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Scooters India Ltd.

BSE: 505141 Sector: Auto
NSE: N.A. ISIN Code: INE959E01011
BSE LIVE 12:09 | 21 Aug 42.85 1.85
(4.51%)
OPEN

39.20

HIGH

42.85

LOW

39.20

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 39.20
PREVIOUS CLOSE 41.00
VOLUME 110
52-Week high 75.95
52-Week low 30.70
P/E
Mkt Cap.(Rs cr) 366
Buy Price 39.30
Buy Qty 200.00
Sell Price 42.85
Sell Qty 31.00
OPEN 39.20
CLOSE 41.00
VOLUME 110
52-Week high 75.95
52-Week low 30.70
P/E
Mkt Cap.(Rs cr) 366
Buy Price 39.30
Buy Qty 200.00
Sell Price 42.85
Sell Qty 31.00

Scooters India Ltd. (SCOOTERSINDIA) - Auditors Report

Company auditors report

TO THE MEMBERS OF SCOOTERS INDIA LIMITED LUCKNOW

Report on the Financial Statements

We have audited the accompanying financial statements of Scooters India Limited ("theCompany") which comprise the Balance Sheet as at March 31 2016 the Statement ofProfit and Loss and the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.

Management’s Responsibility for the 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& 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 the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and 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 control 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.

Auditors’ 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 mis-statement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s 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 accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in india :

(a) In the case of Balance Sheet of the state of affairs of the Company as at March31 2016;

(b) In the case of the Statement of Profit and Loss of the profit for the year endedon that date; and

(c) In the case of the Cash Flow Statement of the cash flow for the year ended on thatdate.

Emphasis of matter

We draw attention to the following matters in the Notes to the financial statements :

(a) Attention is invited to Note No.1 Para 7a to the financial statement where thecompany has made a 0.5% adhoc provision on the value of closing stock of raw material andcomponents stores spares and consumables for redundancy. In the absence of adequaterecord for waste and reasonable estimates of its net realisable value we are unable tocomment upon the adequacy of these provisions.

(b) Attention is invited to Note No.34 to the financial statement the balances inaccounts of parties contractors Government Department etc. including those balancesappearing under current assets Loan and Advances and current liabilities are subject toconfirmation and reconciliation the financial statement do not include the impact ofadjustment if any which may arise out of the confirmation and reconciliation process.

(c) Attention is invited to Note No.41 to the financial statement where the companyhas not provided for the arrears to the employees who were on the pay roll of the companyas on 01-04-2013 as the approval is awaited from GOI.

(d) Attention is invited to Note No.45 to the financial statement regarding repaymentof principal and interest on non plan loan of Rs. 189 lakhs received by the company fromthe Government of India at an interest rate of 13.50% per annum the company has notprovided interest over it as it has filed an application for freezing of the interest andwaiver of the loan with the Ministry of Heavy Industry however Ministry approval on thesame is pending.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the 'Annexure-A' a statement on the matters specifiedin paragraphs 3 and 4 of the order.

2. We are enclosing our report in terms of Section 143 (5) of the Act on the basis ofsuch checks of the books and records of the Company as we considered appropriate andaccording to the information and explanations given to us in the 'Annexure-B' on thedirections and sub-directions issued by Comptroller and Auditor General of India.

3. 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 Cash Flow Statement dealtwith by this Report are in agreement with the books of account;

(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 31 March2016 taken on record by the Board of Directors none of the Directors is disqualified ason 31 March 2016 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-C; and

(g) with respect to the other matters included in the Auditor's Report in accordancewith Rule 11 of the companies (Audit and Auditors) Rules 2014 in our opinion and to thebest 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 to Note 31 to the financial statements;

ii) the Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any-Refer Note 6 and 10 to the financialstatements;

iii) there has been no amount that is required to be transferred to the InvestorEducation and Protection Fund by the Company.

For D.S. Shukla & Co.
Chartered Accountants
(FRN No. 000773C)
Place : New Delhi Shreeharsh Shukla
Date : 26th May 2016 Partner
Membership No-408990

ANNEXURE - A TO INDEPENDENT AUDITORS’ REPORT OF EVEN DATE TO THE MEMBERS OFSCOOTERS INDIA LIMITED LUCKNOW ON THE ACCOUNTS OF THE COMPANY FOR THE YEAR ENDED 31STMARCH 2016

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year by ateam constituted by the management and no material discrepancies were noticed on suchverification. In our opinion the Management need to improve the periodicity and procedureof physical verification having regard to the size of the Company and the nature of itsassets.

(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) (a) As explained to us the company has conducted physical verification of thestores (excluding Inventory with third parties) as per the system of continuous physicalverification of the Inventory adopted during the year and finished goods and work inprogress at the end of the year which is considered to be reasonable.

