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Suprajit Engineering Ltd.

BSE: 532509 Sector: Auto
NSE: SUPRAJIT ISIN Code: INE399C01030
BSE 15:40 | 16 Jan 304.60 -8.60
(-2.75%)
OPEN

312.40

HIGH

315.00

LOW

300.00

NSE 15:56 | 16 Jan 305.20 -9.55
(-3.03%)
OPEN

315.05

HIGH

315.05

LOW

299.20

OPEN 312.40
PREVIOUS CLOSE 313.20
VOLUME 8309
52-Week high 348.50
52-Week low 184.40
P/E 55.08
Mkt Cap.(Rs cr) 4,261
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 312.40
CLOSE 313.20
VOLUME 8309
52-Week high 348.50
52-Week low 184.40
P/E 55.08
Mkt Cap.(Rs cr) 4,261
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Suprajit Engineering Ltd. (SUPRAJIT) - Auditors Report

Company auditors report

To

The Members of SUPRAJIT ENGINEERING LIMITED Report on the Standalone FinancialStatements

We have audited the accompanying standalone financial statements of SuprajitEngineering Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Profit and Loss Statement and the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").

Management's Responsibility for the Standalone 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 standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 and the Companies (Accounting Standards) Amendment Rules2016.

This responsibility also includes the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting the 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 standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditors' Responsibility

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 accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions 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 performingprocedures to obtain audit evidence about the amounts and the disclosures in thestandalone financial statements. The procedures selected depend on the auditor's judgmentincluding the assessment of the risks of material misstatement of the standalone 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 a true and fair view in order to design audit proceduresthat are appropriate in the circumstances.Anauditalsoincludesevaluatingtheappropriatenessof the accounting policies used and the reasonableness of the accounting estimates made bythe Company's Directors as well as evaluating the overall presentation of the standalonefinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

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 of the state of affairs of the Companyas at 31st March 2017 and its profit and its cash flows for the year ended on that date.

Other Matter

We did not audit the financial statements of erstwhile Phoenix Lamps Limited (the"Transferor Company") included in the financial statements pursuant toamalgamation with the Company (Refer Note 23.5 of this standalone financial statements)which constitute total assets of ` 2551.25 million as at 31st March 2017 total revenue(including other income) of ` 2366.21 million and net cash outflows of ` 0.52 million forthe year then ended as considered in the standalone financial statements. The financialstatements and other financial information of the Transferor Company have been audited byother auditors whose reports have been furnished to us and our opinion on these financialstatements in so far as it relates to the amounts and disclosures included in respect ofthe Transferor Company is based solely on the report of such other auditors.

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 section 143(11) of the Act and onthe basis of such checks of the books and records of the Company as we consideredappropriate and according to the information and explanations given to us we give in the ‘AnnexureA' a statement on the matters specified in the paragraph 3 and 4 of the said Order tothe extent applicable

2. As required by Section 143 (3) of the Act we report that: a. We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; b. In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; c. The Balance Sheet the Profit and Loss Statement and theCash Flow Statement dealt with 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 and the Companies (Accounting Standards) Amendment Rules2016; e. On the basis of the written representations received from the directors as on31st March 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 of Section164 (2) of the Act. f. With respect to the adequacy of the internal financials controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate report in ‘Annexure B'; and g. With respect to the othermatters 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 our information andaccording to the explanations given to us: i. the Company has pending litigationsdisclosed as contingent liabilities in its Note No.23.6.1 to the standalone financialstatements the impact if any on the final settlement of these litigations is notascertainable at this stage; ii. the Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses; iii.there were no delays in transferring undisputed amounts which were required to betransferred to the Investor Education and Protection Fund by the Company during the yearand iv. the Company has provided requisite disclosure in note no. 23.15 of its standalonefinancial statements as to holdings as well as dealings in Specified Bank Notes during theperiod from November 8 2016 to December 30 2016 and these are in accordance with thebooks of account maintained by the Company.

