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Sanco Industries Ltd.

BSE: 532120 Sector: Industrials
NSE: SANCO ISIN Code: INE782L01012
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Sanco Industries Ltd. (SANCO) - Auditors Report

Company auditors report

To the Members of

M/s Sanco Industries Limited

Report on the Standalone Financial Statements

We have audited the accompanying Standalone financial statements of M/sSancoIndustries Limited (?the Company) which comprise the Balance Sheet as at 31stMarch2016 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended 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 Section134(5) of the Companies Act 2013 (the Act‘) with respect to the preparation andpresentation of these standalone financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement 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 that 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 performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors‘ judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company‘spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company‘s Directors as well as evaluating theoverall presentation of the financial statements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe 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 31stMarch 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 in the Annexure-A a statement on the matters specified in the paragraph3 and 4 of the Order.

2) As required by Section 143 (3) of the Act we report that:

i. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit.

ii. In our opinion the Company has kept proper books of account as required by law sofar as it appears from our examination of those books.

iii. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in the agreement with the books of account.

iv. 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.

v. 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.

vi. 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

vii. 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:

1. The Company has disclosed the impact of pending litigations on its financialposition in its Financial Statement- - Refer Note 40 (A) to the Financial Statement.

2. The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

3. There were no amounts that were pending to be transferred to the Investor Educationand Provident Fund by the Company.

For VJ M & Associates
Chartered Accountants
Firm s Regn. No.:027535N
Sd/-
CA. Kavit Vijay
(Partner)
Membership No. 517015
Date: 30th May 2016
Place: Delhi

ANNEXURE-A TO INDEPENDENT AUDITORS REPORT

Referred to in Paragraph 1 under ?Report on Other Legal and Regulatory Requirementssection of our report of even date of M/s Sanco Industries Limited (?the Company) for theyear ended on 31st March 2016 we report that:

I. In respect of Fixed Assets of the Company:

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

ii. The Fixed Assets have been physically verified by the management at reasonableintervals and no material discrepancies were noticed on such physical verification;

iii. 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 immoveable properties areheld in the name of the company.

II. The inventory has been physically verified during the year by the management atreasonable intervals and the discrepancies noticed on such physical verification ofinventory as compared to book records were not significant and were properly dealt within the books of account.

III. The Company has not granted any loan secured or unsecured to the companies orother parties covered in the register maintained under section 189 of the Act.Accordingly the provisions of clause 3(iii) of the order are not applicable to thecompany.

IV. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto the guarantees and investments made.

V. The Company has not accepted any deposits under the provisions of Sections 73 to 76or any other relevant provisions of the Act and the rules framed there under during theyear under report.

VI. We have broadly reviewed the cost records maintained by the Company under Section148(1) of the Act and are of the opinion that prima- facie the prescribed records havebeen made and maintained.

VII. In respect of Statutory dues:

1. According to the records of the Company undisputed statutory dues includingProvident Fund Employee‘s State Insurance and Income Tax Sales Tax Service TaxCustom Duty Value Added Tax and other applicable statutory dues have been generallydeposited regularly with the appropriate authorities except in certain cases whereProvident Fund Employee‘s State Insurance Tax deducted at source Sales Tax andService tax where there have been delays in deposit.

2. According to the information and explanation given to us there are no dues ofcustom duty sales tax and service tax that have not been deposited on account of anydispute. However following amount are involved (Gross of amount deposited under protestif any) with under-mentioned forums in respect of the disputed statutory dues:

Aggregate Income Tax of Rs. 8.94 Lacs pending before CIT (Appeals).

VIII. Based on the audit procedure and according to the information and explanationgiven to us we are of the opinion that the Company has not defaulted in repayment ofloans or borrowings to financial institutions banks or dues to debenture holders.

IX. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments). Accordingly the provisions of clause 3(ix) ofthe order are not applicable to the company and hence not commented upon.

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 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 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 given 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 him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

XVI. In our opinion The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) of the Order is notapplicable.

For VJ M & Associates
Chartered Accountants
Firm s Regn. No.:027535N
Sd/-
CA. Kavit Vijay
(Partner)
Membership No. 517015
Date: 30th May 2016
Place: Delhi

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 M/s SancoIndustries Limited (the Company‘) as of 31stMarch 2016 in conjunction with our auditof 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 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 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 the 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 Companied 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 deemed to beprescribed under Section 143(10) of the Companied Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wereestablished and maintained and if such controls operated effectively in all materialrespects. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors‘ judgment including the assessment of therisks 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 toprovide a basis for our audit opinion on the Company‘s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company‘s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company‘s internal financial control overfinancial reporting includes those policies and procedures that:

I.Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company; II.Providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorizations of the Management and Directors of the Company; and III.Provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company‘s assets that could have a material effect on thefinancial 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 31stMarch 2016 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 ICAI.

For VJ M & Associates
Chartered Accountants
Firm s Regn. No.:027535N
Sd/-
CA. Kavit Vijay
(Partner)
Membership No. 517015
Date: 30th May 2016
Place: Delhi