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W S Industries (India) Ltd.

BSE: 504220 Sector: Engineering
NSE: WSI ISIN Code: INE100D01014
BSE LIVE 10:03 | 23 Oct 8.25 0.36
(4.56%)
OPEN

8.24

HIGH

8.25

LOW

8.24

NSE 12:21 | 23 Oct 8.60 0.75
(9.55%)
OPEN

8.00

HIGH

8.60

LOW

8.00

OPEN 8.24
PREVIOUS CLOSE 7.89
VOLUME 1700
52-Week high 14.00
52-Week low 6.49
P/E 0.36
Mkt Cap.(Rs cr) 17
Buy Price 8.28
Buy Qty 500.00
Sell Price 0.00
Sell Qty 0.00
OPEN 8.24
CLOSE 7.89
VOLUME 1700
52-Week high 14.00
52-Week low 6.49
P/E 0.36
Mkt Cap.(Rs cr) 17
Buy Price 8.28
Buy Qty 500.00
Sell Price 0.00
Sell Qty 0.00

W S Industries (India) Ltd. (WSI) - Auditors Report

Company auditors report

To

The Members of W.S. INDUSTRIES (INDIA) LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying Standalone financial statements of W.S. INDUSTRIES(INDIA) LIMITED ("the Company") which comprises the Balance Sheet as at 31March 2016 the Statement of Profit and Loss Cash Flow Statement for the year thenended and a summary of significant 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 ("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. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditor's 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 auditreport under 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 performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including th 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.

Because of the matter described in the Basis for Disclaimer Opinion paragraph we arenot able to obtain sufficient appropriate audit evidence to provide a basis for ouropinion.

Basis for Disclaimer of Opinion

(i) The books of accounts of the Company namely Cash vouchers bank vouchers purchasebills journal vouchers and other related documents were not made available to us for theperiod up to December 2015 and hence we were able to audit the books only for theremaining period.

(ii) Confirmation of Balances as at 31st March 2016 were not available for ourverification in respect of most of the banks and financial institutions.

(iii) Physical stock of inventory could not be carried out by us as at 31st March 2016and hence we are unable to give any opinion on the same.

Opinion

Because of the Significance of the matters specified in the Basis for Disclaimer ofOpinion Paragraph above we have not been able to obtain sufficient audit evidence toexpress an audit opinion on certain aspects of the financial statements.

Emphasis of Matter:

(i) We emphasise on the matter that the accumulated losses of the Company are more thanits networth and the company has been referred to BIFR seeking relief under revivalscheme.

(ii) There was no production in Chennai unit during the year and hence the unit cannotbe considered as going concern.

(iii) Interest has not been provided in the books for the loans availed from banks andother financial institutions during the year since the company is seeking relief as partof revival scheme by BIFR.

(iv) The Company has provided an amount equivalent to the Wages and salaries for theperiod from September 2015 (in case of Chennai unit) and from July 2015 (in the case ofVizag unit) till December 2015 only towards employee settlement. In view of the above noprovision has been made for PF and ESI for the September 2015 to March 2016 and July 2015to March 2016 for Chennai and Vizag units respectively.

(v) The disclosure under AS 15 in respect of retirement benefits has been obtained forthe period from April 2015 to August 2015 and from April 2015 to June 2015 for Chennai andVizag units respectively.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act we report that:

(a) As described in the Basis for Disclaimer of opinion paragraph above we have soughtbut were not able to obtain all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;

(b) For the reasons stated in the Point (i) of the Basis for Disclaimer of opinionparagraph above we are unable to opine whether proper books of accounts have been kept bythe Company for the said period as required by law.

(c) For the reasons stated in the Point (i) of the Basis for Disclaimer of opinionparagraph above we are unable to opine whether the Balance Sheet the Statement of Profitand Loss and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account;

(d) Due to the possible effects of the matter specified in the Basis for Disclaimer ofopinion paragraph above we are unable to opine whether the aforesaid Standalonefinancial statements comply with the Accounting Standards specified under Section 133 ofthe Act read with Rule 7 of the Companies (Accounts) Rules 2014.

(e) In view of the fact that the Company has not paid interest on the debentures asrequired under Section 164(2)(b) of the Companies Act 2013 the provisions of this sectionshall apply to the directors of the Company.

(f) The reservation relating to the maintenance of Books of accounts and other mattersconnected therewith are stated in the Basis for Disclaimer of Opinion paragraph above.

(g) 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 A".

(h) 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.

(ii) The Company did not have any long-term contracts including derivative contracts.

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

2. 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 B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

For M/s. S.VISWANATHAN LLP
Chartered Accountants
Regn No:004770S/S200025
Chella K Srinivasan
Place: Chennai Partner
Date : 30-5-2016 Membership number:023305

"Annexure A" to the Independent Auditor's Report of even date on theStandalone Financial Statements of W.S. INDUSTRIES (INDIA) 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 W.S.INDUSTRIES (INDIA) LIMITED ("the Company") as of March 31 2016 in conjunctionwith our audit of the Standalone financial statements of the Company for the year ended onthat date. •

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 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.

