Shreyans Industries Limited
Report on the Financial Statements.
1. We have audited the accompanying financial statements of Shreyans IndustriesLimited ('the Company') which comprise the Balance Sheet as at 31 March 2017 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
2. 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 maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand 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 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.
3. Our responsibility is to express an opinion on these financial statements based onour audit.
4. 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.
5. 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.
6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
8. 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 of the state of affairs of the Company as at 31March 2017 and its profit and its cash flows for the year ended on that date.
Emphasis of matter
9. We draw attention to note no. 41 relating to remuneration paid/provided in respectof Chairman and Managing Director and Vice-Chairman and Managing Director of the Companyin excess of the limits prescribed under section 197 read with schedule V of the CompaniesAct 2013 which is subject to the approval of Central Government. We have been informedthat as required by relevant provisions of the Companies Act 2013 company has filed therequisite documents with the Central Government for approval and same is awaited. Ouropinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
10.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 which forms part of this report a statement on thematters specified in paragraphs 3 and 4 of the Order.
11. 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. 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 March2017 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2017 from being appointed as a director in terms of sub-section (2) ofsection 164 of the Act; and
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- B; and
g. with respect to the other matters to be included in the
Auditor's Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to explanations given to us;
(i) the Company has disclosed the impact of pending litigations on its financialposition in its financial statements. Refer Note No. 30 to the financial statements;
(ii) the Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses;
(iii) there are no amounts required to be transferred to the Investor Education andProtection Fund by the Company.
(iv) the Company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8 November2016 to 30 December 2016 and these are in accordance with the books of account maintainedby the Company (Refer Note No. 47 of financial statements).
Annexure- A to the Auditors' Report
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the financial statements for the year ended 31 March 2017 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) According to information and explanations given to us the Company has adopted apolicy of physical verification of fixed assets once in a block of every three years. Thelast verification of entire block of fixed assets was done in the year ended 31 March2015. Further in our opinion the frequency of physical verification of the fixed assets isreasonable having regard to the size of the Company and the nature of its assets.
(c) According to information and explanations given to us and on the basis of ourexamination of records of the company the title deeds of immovable properties are held inthe name of the company.
(ii) (a) According to the information and explanations given to us the inventorieshave been physically verified by the management at the end of the year. In our opinion thefrequency of verification is reasonable.
(b) As per the information given to us the discrepancies noticed on physicalverification of inventories as compared to book records were not material and have beenproperly dealt with in the books of account.
(iii) According to the information and explanations given to us we report that theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnership or other parties covered in the register maintained under section189 of the Companies Act 2013. Therefore the provisions of paragraph (iii) (a) (b) and(c) of the Order are not applicable to the Company.
(iv) According to the information and explanations given to us the Company hascomplied with the requirements of the section 186 of the Companies Act 2013 pursuant toinvestments made. The company has not granted loans to directors or to the person in whomdirectors are interested. Therefore the provisions of the section 185 of the CompaniesAct 2013 are not applicable to the company.
(v) According to the information and explanations given to us the Company has compliedwith the directives issued by the Reserve Bank of India and the provisions of sections 73to 76 other relevant provisions of the Companies Act 2013 and the rules framed thereunder. According to the information and explanations given to us no order under theaforesaid sections has been passed by the Company Law Board or the Reserve Bank of Indiaor any Court or any other Tribunal on the Company.
(vi) We have broadly reviewed the books of account maintained by the company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148 of the Act and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. We have however not made a detailed examinationof such records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and on the basis ofthe records of the Company examined by us in our opinion the Company has been regular indepositing undisputed statutory dues including provident fund employees' state insuranceincome tax sales tax service tax duty of custom duty of excise value added tax cessand other statutory dues with the appropriate authorities. According to the informationand explanations given to us no undisputed amounts in respect of statutory dues payablewere outstanding as on the last day of the financial year concerned for a period of morethan six months from the date they became payable.
(b) According to the information and explanations there are no dues of income taxservice tax duty of custom which have not been deposited with the appropriateauthorities on account of any dispute. However according to information and explanationsgiven to us the following dues of duty of excise and value added tax has not beendeposited by the company on account of dispute:
|Sr. No. ||Name of the Statute ||Nature of Dues ||Period to which the amount relates ||Disputed Amount (Rs In lac ) ||Forum where dispute is pending. |
|1. ||Central Excise Act 1944 ||Excise Duty ||Various years from 2002-2003 to 2009-2010 ||944.02 ||Customs Excise & Service Tax Appellate Tribunal Chandigarh |
|2. ||Central Excise Act 1944 ||Excise Duty ||Various years from 1996-1997 to 2000-2001 ||0.53 ||Joint Commissioner Ludhiana |
|3. ||Central Excise Act 1944 ||Excise Duty ||2004-2005 ||1.43 ||Assistant Commissioner Phagwara |
(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to a financial institution bank orgovernment. The Company has not issued any debentures during the year or in the precedingyear.
(ix) In our opinion and according to the information and explanations given to us theterm loans taken during the year by the company have been applied for the purpose forwhich they were raised. The company has not raised money by way of initial public offer offurther public offer (including debt instruments) during the year.
(x) According to the information and explanations given to us no fraud on or 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 given to us and based on the recordof company the company has paid / provided for the managerial remuneration in accordancewith the requisite approvals mandated by the provisions of section 197 read with ScheduleV to the Act. Except pending approval in case of remuneration of Chairman and ManagingDirector and Vice-Chairman and Managing Director.
(xii) According to the information and explanations given to us the company is not aNidhi Company. Therefore the provisions of paragraph 3(xii) of the order are notapplicable.
(xiii) According to the information and explanations given to us and based on ourexaminations of the records of the company transactions with the related parties are incompliance with section 177 and section 188 of the Act where applicable and the detailsof the transactions have been disclosed in the financial statements as required by theapplicable accounting standards.
(xiv) According to the information and explanations given to us the company has notmade preferential allotment or private placement of shares or fully or partly convertibledebentures during the financial year under audit. Thus the provisions of paragraph 3 (xii)of the Order are not applicable.
(xv) According to 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 them. Accordingly provisions ofparagraph 3 (xv) of the Order are not applicable.
(xvi) According to the information and explanations given to us the company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.
Annexure- B to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
Report on the Internal Financial Controls
1. We have audited the internal financial controls over financial reporting of ShreyansIndustries Limited ("the Company") as of 31 March 2017 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India('ICAI'). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding 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 Companies Act 2013.
3. 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 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 was established and maintained and if suchcontrols operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
5. 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
6. 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 the maintenance of records that in reasonable detail 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 ac countingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
3. provide reasonable assurance regarding prevention or timely detection ofunauthorised 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
7. 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.
8. 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 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 S. C. VASUDEVA & CO. |
| ||Chartered Accountants |
| ||(Regn. No. 000235N) |
|Place : Ludhiana ||(SANJIV MOHAN) |
|Dated : May 15 2017 ||Partner |
| ||M. No. 086066 |