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Shanthi Gears Ltd.

BSE: 522034 Sector: Auto
NSE: SHANTIGEAR ISIN Code: INE631A01022
BSE LIVE 15:44 | 16 Oct 130.70 -0.25
(-0.19%)
OPEN

132.50

HIGH

133.80

LOW

130.05

NSE 15:40 | 16 Oct 130.55 -0.70
(-0.53%)
OPEN

131.50

HIGH

134.20

LOW

130.30

OPEN 132.50
PREVIOUS CLOSE 130.95
VOLUME 3127
52-Week high 167.60
52-Week low 93.40
P/E 47.01
Mkt Cap.(Rs cr) 1,068
Buy Price 0.00
Buy Qty 0.00
Sell Price 130.70
Sell Qty 459.00
OPEN 132.50
CLOSE 130.95
VOLUME 3127
52-Week high 167.60
52-Week low 93.40
P/E 47.01
Mkt Cap.(Rs cr) 1,068
Buy Price 0.00
Buy Qty 0.00
Sell Price 130.70
Sell Qty 459.00

Shanthi Gears Ltd. (SHANTIGEAR) - Auditors Report

Company auditors report

TO THE MEMBERS OF SHANTHI GEARS LIMITED

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Shanthi Gears Limited("the Company") which comprise the Balance Sheet as at March 31 2017 and theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.

Management’s Responsibility for the 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 Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed undersection 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial 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 Ind AS financial statements basedon our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe Ind AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompany’s preparation of the Ind AS financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company’s Directors as wellas evaluating the overall presentation of the Ind AS financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe 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 March 31 2017 and its profit total comprehensive Income its cash flows and thechanges in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit we

report to the extent applicable 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 Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 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 operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company’s internal financial controlsover financial reporting.

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 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts;

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

iv. The Company has provided requisite disclosures in the Ind AS financial statementsas regards its holding and dealings in Specified Bank Notes as defined in the NotificationS.O. 3407(E) dated the November 08 2016 of the Ministry of Finance during the periodfrom November 08 2016 to December 30 2016. Based on audit procedures performed and therepresentations provided to us by the management we report that the disclosures are inaccordance with the books of account maintained by the Company and as produced to us bythe Management.

2. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm’s Registration No. 008072S)
C.R.Rajagopal
Coimbatore Partner
03 May 2017 Membership No. 23418

ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements’ section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of ShanthiGears Limited ("the Company") as of March 312017 in conjunction with our auditof the Ind AS 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. 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 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.

Auditor’s 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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 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 (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2017 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm’s Registration No.008072S)
C.R. Rajagopal
Coimbatore Partner
03 May 2017 (Membership No. 23418)

ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 2 under "Report on Other Legal and RegulatoryRequirements" section of our report of even date)

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

b) Some of the fixed assets were physically verified during the year by the Managementin accordance with a programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.

c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed provided to us we reportthat the title deeds comprising all the immovable properties of land and buildings whichare freehold are held in the name of the Company as at the balance sheet date.

ii. As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on physicalverification.

iii. The company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013.

iv. The Company has not granted any loans made investments or provided guarantees andhence reporting under clause (iv) of the CARO 2016 is not applicable.

v. According to the information and explanations given to us the Company has notaccepted any deposit during the year to which the provisions of Sections 73 to 76 or anyother relevant provisions of Companies Act 2013 were applicable.

vi. The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013 for Gears and Accessories. We have broadlyreviewed the cost records maintained by the Company pursuant to the Companies (CostRecords and Audit) Rules 2014 as amended prescribed by the Central Government undersub-section (1) of Section 148 of the Companies Act 2013 and are of the opinion thatprima facie the prescribed cost records have been made and maintained. We have howevernot made a detailed examination of the cost records with a view to determine whether theyare accurate or complete.

vii. According to the information and explanations given to us in respect of statutorydues:

a. The Company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Employees’ State Insurance Income-tax Sales Tax ServiceTax Customs Duty Excise Duty Value Added Tax Cess and other material statutory duesapplicable to it to the appropriate authorities.

b. There were no undisputed amounts payable in respect of Provident FundEmployees’ State Insurance Income-tax Sales Tax Service Tax Customs Duty ExciseDuty Value Added Tax Cess and other material statutory dues in arrears as at March 312017 for a period of more than six months from the date they became payable.

c. Details of dues of Income-tax and Excise Duty which have not been deposited as onMarch 312017 on account of disputes are given below:

Name of the Statute Nature of Dues Forum where Dispute is pending Period to which the amount relates Amount involved (Rs Crores) Amount Unpaid (Rs Crores)
Central Excise Act 1944 Excise Duty on Inter-unit transfer of Machinery Jurisdictional Officer 2005-06 ' 0.76 Crores* ' 0.76 Crores
Income Tax Act 1961 Demand on Dividend distribution tax Joint Commissioner of Income tax Range III 2010-11 ' 0.03 Crores ' 0.03 Crores

* Excludes penalty

viii. The Company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued any debentures. Hence reporting under clause (viii)of CARO 2016 is not applicable to the Company.

ix. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe CARO 2016 Order is not applicable

x. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company and no material fraud on the Company by its officers oremployees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

xii. The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 Order is not applicable.

xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any noncash transactions with itsdirectors or persons connected with them and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

xvi. The Company is not required to be registered under section 45-I of the ReserveBank of India Act 1934.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm’s Registration No. 008072S)
C.R.Rajagopal
Coimbatore Partner
03 May 2017 Membership No. 23418