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Tarapur Transformers Ltd.

BSE: 533203 Sector: Engineering
NSE: TARAPUR ISIN Code: INE747K01017
BSE LIVE 14:39 | 15 Dec 6.98 0.33
(4.96%)
OPEN

6.61

HIGH

6.98

LOW

6.61

NSE 15:29 | 15 Dec 7.20 0.30
(4.35%)
OPEN

7.00

HIGH

7.20

LOW

6.90

OPEN 6.61
PREVIOUS CLOSE 6.65
VOLUME 880
52-Week high 11.25
52-Week low 5.40
P/E
Mkt Cap.(Rs cr) 14
Buy Price 6.98
Buy Qty 1745.00
Sell Price 0.00
Sell Qty 0.00
OPEN 6.61
CLOSE 6.65
VOLUME 880
52-Week high 11.25
52-Week low 5.40
P/E
Mkt Cap.(Rs cr) 14
Buy Price 6.98
Buy Qty 1745.00
Sell Price 0.00
Sell Qty 0.00

Tarapur Transformers Ltd. (TARAPUR) - Auditors Report

Company auditors report

TO THE MEMBERS OF TARAPUR TRANSFORMERS LIMITED Report on the Financial Statements

We have audited the accompanying financial statements of TARAPUR TRANSFORMERSLIMITED ("the Company") which comprise the Balance sheet as at March 312017 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Management is responsible for the matters stated in section 134(5)of the Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial 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 Indian Accounting Standards specified in theCompanies (Accounts) Rules 2015 ( as amended ) under Section 133 of the Act

These responsibilities also includes the maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding of the assets of the Company andfor 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 orderly and efficientconduct of its business including adherence to company’s policies 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.

Auditor’s 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 specified undersection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those Standards and pronouncements requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.

An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of the accounting estimates made by Company’s directors as wellas evaluating the overall presentation 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.

Basis for Qualified Opinion

(a) With regard to pending confirmation of balances of trade receivable. sTheCompany has sent letters to customers in respect of trade receivables for confirmingbalances as at March 31 2017 but in most of the cases the customers have not sentwritten confirmation confirming the balance outstanding as at March 31 2017. In theabsence of confirmation any provision to be made for adverse variation in the carryingamounts of trade receivable is not quantified.

(b) With regard to unsecured loans given to any party not covered in the registermaintained under section 189 of the Companies Act 2013

The Company has sent balance confirmation letters to parties who are not covered in theregister maintained under section 189 of the Companies Act 2013 but in most of the casesthe company have not received written confirmation confirming the balance outstanding asat March 31 2017. Further in respect of loans granted repayment of the principal amountwas not as stipulated and payment of interest has also not been regular.

(c) Regarding non provision of interest on various loans availed from Canara Bank forthe Financial year 2016-2017

The Company has not provided for Interest payable to Canara Bank amounting to Rs.738.50Lacs for the year ended 31st March 2017. The Company has also not made any provision forpenal interest claimed by the bank. As a result the loss for the year ended 31st March2017 is understated by Rs 738.50 Lacs & current liabilities as at 31st March 2017 arealso understated by Rs.738.50 Lacs and reserves are overstated by Rs. 738.50 Lacs.

(d) Regarding non provision of interest on loans availed from Dhanlaxmi Bank for theFinancial year 2016-2017 The Company has not provided for interest payable toDhanlaxmi Bank amounting to Rs.31.55 Lacs. for the year ended 31st March 2017. As a resultthe loss for the year ended 31st March 2017 is understated by Rs. 31.55 Lacs & currentliabilities as at 31st March 2017 are also understated by Rs. 31.55 Lacs and reserves areoverstated by Rs. 31.55Lacs.

(e) With regarding Physical verification of Inventory:

The company has not conducted periodic physical verification of inventory at reasonableintervals.

In respect of traded stock at Mumbai Head Office the details of finished goods stockstorage location not available for our verification.

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 matters described in the basis for qualifiedopinion paragraph the aforesaid 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 March 31 2017 and its profit and its cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") as amended issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order.

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 Statement of profit and Loss and Cash Flow Statement dealt withby this report are in agreement with the books of account. (d) Except for the effectsof the matters described in the basis for qualified opinion paragraph in our opinionthe Balance Sheet the Statement of Profit and Loss comply with the Accounting Standardsspecified 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 the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

(g) With respect to the other matters included in the Auditor’s Report inaccordance with Rule 11 of the

Companies (Audit and Auditors) Rules 2014 in our opinion and to our best of ourinformation and according to the explanations given to us:

(h) The company has disclosed the impact of pending litigations on its financialposition in its financial statements –Refer Note 25 to the financial statements;

(i) The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

(j) There has been no delay in transferring amount required to be transferred to theInvestors Education and Protection Fund by the Company.

(k) The Company has provided requisite disclosures in the financial statements asdealings in Specified Bank Notes during the period from 8th November 2016 to31st December 2016 on the basis of information available with the Company.Based on audit procedures and relying on management’s representation we report thatdisclosures are in accordance with the books of accounts maintained by the Company and asproduced to us by the Management – Refer Note 14 to the financial statements.

