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Sadbhav Engineering Ltd.

BSE: 532710 Sector: Infrastructure
NSE: SADBHAV ISIN Code: INE226H01026
BSE LIVE 15:40 | 22 Sep 285.70 -4.55
(-1.57%)
OPEN

285.75

HIGH

290.50

LOW

283.30

NSE 15:31 | 22 Sep 287.05 -2.10
(-0.73%)
OPEN

288.00

HIGH

290.05

LOW

285.00

OPEN 285.75
PREVIOUS CLOSE 290.25
VOLUME 2300
52-Week high 350.90
52-Week low 220.00
P/E 25.19
Mkt Cap.(Rs cr) 4,903
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 285.75
CLOSE 290.25
VOLUME 2300
52-Week high 350.90
52-Week low 220.00
P/E 25.19
Mkt Cap.(Rs cr) 4,903
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sadbhav Engineering Ltd. (SADBHAV) - Auditors Report

Company auditors report

To

The Members of Sadbhav Engineering Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of SadbhavEngineering 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.

Auditor's Responsibility

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 inaccordance 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 theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement. An audit involves performing procedures to obtain audit evidenceabout the amounts and the disclosures in the financial statements. 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. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany's preparation of the financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of 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 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 sub-section (11) of section 143 ofthe Act we give annexure a statement on the matters specified in paragraphs 3 and 4 ofthe 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 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 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 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.

(f) With respect to the adequacy of the internal financial control over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure-A"

(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 2.31 (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 has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For SURANA MALOO & CO.
Chartered Accountants
Firm Reg. No. 112171W
S. D. PATEL
Place : Ahmedabad PARTNER
Date : April 27 2016 Membership No. 37671

Annexure to Independent Auditors' Report

The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31st March 2016 wereport that:

1. In respect of Fixed Assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us all the fixed assets have been physically verified by themanagement during the year in a phased periodical manner which in our opinion isreasonable having regard to the size of the Company and nature of its assets. No materialdiscrepancies were noticed on such physical verification.

(c) Based on our audit procedures and according to the information and explanationsgiven to us the title deeds of immovable properties are held in the name of the Company.

2. In respect of Inventories:

As explained to us inventories have been physically verified by the management atregular intervals during the year and there were no material discrepancies noticed onphysical verification of inventory as compared to the book records.

3. In respect of Loan to parties covered in the register maintained under section 189:

(a) The company has granted loans to one subsidiary company covered in the registermaintained u/s 189 of the Act. The terms and conditions of the loans granted are notprejudicial to the Company's interest.

(b) The borrower has been regular in the payments of the interest as stipulated. Theterms of arrangements do not stipulate any repayment schedule and the loans are repayableon demand except interest free term loan of Rs 7795.63 lakhs which is repayable aftereleven years from the date of term loan agreement dated 22nd October 2014.

(c) There are no overdue amounts of more than ninety days in respect of the loansgranted to the bodies corporate listed in the register maintained u/s 189 of the Act.

4. In respect of loans Investments guarantees and Securities:

In our opinion and according to the information and explanations given to us TheCompany has complied with the provision of Section 185 and 186 of the Act in respect ofloans investment guarantees and securities.

5. In respect of deposit from the Public:

The Company has not accepted any deposits from the public within the meaning of Section73 to 76 and other relevant provisions of the Act and rules framed thereunder.

6. In respect of maintenance of cost records:

We have broadly reviewed the cost records maintained by the company pursuant to theCompanies (Cost Records and Audit) Rules 2014 prescribed by the Central government underSection148(1) of the Act and are of the opinion that prima facie the prescribed costrecords have been maintained. We have however not made a detailed examination of thecost records with a view to determine whether they are accurate or complete.

7. In respect of statutory dues:

(a) According to the records of the Company the Company is regular in depositing withappropriate authorities undisputed statutory dues including Provident Fund EmployeesState Insurance Income Tax Sales Tax Wealth Tax Service Tax Customs Duty ExciseDuty cess and other material statutory dues applicable to it. According to theinformation and explanations given to us no undisputed amounts payable in respect of theaforesaid dues were outstanding as at 31st March 2016 for a period of more than sixmonths from the date of becoming payable except Labour cess of Rs 606.86 lakhs.