For VARMA & VARMA
Chartered Accountants
FRN 004532S
R KESAVADAS
Place: Bengaluru Partner
Date : September 13 2017 M. No. 23862

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING ‘REPORT ON OTHER LEGAL ANDREGULATORY

REQUIREMENTS' OF OUR INDEPENDENT AUDIT REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL

STATEMENTS OF SUPRAJIT ENGINEERING LIMITED FOR THE YEAR ENDED 31ST MARCH2017

(i) (a)

As stated in Note No. 23.4 to the standalone financialstatement the fullparticulars giving quantitative details and situation of fixed assets are maintained inthe ERP system in respect of additions made after 1st April 2008 however certainparticulars requires to be updated. The particulars of fixed assets acquired prior to thisdate have been updated in the ERP system in a summarised format. However item wiseparticulars are available for major assets in manual form. (b) We are informed by themanagement that most of the fixed assets of the Company are being physically verified inaccordance with a programme which in our opinion is reasonable having regard to the sizeand nature of its assets. According to the information and explanations given to usmaterial discrepancies identified on such verification when compared with availablerecords have been properly dealt within the books of account.

(c) According to the information and explanations given to us and as per verificationof the records of the Company the title deeds of the immovable properties included in theproperty plant and equipment are held in the name of the Company. As stated in note no.4.1.3 4.1.4 5.1.2 to 5.1.4 of the standalone financial statements the immovableproperties are mortgaged for availing credit facilities from banks and financialinstitution. (ii) According to the information and explanation given to us and as per ourverification of the records of the Company the management has conducted physicalverification of inventory at reasonable intervals during the year and the discrepancies ofmaterial nature noticed on physical verification by the management have been properlydealt with in the books of account during the year.

(iii) According to the information and explanations given to us the Company has notgranted loans secured or unsecured to companies firms limited liability partnershipsor other parties covered in the register maintained under section 189 of the Act exceptto the extent of ` 108.86 million loan given to a body corporate (wholly owned foreignsubsidiary) in respect of which ` 108.53 million has been repaid by such body corporateduring the year as mentioned in Note no. 23.17(a) of the standalone financial statements.Based on our verification of books and records of the Company in our opinion the termsand conditions of such loan are not prejudicial to the interest of the Company. Sincethere are no repayment terms agreed upon with the borrower we have not commented upon theregularity of the repayment of principal and interest and as a result there are no amountsoverdue as on 31st March 2017.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of the section 185 and 186 of the Act in respectof the investments made loans granted guarantees given and securities provided by theCompany.

(v) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the rules framed thereunder applicable to theCompany. According to the information and explanations given to us in respect of suchdeposits there are no directives issued by the Reserve Bank of India which requires to becomplied with by the Company. (vi) We have broadly reviewed the books of account andrecords maintained by the Company pursuant to the Rules made by the Central Governmentfor the maintenance of cost records under Section 148(1) of the Companies Act 2013 andare of the opinion that prima facie the prescribed accounts and records have been madeand maintained. We have however not made a detailed examination of the records with aview to determining whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and as per ourverification of the records of the Company the Company has been fairly regular indepositing undisputed statutory dues including Provident fund Employee's State InsuranceIncome Tax Sales Tax Custom Duty Excise Duty Service Tax Value Added Tax Cess andother statutory dues with the appropriate authorities during the year to the extentapplicable. There are no arrears of undisputed statutory dues of a material natureoutstanding as at the last day of the financial year for a period of more than six monthsfrom the date on which they became payable.

(b) According to the information and explanations given to us and as per ourverification of the records of the Company the following disputed amounts of tax/ dutyhave not been deposited with appropriate authorities as at 31st March 2017:

Name of the Statute Nature of the dues Amount (` in millions) Period (financial year) to which the amount relates to Forum where dispute is pending
Maharashtra VAT
Act 2002 # Value Added Tax 31.65* 2006-07 Joint Commissioner of Sales Tax (Appeals)
Central Sales Tax Act1956 # Central Sales Tax 2.10* 2006-07 Joint Commissioner of Sales Tax (Appeals)
Maharashtra VAT Act 2002 # Value Added Tax 31.09* 2008-09 Deputy Commissioner of Sales Tax(Appeals)
Maharashtra VAT Act 2002 # Value Added Tax 24.78* 2009-10 Joint Commissioner of Sales Tax (Appeals)
Central Sales Tax Act1956 # Central Sales Tax 3.89* 2009-10 Joint Commissioner of Sales Tax (Appeals)
Income Tax Act1961 Income Tax 4.52** 2009-10 (AY 2010-11) Commissioner of Income Tax (Appeals)

