TO THE MEMBERS OF
SOLITAIRE MACHINE TOOLS LIMITED
Report on the Financial Statements
We have audited the accompanying standalone financial statements of SOLITAIRE MACHINETOOLS LIMITED which comprise the Balance Sheet as at 31st March 2017 the Statement ofProfit and Loss Cash Flow Statement for the year then ended and a summary of thesignificant 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 with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards referred under Section 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibilityalso includes the maintenance of adequate accounting records in accordance with theprovision of the Act for safeguarding of the assets of the Company and for preventing anddetecting the 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these standalone financial statementsbased 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 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 misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the stand alone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India;
a) In the case of the Balance Sheet of the state of affairs of the Company as at March31 2017
b) In the case of the Statement of Profit and Loss of the Profit' for the yearended on that date; and
c) In the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.
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 and on the basis of such checks of the books and records of the company as weconsidered appropriate and according to the information and explanations given to usduring the course of audit we give in the Annexure A' a statement on the mattersspecified in the paragraph 3 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 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 standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of 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 ofSection 164(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 overseparate 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 our 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.25 to the financial statements.
ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses.
iii. The company was not required to transfer any amount to the Investor Education andProtection Fund during the year and accordingly the question of delay does not arise. iv.The Company has provided requisite disclosures in the standalone financial statements asregards its holding and dealings in Specified Bank Notes as defined in Notification S.O.3407 (E) dated November8 2016 of the Ministry of Finance during the period from November8 2016 to December 30 2016. Based on the audit procedure performed and therepresentation provided to us by the management we report that disclosures are inaccordance with the books of account maintained by the company and as produced to us bythe management.
For AJMERA AJMERA AND ASSOCIATES
FIRM REGISTRATION NO.123989W
MEMBERSHIP NO. 010805
Annexure 'A' to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31st March 2017 wereport that:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.
(b) As per the information and explanations given to us physical verification of fixedassets has been carried out once during the year and no material discrepancies werenoticed on such verification. In our opinion the frequency of verification is reasonablehaving regard to the size of the company and nature of its business.
(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.
2. According to the information and explanations given to us the inventories have beenphysically verified at reasonable intervals by the management and there is no materialdiscrepancies were noticed.
3. 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 Act. Accordingly the provisions of clause 3 (iii) (a) to (c) of theOrder are not applicable to the Company.
4. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 & 186 of the act in respect ofinvestments guarantees & securities provided by it. Further the company has notgranted any loans to those who are covered by the provisions of section 185 & 186 ofthe act.
5. In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits from the public within the meaning of provisions ofSections 73 to 76 of the Act or any other relevant provisions of the Act and the rulesframed there under.
6. As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the company.
7. (a) According to the information and explanations given to us and the recordsexamined by us the company is generally regular in depositing with appropriateauthorities undisputed statutory dues including provident fund employees state insuranceincome-tax sales-tax service tax duty of customs duty excise value added tax cessand other statutory dues wherever applicable.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of income tax sales tax wealth tax service tax custom duty exciseduty cess were in arrears as at 31st March 2017 for a period of more than six months fromthe date they became payable.
(c) According to the information and explanations given to us the following dues ofcustom demands have not been deposited by the company on account of dispute:
|Name of the Statute ||Nature of the Dues ||Amount `. (Net of Payment) ||Period to which the amount relates ||Forum where dispute is pending |
|Central Excise Act1944 ||DGFT- penalty ||2300000 ||1999-2000 ||Writ No. 1957 of 2000 before Delhi High Court |
8. On the basis of our examination and according to the information and explanationsgiven to us the company has not defaulted in repayment of the dues to a bank with respectto its borrowings. The company has not borrowed any loans from Government financialinstitutions. Further the company has not issued any debentures.
9. Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans during the year.
10 Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
11 Based upon the audit procedures performed and the information and explanations givenby the management the managerial remuneration has been paid or provided in accordancewith the requisite approvals mandated by the provisions of section 197 read with ScheduleV to the Companies Act;
12 In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore the provisions of clause 4 (xii) of the Orderis not applicable to the Company.
13 In our opinion and according to the information and explanations given to us and onthe basis of examination of books and records of the company carried out by us all thetransactions with the related parties are in compliance with provisions of section 177 and188 of the act where applicable. The details there on has been disclosed in the financialstatements as required under Accounting Standards (AS-18- Related Party Disclosures)
14 According to the information and 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.
15 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 any non-cashtransactions with directors or persons connected with him. Accordingly the provisions ofclause 3 (xv) of the Order are not applicable to the Company.
16 In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company.
For AJMERA AJMERA AND ASSOCIATES
FIRM REGISTRATION NO.123989W
MEMBERSHIP NO. 010805
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF SOLITAIRE MACHINE TOOLS LIMITED
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 SOLITAIREMACHINE TOOLS LIMITED ("THE COMPANY") AS OF MARCH 31 2017 IN CONJUNCTION WITHOUR AUDIT OF THE STANDALONE FINANCIAL STATEMENTS OF THE COMPANY FOR THE YEAR ENDED ON THATDATE.
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 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 AUDITINVOLVES PERFORMING PROCEDURES TO OBTAIN AUDIT EVIDENCE ABOUT THE ADEQUACY OF THE INTERNALFINANCIAL CONTROLS SYSTEM OVER FINANCIAL REPORTING AND THEIR OPERATING EFFECTIVENESS. OURAUDIT OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING INCLUDED OBTAINING ANUNDERSTANDING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING ASSESSING THE RISKTHAT A MATERIAL WEAKNESS EXISTS AND TESTING AND EVALUATING THE DESIGN AND OPERATINGEFFECTIVENESS OF INTERNAL CONTROL BASED ON THE ASSESSED RISK. THE PROCEDURES SELECTEDDEPEND ON THE AUDITOR'S JUDGEMENT INCLUDING THE ASSESSMENT OF THE RISKS OF MATERIALMISSTATEMENT 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 MARCH 31 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 AJMERA AJMERA AND ASSOCIATES
FIRM REGISTRATION NO.123989W
MEMBERSHIP NO. 010805