(b) According to information and explanations given to us the discrepancies notice onphysical Verification of inventory conducted by the management from time to time ascompared to book records were not material and have been properly dealt with in the booksof accounts.

(iii) According to information and explanations given to us the Company has notgranted any loan Secured or unsecured to the companies firms limited liabilitypartnerships or other parties covered in register maintained under section 189 in the Act.

(iv) In our opinion and according to information and explanations given to us theCompany has not granted any loan investments guarantees and security covered undersection 185 or 186 of the Act accordingly clause (iv) of the order are not applicable tothe company for the year ended March 2016.

(v) The company has not accepted any deposits from the public.

(vi) The Central Government has not prescribed the maintenance of cost records undersection 148 (1) of the Act for the goods manufactured by the Company.

(vii) (a) As per records the Company is regular in depositing undisputed statutorydues including Provident Fund Employee State Insurance Sales Tax Service Tax CustomsDuty Excise Duty Value Added Tax Cess and any other statutory dues to the extentapplicable to it with the appropriate authorities and as informed no undisputed amountwere outstanding as at 31st March 2016 for a period of more than six monthsthe date of becoming payable except the following:

Sl. No. Name of the dues Nature of dues Period Amount (in Lakhs Rs.)
1 Kerala sales Tax Act State Sales Tax 92-9393-94 & 94-95 4.22
2. UP Commercial Tax Department UPVAT 2012-13 0.01
Total 4.23

(b) The disputed statutory dues aggregating Rs. 1091.71 lakhs and indeterminateinterest that have not been deposited on account of matters pending before appropriateauthorities are as under:

Sl. No. Name of the dues Nature of the dues Forum where dispute is pending Period Amount (In lakhs Rs.)
1. (a) State Sales Tax Act Entry Tax & Penalty Comm. of Commercial Tax 97-98 to 06-07 113.77
(b) State Sales Tax Act Entry Tax & Penalty Tribunal 03-0404-05 & 05-06 10.55
2. (a) Central Excise & Service Tax Service Tax Commissioner (Appeals) Oct.2002- Mar.2007 3.22 & 6.49 Penalty & Indeterminate Interest
(b) Central Excise & Service Tax Central Excise Additional Commissioner 2005-06 to 2008-09 2.16 & 2.16 Penalty & Indeterminate Interest
(c) Central Excise & Service Tax Central Excise Assistant Commissioner Apr.2009- Sept.2009 0.80 & 0.80 Penalty & Indeterminate Interest
(d) Central Excise & Service Tax Central Excise Assistant Commissioner Apr.2010- Sept.2010 0.74 & 0.74 Penalty & Indeterminate Interest
(e) Central Excise & Service Tax Central Excise Additional Commissioner 2005-06 to 2008-09 2.48 & 2.48 Penalty & Indeterminate Interest
(f) Central Excise & Service Tax Central Excise Tribunal Allahabad Aug.2008 to Mar.2013 1.10 & 1.10 Penalty & Indeterminate Interest
3. Income Tax Act Income Tax Dy. Commissioner of Income Tax Rang VI Lucknow FY 2001-02 to 2005-06 2010-11 & 2011-12 943.12
Total : 1091.71 & Indeterminate Interest

(viii) In our opinion and according to information and explanations given to us thecompany has not defaulted in repayment of dues to financial institutions or banks ordebentures holders except for the term loan provided by the Government of India which thecompany has not repaid as the matter is being taken up with the Department of HeavyIndustry for maintaining the status quo.

(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 however thecompany has raised term loan in earlier year which has been applied for the purpose forwhich they have been raised.

(x) Based upon the audit procedures performed and information given to us we reportthat no fraud on or by the company has been noticed or reported during the year bymanagement. However as explained to us by the management that in the Financial Year2008-09 Board of Directors revealed that a commercial agreement was executed by the thenCMD without the authority of the Board and after due consideration the Board decided torefer the matter of the appropriate authority for future action however no action on thesame was reported to us.

(xi) Being a Government Company pursuant to Notification No. G.S.R. 463(E) dated 5thJune 2015 issued by Government of India Provision of Section 197 of the Act are notapplicable to the company.

(xii) In our opinion and according to the informations and explanations given to usthe Company 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 notin compliance with Section 177 of the Act as the company has not formed on audit committeehowever the company has complied with Section 188 of the Act where applicable and detailsof such transactions have been disclosed in the financial statements as required by theapplicable accounting standards.

(xiv) According to information & 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.

(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)of the Order is not applicable.

