To the Members of Savita Oil Technologies Limited Report on the Standalone Ind ASFinancial Statements
We have audited the accompanying standalone Ind AS financial statements of SAVITAOIL TECHNOLOGIES LIMITED ("the Company") which comprise the Balance Sheetas at 31st March 2017 the Statement of Profit and Loss (including other comprehensiveincome) the Statement of changes in Equity 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 Ind AS 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 Ind AS financial statements that give a true and fair view of thefinancial position financial performance (including other comprehensive income) cashflows and changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) specifiedunder section 133 of the Act read with relevant rules issued thereunder. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.
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 standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone Ind AS financial statements. The procedures selected dependon the auditor's judgement including the assessment of the risks of material misstatementof the standalone Ind AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the standalone Ind AS financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by Company's Directors as well asevaluating the overall presentation of the standalone Ind AS 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 Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2017 and its profit (including other comprehensive income) thechanges in equity and its cash flows for the year ended on that date.
Emphasis of Matter
Refer Note no. 26 regarding the payment of remuneration in excess of amount payable asper the provision of the Act to the Chairman and Managing Director aggregating to Rs 30.12lacs for the financial year 2014-2015. The Company has already made an application to theCentral Government seeking their approval to waive excess remuneration paid to theManaging Director. The approval from the Central Government is awaited. Our opinion is notmodified in respect of these matters.
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 section 143(11) of the Act we givein the Annexure I a statement on the matters specified in paragraph 3 and 4 of the Orderto 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 (including other comprehensiveincome) the Statement of changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account;
(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under section 133 of the Act read with therelevant rules issued thereunder;
(e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164(2) of the Act;
(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 as amended bythe Companies (Audit and Auditors) Rules 2017 in our opinion and to the best of ourinformation and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements Refer Note 28 to thestandalone Ind AS financial statements;
(ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; and (iv) The Company hasprovided requisite disclosures in the standalone Ind AS financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on 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 37 tothe standalone Ind AS financial statements.
Annexure I referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" of our report of even date
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipments.
(b) As informed to us the fixed assets have been physically verified by the managementduring the period according to a phased programme. In our opinion such programme isreasonable having regard to the size of the Company and the nature of its assets. We havebeen further informed that no material discrepancies were noticed on such verification bythe management between the book records and physical verification.
(c) According to the information and explanations given to us the title deeds ofimmovable properties as disclosed in Note no. 3 and 4 to the standalone financialstatements are held in the name of the Company.
(ii) The inventories have been physically verified at reasonable intervals by themanagement during the period. The discrepancies noticed on physical verification ascompared to the book records were not material and have been properly dealt with in thebooks of account.
(iii) The Company has not granted loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Act. Hence the question of reporting under sub clauses (a) (b) and(c) of the clause 3(iii) of the Order does not arise.
(iv) The Company has not granted any loans or under section 185 made any investmentprovided any guarantee or security. Hence the question of reporting under clause 3(iv) ofthe Order does not arise.
(v) In our opinion and according to the information and explanations given to us theCompany has complied with the directives issued by the Reserve Bank of India and theprovisions of sections 73 to 76 or any other relevant provisions of the Act and the rulesframed there under to the extent applicable. We are informed by the Management that noorder has been passed by the Company Law Board or National Company Law Tribunal or ReserveBank of India or any court or any other Tribunal in this regard.
(vi) We have broadly reviewed accounts and records maintained by the Company pursuantto rules made by the Central Government for the maintenance of cost records under Section148(1) of the Act in respect of Company's products to which the said rules are madeapplicable and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have however not made a detailed examination ofrecords with a view to determine whether they are accurate.
(vii) (a) According to the information and explanations given to us and according tothe records of the Company examined by us in our opinion the Company is generallyregular in depositing with the appropriate authorities undisputed statutory dues includingProvident Fund Employees' State Insurance Income-tax Sales Tax Service Tax duty ofCustom duty of Excise Value Added Tax Cess and any other statutory dues whereverapplicable.
According to the information and explanations given to us no undisputed amountspayable in respect of aforesaid dues were outstanding as at 31st March 2017for a period of more than 6 months from the date they became payable. (b) The particularsof statutory dues that have not been deposited on account of disputes are given in AnnexureA.
(viii) We have been informed that the Company has not defaulted in repayment of loansor borrowings to financial institutions banks and Government. The Company has not raisedany funds through debentures.
(ix) The Company has not raised money by way of initial public offer or further publicoffer (including debt instruments). According to the information and explanations given tous and on the basis of the records examined by us we state that the Company has primafacie applied the term loan for the purpose for which it was obtained.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us no material fraud on or by thecompany has been noticed or reported during the period by the Company.
(xi) The managerial remuneration has been paid in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act. Asstated in note no. 26 and as stated in the Emphasis of Matter para of our main report thepayment of remuneration in excess of amount payable as per the provision of the Act to theManaging Director aggregating to Rs 30.12 lacs for the financial year 2014-2015. TheCompany has already made an application to the Central Government seeking their approvalto waive excess remuneration paid to the Managing Director. The approval from the CentralGovernment is awaited.
(xii) The Company is not a chit fund or a Nidhi company. Hence the question ofreporting under clause 3(xii) of the Order does not arise.
(xiii) The Company has complied with the provisions of sections 177 and 188 of the Actin respect of transactions with the related parties and the details have been disclosed inthe Financial Statements etc. as required by the applicable accounting standards. (xiv)The Company has not made any preferential allotment or private placement of shares orfully or partly convertible debentures during the period.
(xv) The Company has not entered into any non-cash transactions with directors orpersons connected with him covered under the provisions of section 192 of the Act. (xvi)The Company is not required to be registered under section 45-IA of the Reserve Bank ofIndia Act 1934.
Annexure II to our report of even date
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 SavitaOil Technologies Limited ("the Company") as of 31st March 2017 inconjunction with our audit of the standalone financial statements of the Company for theperiod 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 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 judgement 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 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.
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 31st March 2017 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.
| ||For G. M. Kapadia & Co. |
| ||Chartered Accountants |
| ||Firm's Registration No: 104767W |
| ||Rajen Ashar |
|Place : Mumbai ||Partner |
|Dated : 27th May 2017 ||Membership No: 048243 |