financial statements for the yearended on March 312016 of Eon Electric Ltd.

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation

of all fixed assets.

(b) The fixed assets have been physically verified by the management at the year-end.We are informed that no material discrepancies have been noticed by the management on suchverification as compared with the record of fixed assets maintained by the Company.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) The inventory (excluding stocks with third parties) has been physically verifiedby the management during the year. In respect of inventories lying with the third partiesthese have been substantially confirmed by them. In our opinion frequency of verificationis reasonable. The discrepancies noticed on verification between the physical stock andthe book records were not material and have been properly dealt with in the books ofaccount.

(iii) According to the information and explanations given to us and in our opinion theCompany has not granted any loans secured or unsecured to Companies Firms LimitedLiability Partnerships or other parties covered in register maintained under section 189of the Companies Act. Accordingly clauses (iii) (a) (iii) (b) and (iii) (c) of paragraph3 of the Companies (Auditor's Report) Order 2016 are not applicable to the Company.

(iv) According to the information and explanations given to us and in our opinion theCompany has not advanced any loan investment guarantee or security to any person asspecified under sections 185 and 186 of the Companies Act 2013. Accordingly clause (iv)of paragraph 3 of the Companies (Auditor's Report) Order 2016 is not applicable to theCompany.

(v) In our opinion and according to the information and explanation given to us theCompany has not accepted deposits from the public during the year within the meaning ofSection 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rulesframed there under.

(vi) On the basis of the records produced we are of the opinion that prima facie thecost accounting records prescribed by the Central Government under section 148(1) of theCompanies Act 2013 have been maintained by the Company. However we are not required toand have not carried out any detailed examination of such records.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues

including provident fund employees' state insurance income-tax sales-tax servicetax duty of customs duty of excise value added tax cess and other statutory duesapplicable to it and there are no undisputed amounts payable in respect of the aforesaiddues outstanding as at March 312016 for a period of more than six months from the datethey became payable.

(b) According to the information and explanations given to us the particulars ofdisputed dues of duty of excise income tax and sales tax aggregating to Rs.54136865/-Rs.2137200/- and Rs. 5374917/- as at March 31 2016 which have not been deposited onaccount of disputed matters are as follows:

Nature of Dues Demand in Dispute (Rs.) Amount Deposited (Rs.) Period to which amount relates Forum where pending
Excise Duty Cases
Excise Duty including penalty 1810652 515000 August 1998 to December 1998 Central Excise and Service Tax Appellant Tribunal New Delhi (CESTAT)
Excise Duty including penalty 10450866 2500000 2007-2008 Central Excise and Service Tax Appellant Tribunal New Delhi (CESTAT)
Excise Duty including penalty 39484604 - May-04 Central Excise and Service Tax Appellant Tribunal New Delhi (CESTAT)
Excise Duty including penalty 568024 - April 2001 to August 2004 Central Excise and Service Tax Appellant Tribunal New Delhi (CESTAT)
Penalty 1822719 182272 July 2008 to September 2008 Central Excise and Service Tax Appellant Tribunal Allahabad (CESTAT)
Total 54136865 3197272
Nature of Dues Demand in Dispute (Rs.) Amount Deposited (Rs.) Period to which amount relates Forum where pending
Income Tax Case
Income Tax 2137200 - 2007-08 Commissioner of Income Tax (Appeals) New Delhi
Total 2137200 -
Sales Tax / VAT Cases
Tamil Nadu Value Added Tax including penalty 5374917 806702 2006-07 2007-08 2008-09 2009-10 & 2010-11 Appellate Deputy Commissioner of Commercial Taxes Chennai
Total 5374917 806702

Appeals filed by Central Excise Department as at March 31 2016

nature of Dues Demand in Dispute (Rs.) Amount Deposited (Rs.) Period to which amount relates Forum where pending
Excise Duty including penalty 2065676 - December 2007 to September 2008 Central Excise and Service Tax Appellant Tribunal New Delhi(CESTAT)
Excise Duty including penalty 6024073 - May 1990 to July 1998 Central Excise and Service Tax Appellant Tribunal New Delhi(CESTAT)
Service Tax including education cess 119921 - July 2004 to March 2007 Central Excise and Service Tax Appellant Tribunal New Delhi(CESTAT)
Total 8209670 -

(viii) Based on our audit procedures and according to the information and explanationsgiven to us we are of the opinion that the Company has not defaulted in repayment ofloans or borrowing to a financial institution bank and government. The Company has nooutstanding dues to debenture holders.

(ix) According to the information and explanations given to us the Company did notraise any money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Accordingly clause (ix) of paragraph 3 ofthe Companies (Auditor's Report) Order 2016 is not applicable.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly clause (xii) of paragraph 3 of the Companies(Auditor's Report) Order 2016 is not applicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly clause (xv) ofparagraph 3 of the Companies (Auditor's Report) Order 2016 is not applicable.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

Rajesh Sethi
Partner
M. No. 085669
For and on behalf of
JC Bhalla & Co.
Place: New Delhi Chartered Accountants
Dated: May 23 2016 Firm Regn. No: 001111N

Annexure II to the Independent Auditors’ Report of even date on the StandaloneFinancial Statements of Eon Electric Limited

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 EonElectric Ltd. ("the Company") as of March 31 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.

These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors’ Responsibility

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 The Institute ofChartered Accountants of India and deemed to be prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and those receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.

Rajesh Sethi
Partner
M. No. 085669
For and on behalf of
JC Bhalla & Co.
Place: New Delhi Chartered Accountants
Dated: May 23 2016 Firm Regn. No: 001111N