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

For D.S. Shukla & Co.
Chartered Accountants
Firm Registration No.000773C
Place: New Delhi CA Shreeharsh Shukla
Date: 26th May 2016 Partner
M.No-408990

ANNEXURE B TO INDEPENDENT AUDITORS’ REPORT OF EVEN DATE TO THE MEMBERS OF SCOOTERSINDIA LIMITED LUCKNOW ON THE ACCOUNTS OF THE COMPANY FOR THE YEAR ENDED 31ST MARCH 2016

Directions under section 143(5) of Companies Act 2013

1. Whether the Company has clear title/lease deeds for freehold and leaseholder landrespectively? If not please state the area of freehold and leasehold for whichtitle/lease deeds are not available.

The company has clear title of lease hold land located in 16 Milestone at LucknowKanpur road measuring 147.50 acres vide lease hold agreement dated 5th Oct 1974 for theland of 125.29 acres and dated 10th August 1976 for the land of 22.209 acres with U.P.state Industrial department corporation Kanpur for a period of 90 Years.

2. Please report whether there are any cases of waiver/write off of debts/loans/interest etc. if yes the reasons there of and the amount involved.

As informed the company has been extended relief for conversion of interest bearingloan (Non Plan loan) provided by the government of India to zero interest bearing loan.Therefore the company has not made any default in the repayment of the loan outstanding& interest bearing. The GOI loans & interest are disclosed in Note No.45 of theFinancial Statement for the year ended 31st March 2016.

3. Whether proper records are maintained for inventories lying with third parties& assets received as gift from Govt. or other authorities.

Proper records have been maintained for such inventories which are lying with the thirdparties. However they are subject to adjustments if any on reconciliation as most of thebalances have not been confirmed. The same has been disclosed in Note No.34 of theFinancial Statement for the year ended 31st March 2016.

Sub-Direction under section 143(5) of Companies Act 2013

1. Employee Benefits

Independent verification may be made of information/inputs furnished to Actuary viznumber of employees average salary retirement age and assumptions made by the Actuaryregarding discount rate future cost increase mortality rate etc. for arriving at theprovision for liability of retirement benefits viz gratuity leave encashment postretirement me.

The Actuarial valuation has been carried out by an independent actuary & theliability has been determined for Gratuity & Leave Encashment in conformity with theprinciples set out in AS-15. The detail of the same has been disclosed in Note No.39 ofthe Financial Statement for the year ended 31st March 2016. Further the inputs furnishedto actuary were found correct.

For D.S. Shukla & Co.
Chartered Accountants
FRN No.000773C
Place: New Delhi CA Shreeharsh Shukla
Date: 26th May 2016 Partner
Membership No-408990

ANNEXURE C TO INDEPENDENT AUDITORS’ REPORT OF EVEN DATE TO THE MEMBERS OF SCOOTERSINDIA LIMITED LUCKNOW ON THE ACCOUNTS OF THE COMPANY FOR THE YEAR ENDED 31ST MARCH 2016

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 ScootersIndia Limited ('the Company') as of 31 March 2016 in conjunction with our audit of thefinancial 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 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 the Company's policies the safeguarding of its assetsthe prevention 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.

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 Companies 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 Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols 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 auditors' judgment including the assessment of the risk ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's 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 of records that in reasonable details 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 that receipts and expenditures of the Company are being made only inaccordance with authorizations of the 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 31 March 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 Institute of CharteredAccountants of India.

For D.S. Shukla & Co.
Chartered Accountants
FRN No.000773C
Place: New Delhi CA Shreeharsh Shukla
Date: 26th May 2016 Membership No-408990

Annexure-3

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6) (b) OFTHE COMPANIES ACT 2013 ON THE FINANCIAL STATEMENTS OF SCOOTERS INDIA LIMITED FOR THE YEARENDED 31st MARCH 2016.

The preparation of financial statements of Scooters India Limited for the year ended 31stMarch 2016 in accordance with the financial reporting framework prescribed under theCompanies Act 2013 is the responsibility of the management of the company. The Statutoryauditor appointed by the Comptroller and Auditor General of India under Section 139(5) ofthe Act is responsible for expressing opinion on the financial statements under section143 of the Act based on independent audit in accordance with the standards on auditingprescribed under section 143(10) of the Act. This is stated to have been done by them videtheir Audit Report dated 26 May 2016.

I on behalf of the Comptroller and Auditor General of India have decided not toconduct the supplimentary audit of the financial statements of Scooters India Limited forthe year ended 31 March 2016 under Section 143(6) (a) of the Act.

For and on the behalf of the Comptroller & Auditor General of India
(Suparna Deb)
Principal Director of Commercial Audit & Ex-Officio Member Audit Board - II New Delhi
Place : New Delhi
Date : 11.07.2016