Sharat Industries Ltd.
|BSE: 519397||Sector: Others|
|NSE: SHARTSEFOD||ISIN Code: INE220Z01013|
|BSE 05:30 | 01 Jan||Sharat Industries Ltd|
|NSE 05:30 | 01 Jan||Sharat Industries Ltd|
|BSE: 519397||Sector: Others|
|NSE: SHARTSEFOD||ISIN Code: INE220Z01013|
|BSE 05:30 | 01 Jan||Sharat Industries Ltd|
|NSE 05:30 | 01 Jan||Sharat Industries Ltd|
To The Members of SHARAT INDUSTRIES LIMITED
I. Report on the Financial Statements
We have audited the accompanying financial statements of SHARAT INDUSTRIES LIMITED("the Company") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
II. 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 preparationand 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 of the assets of theCompany and for preventing and detecting the frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial 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.
III. 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 issued by theInstitute of Chartered Accountants of India as specified under section 143(10) of theAct. Those Standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditors'judgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorsconsider internal financial control relevant to the Company's preparation of the financialstatements that give true and fair view in order to design audit procedures that areappropriate in the circumstances but not for the purpose of expressing an opinion onwhether the Company has in place an adequate internal financial control system overfinancial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by 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 qualified audit opinion on the financial statements.
IV. Basis for Qualified Opinion
In respect of Post Retirement Benefits viz. Gratuity as per Accounting Standard-15issued by the Institute of Chartered Accountants of India the Company should makeprovision on actuarial basis every year towards liability for future payment of gratuity.However during the year provision for gratuity has been made on adhoc basis. Suchcreation of provision is not in accordance with the Accounting Standard referred above. Inthe absence of details we are unable to comment on the effect of such provision on theprofits for the year gratuity liability and net worth of the Company.
In respect of a few creditors and advances recoverable there are neither confirmationsof the year-end balances nor reconciliation of the accounts. In the absence of suchconfirmations / reconciliations we are unable to comment on the effect of such accountson the profit of the Company for the year year-end balances of trade creditors andadvances recoverable and on the net worth of the Company.
V. Qualified Opinion
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the 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 of the state of affairs of the Company as at March31 2017 its Profit and its cash flows for the year ended on that date.
V. 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 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) Except for the effects / possible effects of the matter described in the Basis forQualified Opinion paragraph in our opinion the aforesaid financial statements complywith the Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014;
e) On the basis of the written representations received from the directors as on March31 2016 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 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 controls over financialreporting of the Company and the operating effectiveness of such controls referred to ourseparate report in "Annexure B'; 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 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 No. 34 to the financial statements
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses under the applicable law or accountingstandards.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
"ANNEXURE - A" TO THE INDEPENDENT AUDITORS' REPORT OF SHARAT INDUSTRIESLIMITED
In terms of the information and explanations sought by us and given by the Company andthe books and records examined by us in the normal course of audit and to the best of ourknowledge and belief we state that: -
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) All the fixed assets have been physically verified during the year by theManagement in accordance with a regular programme of verification which in our opinionprovides for physical verification of all the fixed assets at reasonable intervals.According to the information and explanations given to us no material discrepancies werenoticed on such verification.
(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) In respect of inventories:
a. The Inventory has been physically verified at reasonable intervals during the yearby the management. In our opinion the frequency of verification is reasonable.
b. There are no material discrepancies noticed on physical verification between thephysical stock and the book records.
iii) In respect of loans secured or unsecured granted to companies firms limitedliability partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013:
The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the Register maintained under section 189 of the Companies Act2013. Accordingly the provisions of clause 3 (iii) (a) (b) and (c) of the Order are notapplicable to the Company and hence not commented upon.
iv) In respect of loans investments guarantees and security given
The Company has complied with the provisions of Section 185 and 186 of the Act withrespect to the loans and investments made.
v) In respect of public deposits :
The Company has not accepted any deposits from the public. Therefore the provisions ofsection 73 and 76 of the Companies Act 2013 and the Companies (Acceptance of Deposits)Rules 2014 (as amended) with regard to the deposits accepted from the public and from themembers are not applicable to the Company.
vi) In respect of cost records :
The Central Government of India has not prescribed the maintenance of cost recordsunder section 148 (1) of the Companies Act 2013 for any of the services rendered by theCompany.
vii) In respect of statutory dues :
a) The Company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Income Tax VAT Service Tax and other material statutory duesapplicable to it with appropriate authorities during the year. There were no undisputedamounts payable in respect of the aforesaid statutory dues outstanding as at March 312016 for a period of more than six months from the date they became payable.
b) There are no dues of Provident Fund Income Tax VAT Service Tax as at March 312016 which have not been deposited on account of a dispute except the following
viii) In respect of repayment of dues to banks financial institutions and debenturesholders:
The Company has not issued any debentures. In respect of dues to banks and financialinstitutions the Company is generally regular in adhering to the terms of repayment.
ix) In respect of moneys raised by way of initial public offer:
The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments). The term loans received during the year have beenapplied for the purposes for which they were drawn.
x) In respect of frauds:
No material fraud by the Company or on the Company by its officers or employees hasbeen noticed or reported during the course of audit.
xi) In respect of managerial remuneration:
The Company has paid / provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.
xii) In respect of Nidhi Company:
The Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.
xiii) In respect of transactions with related parties:
All transactions with related parties are in compliance with Sections 177 and 188 ofthe Companies Act 2013 where applicable and details of such transactions have beendisclosed in the Financial Statements etc. as required by the applicable accountingstandards.
xiv) In respect of preferential allotment or private placement of shares or fully orpartly convertible debentures:
The Company has not made any preferential allotment or private placement of shares offully or partly convertible debentures during the year.
xv) In respect of non-cash transactions with directors:
The Company has not entered into any non-cash transactions with directors or personsconnected with him hence this clause is not applicable.
xvi) In respect of registration under section 45-IA of the Reserve Bank of India Act1934:
The Company is not required to be registered under section 45-IA of the Reserve Bank ofIndia Act 1934.
"ANNEXURE - B" TO THE INDEPENDENT AUDITORS' REPORT OF SHARAT INDUSTRIESLIMITED
I. Report on the Internal Financial Controls under Clause (i) of sub-section 3 ofSection 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of SHARATINDUSTRIES 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.
II. 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"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
III. 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") and the Standards on Auditing issued by ICAI and deemedto be prescribed under Section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and 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 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.
IV. Meaning of Internal 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.
V. 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 March 31 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.