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Sabrimala Industries India Ltd.

BSE: 540132 Sector: Others
NSE: N.A. ISIN Code: INE400R01018
BSE 05:30 | 01 Jan Sabrimala Industries India Ltd
NSE 05:30 | 01 Jan Sabrimala Industries India Ltd

Sabrimala Industries India Ltd. (SABRIMALAINDUS) - Auditors Report

Company auditors report

To The Members of

Sabrimala Industries India Limited

(formerly known as Sabrimala Leasing and Holdings Limited)

1. Report on the Financial Statements

We have audited the accompanying financial statements of Sabrimala Industries IndiaLimited (formerly known as Sabrimala Leasing and Holdings Limited) (hereinafterreferred to as "the company") which comprise the Balance Sheet as at March 312017 the Statement of Profit and Loss and Cash flow statement for the year then endedand a summary of significant accounting policies and other explanatory information.

2. Management's Responsibility for the Financial Statements

The Company's Board of Directors are responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding of the assets of the Company and forpreventing and detecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

3. 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 there under.

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 financial statements.

4. Basis for qualified opinion We draw your attention to :

a) Note No. 9 to the financial statements Inventories includes amounting to Rs.8256869/- which were lying with third parties/e-commerce operators i.e. Amazon FlipKartetc. as on March 31 2017 which could not be confirmed and reconciled on the said date.Any adjustments if required will be recognized in the books of accounts upon the receiptand confirmation and reconciliation.

b) Note no. 10 to the financial statements the company is in the process ofreconciling the trade receivable balances with certain customer and the impact ofadjustments if any that may arise is presently not ascertainable.

5. Qualified Opinion

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 forqualified opinion " paragraph above the aforesaid financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the company as at 31st March 2017 and its profit and its cash flows for theyear ended on that date.

6. Report on other Legal and Regulatory Requirements

(i) 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 Act we give in the "Annexure A" a statement on the matters specifiedin the paragraph 3 and 4 of the Order to the extent applicable.

(ii) 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 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 accounts.

(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.

(e) On the basis of written representations received from the directors as on March 312017 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2017 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 B"; and

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the Rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to us:

i. The company does not have any pending litigations as on 31.03.2017which have impact on its financial position in its financial statements;

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. there were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. the Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8 th November2016 to 30th December 2016. Based on the audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management - Refer Note 20 of thefinancial statement.

For Khatter & Associates

Chartered Accountants

FRN:021979N

Sd/-

ASHOK KUMAR

Partner

M.No.-094263

Place : New Delhi

Date : May 30 2017

Annexure "A" to the "Independent Auditors report"

[The annexure referred to in Paragraph 6 (i) under the heading of "Report on otherLegal & Regulatory Requirements" of Independent Auditors' Report to the membersof the Company on the financial statements for the year ended 31 March 2017 we reportthat :

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the Management according to theprogramme of periodical verification in phased manner which in our opinion is reasonablehaving regard to the size of the Company and the nature of its fixed assets. Thediscrepancies noticed on such physical verification were not material.

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

(ii) As explained by the Management the company is in business of the trading productsthrough e-commerce operators and due to nature of its business some of the stock is lyingwith these e-commerce operators i.e. Amazon FlipKart etc. Most of the sales transactionsare done through these e-commerce operators which are regularly updated by them on theirportals. As explained by the management and cross-checked by us these e- commerceoperators do not allow its vendors to conduct the physical verification of inventories attheir premises either any time during the year or as at 31st March 2017.Therefore physical verification of inventories lying with e-commerce operators could notbe conducted. Only quantitative reconciliation is done by management periodically fromsales and sales return records updated by e-commerce operators on their portals. HoweverManagement is regular in Physical verification of the inventory lying with company. Asreported by management no discrepancies were noticed during physical verification of theinventory lying with company. In our opinion the procedure for the physical verificationfollowed by the Management is reasonable and adequate in relation to the size of theCompany and nature of its business. In our opinion and on the basis of our examination ofthe records the Company is generally maintaining proper records of its inventories.

(iii) In our opinion and according to the information and explanation given to us theCompany has not granted any loan secured or unsecured to any companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Companies Act 2013. Accordingly the provisions of Clause 3(iii) (a) (b)& (c) of the Order are not applicable to the Company.

(iv) The Company has not made any transaction in respect of loans investmentsguarantees and security. Accordingly the provisions of Clause 3(iv) of the Order relatedto compliance with the provisions of the Section 185 and 186 of the Companies Act 2013are not applicable to the Company.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from public within the meaning of the Section 73to76 of the Act and rules framed there under and the directives issued by Reserve bank ofIndia or any other relevant provisions of the Act. We have been informed that no order hasbeen passed by the Company Law Board or National Company Law Tribunal or Reserve Bank ofIndia or any Court or other tribunal in this regard.

(vi) Since the company is in the business of trading therefore the requirement as tothe maintenance of cost records under section 148(1) of the Act is not applicable to thecompany.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including in provident fund income-taxservice tax value added tax central excise duty other material statutory dues have beenregularly deposited during the year by the company with the appropriate authorities.However delay in the deposit of tax deducted at source was noticed.

According to the information and explanations given to us no undisputed amountspayable in respect of income tax service tax value added tax cess and other materialstatutory dues were in arrears as at 31 March 2017 for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations given to us there are no materialdues of income tax and service tax which have not been deposited with the appropriateauthorities on account of any dispute.

(viii) The Company does not have any loans or borrowings from any financialinstitution banks government or debenture holders during the year except OD from YesBank against own fixed deposits. Terms and conditions of such OD are not prejudicial tothe interest of the company.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order 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) The company has paid managerial remuneration within the limit prescribed by theprovisions of section 197 read with schedule V of the Companies Act 2013.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company the transactions with the related parties arein compliance with sections 177 and 188 of the Companies Act 2013 where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the appropriate accounting 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. Accordingly paragraph 3 (xiv) of the Order is not applicable.

(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 paragraph 3(xv)of the Order is not applicable.

(xvi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.

For Khatter& Associates

Chartered Accountants

FRN:021979N

Sd/-

ASHOK KUMAR

Partner

M.No.-094263

Place : New Delhi

Date : May 30 2017

Annexure "B'' to the "Independent 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 SabrimalaIndustries India Limited (formerly known as Sabrimala Leasing and Holdings Limited ("theCompany") as of 31 March 2017 in conjunction with our audit of the financialstatements 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 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation 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 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

The 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements. InherentLimitations of Internal Financial Controls Over Financial Reporting

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.

Qualified Opinion

Based on the information provided by the management and our test checking at the timeof the audit the following material weaknesses noticed at the time of the audit :

(a) The company did not have the appropriate system for the reconciliation of customerbalances i.e. trade receivables on periodical basis. This could results in the impact onthe profitability of the company by recognition of revenue without establishing reasonablecertainty of ultimate collection and other accounting adjustments on confirmation andreconciliation if any.

A ‘material weakness' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.

In our opinion except for the possible effects of the material weaknesses describedabove on the achievement of the objectives of the control criteria the Company hasin all material respects an adequate internal financial controls system over financialreporting and such internal financial controls over financial reporting were operatingeffectively as at 31 March 2017 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

For Khatter& Associates

Chartered Accountants

FRN: 021979N

Sd/-

ASHOK KUMAR

Partner

M.No.-094263

Place: New Delhi

Date : May 30 2017