(b) The disputed statutory dues aggregating to Rs 5826.33 lakhs that have not beendeposited on account of matters pending before appropriate authorities are as under:

Sr. No. Name of the Statute Nature of the Dues Period to which the amount relates Forum where Dispute is pending Amount R in Lakhs)
01. The Finance Act 1994 Service Tax 2007-08 and 2008-09 CESTAT Ahmedabad 545.05
02. The Income Tax Act 1961 Income Tax 2004-05 to 2006-07 The High Court Gujarat 611.03
03 The Income Tax Act 1961 Income Tax 2010-11 2012-13 and 2013-14 Commissioner of Income Tax (Appeal) Ahmedabad 2129.88
04 The Income Tax Act 1961 Income Tax 2006-07 to 2010-11 ITAT Ahmedabad 2222.60
05 The Income Tax Act 1961 Income Tax 2010-11 ITAT Ahmedabad 13.25
06 Jharkhand Value Added Tax Act 2005 VAT 2010-11 Commissioner Appeal (Commercial Tax) Jharkhand 77.40
07 Jharkhand Value Added Tax Act 2005 VAT 2010-11-2011-12 VAT Tribunal Haryana 87.31
08 Haryana Value Added Tax Act 2003 VAT 2012-13 Commissioner Appeal (Commercial Tax) Haryana 88.49
09 Rajasthan Minor Mineral Concession Rules 1986 Royalty 2013-14 The High Court Rajasthan 51.32
TOTAL 5826.33

8. In respect of dues to financial institution / banks / government / debentures:

Based on our audit procedures and according to the information and explanations givento us we are of the opinion that the Company has not defaulted in repayment of dues tofinancial institutions banks government and dues to debenture holders.

9. In respect of application of term loans:

In our opinion and according to the information and explanations given to us the termloans obtained by the Company were prima facie applied for the purposes for which theloans were obtained. The Company has not raised any money by way of initial public offeror further public offer (including debt instruments) during the year.

10. In respect of fraud:

Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations given bythe management we report that no material fraud by the Company or any fraud on theCompany by its officers or employees has been noticed or reported during the year.

11. In respect of Managerial Remuneration:

In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid in accordance with the requisite approvals mandatedby the provisions of the section 197 read with Schedule V to the Companies Act.

12. In respect of Nidhi Company:

In our opinion the Company is not a Nidhi Company therefore the provision of clausexii of paragraph 3 of the Order are not applicable to the Company.

13. In respect of Related party transaction:

Based on our audit procedures and according to the information and explanations givento us all transaction with the related party are in compliance with section 177 and 178of the Act and the details have been disclosed in the Financial Statement as required bythe applicable accounting standard.

14. In respect of allotment of Preferential allotment:

According to the information and explanations given to us and based on our examinationof the records of the Company the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debenture during the year underreview.

15. In respect of Non-Cash transaction with directors:

According to the information and explanations given to us and based on our examinationof the records of the Company the Company has not entered into any non-cash transactionwith directors or persons connected with them. Accordingly Paragraph 3(xv) of the orderis not applicable.

16. In respect of registration under Sec 45-IA:

In our opinion and according to the information and explanations given to us theCompany is not required to registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For SURANA MALOO & COMPANY
Chartered Accountants
Firm Reg. No. 112171W
S. D. PATEL
Place : Ahmedabad PARTNER
Date : April 27 2016 Membership No. 37671

Annexure - A

TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF SADBHAVENGINEERING LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act2013 ("the Act")

We have audited the internal financial controls over financial reporting of SadbhavEngineering Limited ("the Company") as of March 31 2016 in conjunction with ouraudit of the 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 laying down 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 includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.

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 Standards on Auditing to the extent applicable to an audit of internal financialcontrols and the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 internal financial controls system overfinancial 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 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

Our opinion the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2016 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For SURANA MALOO & COMPANY
Chartered Accountants
Firm Reg. No. 112171W
S. D. PATEL
Place : Ahmedabad PARTNER
Date : April 27 2016 Membership No. 37671