For RAMAN S.SHAH & ASSOCIATES

CHARTERED ACCOUNTANTS

(CA Raman S. Shah)

M.No.33272

PARTNER

Firm Registration No.: 119891W

Place: Mumbai

Date: 30th May 2017

ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT

In the Annexure as required by the Companies (Auditor’s Report) Order 2015issued by the Central Government in terms of Section 143 (11) of the Companies Act 2013on the basis of checks as we considered appropriate we report on the matters specifiedin paragraph 3 and 4 of the said order to the extent applicable to the Company. i. (a) TheCompany is maintaining proper records showing full particulars including quantitativedetails and situation of fixed assets. (b) The fixed assets are physically verified bythe Management according to a phased programme designed to cover all the items over aperiod of three years which in our opinion is reasonable having regard to the size ofthe Company and the nature of its assets. Pursuant to the programme a portion of thefixed assets has been physically verified by the Management during the year and nomaterial discrepancies have been noticed on such verification.

(c) The title deeds of immovable properties as disclosed in Note 8 on fixed assets tothe financial statements are held in the name of the Company.

ii. The company has not conducted periodic physical verification of inventory atreasonable intervals. In respect of traded stock at Mumbai Head Office the details oftraded stock storage location not available for our verification.

iii. The Company has not granted unsecured loans to any companies covered in theregister maintained under Section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of the loans and investments made and guarantees and security provided by it.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from the public and therefore the provisions containedin Sections 73 to 76 of the Act and Rules framed there under and any directive issued bythe Reserve Bank of India are not applicable to the Company.

vi. As per information and explanation given by the management the company hasmaintained cost records as specified under Section 148(1) of the Act. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

vii. According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally irregular in depositingthe undisputed statutory dues including Service Tax Income Tax Sales tax ProfessionalTax etc. (a) Following are the dues which are due since more than six months but still notpaid or paid at later dates.

Nature of Statute Natures of Dues Amount Period to which Date of Payment the amount relates
(Rs. in Lacs)
Central Sales Tax Act CST 0.27 F.Y.2013-14 Still not paid
Central Sales Tax Act CST-Interest 2.10 F.Y.2013-14 Still not paid

b) According to the records of the Company Income-Tax which have not been deposited onaccount of disputes and the Forum where the dispute is pending are as under:

Nature of Statute Financial Year Nature of Dues Pending Amount (Rs. in Lacs) Forum Where Dispute is pending
Sales Tax Act F.Y. 2008-2009 Sales Tax Demands pending in appeals 128.11 D.C. APPEAL - PALGHAR
Sales Tax Act F.Y. 2011-2012 Sales Tax Demands pending in appeals 8.38 D.C. APPEAL - PALGHAR
Income Tax Act F.Y.2008-09 Income Tax Demands including interest which is under dispute and pending in appeals 0.35 CIT APPEAL -II FILED
Income Tax Act F.Y.2011-12 Income Tax Demands including interest which is under dispute and pending in appeals 61.73 CIT APPEAL -II FILED

viii Based on our Audit Procedures and as per the information and explanation given bymanagement the company has defaulted in repayment of dues to banks. The detail of periodand amount of default as ascertained by management is as follows:

Name of the Bank Nature of dues Amount (Rs. Lacs) Due Date Date of Payment
Dhanlaxmi Bank Ltd. Principal and Interest 192.01 Various Dates Not paid
Canara Bank Cash Credit facility Over Draft facility and Interest 3370.05 Various Dates Not paid

ix. In our opinion and according to the information and explanations given to us noterm loans raised during the year. The company did not raise any money by way of publicoffer or further public offer (including debt instruments) during the year.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. According to the information and explanations given to us and based on ourexaminations of the records of the company the company has paid/ provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

xii. In opinion and according to information and explanations given to us the Companyis not a Nidhi Company and the Nidhi Rules 2014 are not applicable to it the provisionsof Clause 3(xii) of the Order are not applicable to the Company.

xiii. According to the information and explanations given to us and based on ourexaminations of the records of the company the Company has entered into transactions withrelated parties in compliance with the provisions of Sections 177 and 188 of the Act. Thedetails of such related party transactions have been disclosed in the financial statementsas required under Accounting Standard (AS) 18 Related Party Disclosures specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

xiv. According to the information and explanations given to us and based on ourexaminations 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 under review. Accordingly the provisions of Clause 3(xiv) of the Order are notapplicable to the Company.

xv. According to the information and explanations given to us the Company has notentered into any non cash transactions with its directors or persons connected with him.Accordingly the provisions of Clause 3(xv) of the Order are not applicable to theCompany.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For RAMAN S.SHAH & ASSOCIATES

CHARTERED ACCOUNTANTS

(CA Raman S. Shah)

M.No.33272

PARTNER

Firm Registration No.: 119891W

Place: Mumbai

Date: 30th May 2017

ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act

We have audited the internal financial controls over financial reporting of TarapurTransformers Ltd. ("the Company") as of March 31 2017 in conjunction with ouraudit 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). 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 assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

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 deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls 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 qualified audit opinion on the Company’s internal financialcontrols system 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 the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company’s assets that could have a material effect on thefinancial 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.

Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing weaknesses have been identified as at March 31 2017.

a) The Company did not have an appropriate internal audit system.

b) The Company did not have an appropriate internal control system for inventory withregard to periodic verification of stock.

In our opinion except for the possible effects of the weakness described above theCompany has in all material respects an adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2017 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.

For RAMAN S.SHAH & ASSOCIATES

CHARTERED ACCOUNTANTS

(CA Raman S. Shah)

M.No.33272

PARTNER

Firm Registration No.: 119891W

Place: Mumbai

Date: 30th May 2017