 

Name of the Statute Nature of the dues Amount (` in millions) Period (financial year) to which the amount relates to Forum where dispute is pending
Income Tax Act1961 Income Tax 3.24 2010-11 (AY 2011-12) Commissioner of Income Tax (Appeals)
Income Tax Act1961 Income Tax 2.19 2012-13 (AY 2013-14) Dispute Resolution Panel
Finance Act 1994 Service Tax 0.11 2015-16 Customs Excise & Service tax Appellate Tribunal
Central Sales Tax Act 1956 Pending C Forms 0.23 FY 2006-07 & 2008-09 Deputy Commissioner of Assessment Uttarakhand
Delhi Sales Tax Act 1975 Sales tax demand Penalty against 0.08 FY 1994-95 D.C. Appeal IV Delhi
Superintendent Service Tax Range-XVII
Finance Act 1994 service tax 0.04 FY 2008-09 &
demand 2012-13 Division-IV Noida
Finance Act 1994 Penalty against service tax demand 1.03 FY 2009-10 & 2010-11 CESTAT New Delhi
Total 104.95

* includes ` 3.60 million paid under protest in respect of such demand.

** ` 4.52 million adjusted against earlier year's refund.

# a stay order has been received against the amount disputed and not deposited.

(The above does not include demands in relation to General Lighting business which wassold by the Transferor Company on August 30 2013 and any statutory liabilities relatingto such business will be borne by buyer in accordance with the Business Transfer signedby the Transferor Company and the buyer.) (viii) According to the information andexplanations given to us and as per our verification of the records of the Company theCompany has not defaulted in repayment of its dues to the banks and financial institution.The Company did not have any outstanding debentures and loan from government during theyear end.

(ix) According to the information and explanation given to us and as per ourverification of records of the Company the Company has not raised money by way of initialpublic offer or further public offer (including debt instrument) during the year.According to the information and explanations given to us and as per our verification ofthe records of the Company the Company has utilised the monies raised by way of termloans for the purposes for which those were raised. (x) According to the information andexplanations given to us and as per our verification of records of the Company nomaterial fraud either by the Company or on the Company by its officers and employees hasbeen noticed or reported during the year.

(xi) According to the information and explanations given to us and as per ourverification of records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions of theSection 197 read with Schedule V of the Act.

(xii) In our opinion and according to the information given to us the Company is not aNidhi company. Accordingly paragraph 3(xii) of the Order is not applicable and hence notcommented upon.

(xiii) According to the information and explanations given to us and as per ourverification of records of the Company transactions with the related parties are incompliance with the sections 177 and 188 of the Act and details of such transactions havebeen disclosed in the standalone financial statements as required by the applicableAccounting Standards.

(xiv) According to the information and explanations given to us and as per ourverification of records of the Company the Company has not made preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year. TheCompany had raised the funds from private placement during the previous year and asexplained by the management in Note no 2.1.3(a) to the standalone financial statements andas per our verification of records of the Company amounts raised during the previous yearthat were pending utilization as at the end of the previous year prima facie have beenutilised for the purpose for which funds were raised.

(xv) According to the information and explanations given to us and as per ourverification of records of the Company the Company has not entered into non-cashtransactions with the directors or persons connected with the directors. Accordinglyparagraph 3 (xv) of the Order is not applicable. (xvi) According to the information andexplanations given to us the Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

For VARMA & VARMA
Chartered Accountants
FRN 004532S
R KESAVADAS
Place: Bengaluru Partner
Date : September 13 2017 M. No. 23862

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

ANNEXURE REFERRED TO IN PARA 2 (F) "REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS" OF THE

INDEPENDENT AUDITOR'S REPORT OF REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE(I) OF

SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013 ("THE ACT")

We have audited the internal financial controls over financial reporting of SuprajitEngineering 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 (‘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.

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 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 audit involves performing procedures on test check basis to obtain audit evidenceabout the adequacy of the internal financial controls system over financial reporting andtheir operating effectiveness. Our audit of internal financial controls over financialreporting included obtaining an understanding of internal financial controls overfinancial reporting assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto 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.

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 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 ICAI.

For VARMA & VARMA
Chartered Accountants
FRN 004532S
R KESAVADAS
Place: Bengaluru Partner
Date : September 13 2017 M. No. 23862