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 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 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.

Because of the matter described in the Disclaimer of opinion paragraph below we werenot able to obtain sufficient appropriate audit evidence to provide a basis for an auditopinion on internal financial controls over financial reporting of the Company.

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:

(i) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(iii) 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

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.

Disclaimer of Opinion

The system of internal financial controls over financial reporting with regard to thecompany were not made available to us to determine whether the company has establishedadequate internal financial control over financial reporting and whether such internalfinancial controls were operating effectively as at 31st March 2016.

We have considered the disclaimer reported above in determining the nature timing andextent of audit tests in our audit of the Standalone financial statements of the Companyand the disclaimer has affected our opinion on the Standalone financial statements of theCompany and we have issued a Disclaimer of opinion on the financial statements.

For M/s. S.VISWANATHAN LLP
Chartered Accountants
Regn No:004770S/S200025
Chella K Srinivasan
Place: Chennai Partner
Date : 30-5-2016 Membership number:023305

"Annexure B" to the Independent Auditors' Report of even date on theFinancial Statements of W.S. INDUSTRIES (INDIA) LIMITED.

Referred to in paragraph 1 under the heading 'Report on Other Legal & RegulatoryRequirement' of our report of even date:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) We are unable to form any opinion with regard to any material discrepancies on thephysical verification of fixed assets in the absence of any record for the verificationof the same as on the end of the financial period.

(c) We are informed that the title deeds of immovable properties are held in the nameof the company.

(ii) The management was not able to conduct the physical verification of inventory asat 31st March 2016 and the same cannot be opined upon.

(iii) In our opinion and according to the Information and explanations given to us theCompany has not granted loans secured or unsecured to companies firms Limited Liabilitypartnerships or other parties covered in the Register maintained under Section 189 of theAct. Accordingly clause (iii) (a) to (c) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us thecompany has not provided any loans investments guarantees and security under section 185and 186 of the Companies Act 2013.

(v) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.

(vi) According to information and explanations given to us the Central Government hasnot prescribed maintenance of cost records under sub- section (1) of section 148 of theCompanies Act 2013. .

(vii) (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company is not regular in depositingundisputed statutory dues including Provident Fund Employees State Insurance Income-TaxSales tax Service Tax Value added Tax Cess and any other statutory dues with theappropriate authorities. According to the information and explanations given to usundisputed amounts payable in respect of the above were in arrears as at March 31 2016for a period of more than six months from the date they became payable are given below:

s No. Nature of Dues Amount outstanding for more than six months (in Rs)
1. PROVIDENT FUND 17557621
2. EMPLOYEES' STATE INSURANCE 1849695
3. SALES TAX-VAT 2402394
4. SALES TAX-CST 1210931
5. SERVICE TAX 572165
6. TDS 27207907
7. TCS 74768
8. PROPERTY TAX 3068306
9. PROFESSIONAL TAX 1492817
10. GRATUITY TO LIC 35129658
TOTAL AMOUNT OUTSTANDING 90566262

(b) According to the information and explanations given to us the following dues ofIncome tax have not been deposited by the Company on account of dispute.

Name of Statue Nature of Dues Amount (in million (Rs) period to which the amount relates (Assessment year) Forum where dispute is pending
Income tax Act 1961 Income tax 0.40 1996-97 and 1997-98 High Court

(viii) In our opinion and according to the information and explanations given to usthe Company has defaulted in the repayment of dues to banks and financial institutions asbelow:

Name of the Bank /Financial institution Amount outstanding as at 31st March 2016 (in Million)
Edelweiss - Assigned by PNB 1022.95
Edelweiss - Assigned by IOB 396.03
Edelweiss Asset Reconstruction Company 397.50
Allium Finance Ltd 400.00
Edelweiss Security Receipts 249.62
Edelweiss - NCD 240.00
State Bank of India 162.15
Total 2868.25

(ix) In our opinion and according to the information and explanations given to us theCompany has not raised moneys by way of initial public offer or further public offerincluding debt instruments during the year and term loans were being used for the purposeit has been applied for.

(x) In our opinion and according to the information and explanations given to us theCompany has not noticed any fraud by the Company or any fraud on the Company by itsOfficers or employees or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has provided for managerial remuneration during the year in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theCompanies Act;

(xii) The Company is not a Nidhi Company. And hence complying with the provisions ofthe Nidhi Rules 2014 does not arise.

(xiii) In our opinion and according to the information and explanations given to usall transactions with the related parties are in compliance with Section 177 and 188 ofCompanies Act 2013 and the details have been disclosed in the Financial Statements asrequired by the applicable accounting standards.

(xiv) In our opinion and according to the information and explanations given to us thecompany fias not made any preferential allotment or private placement of shares or fullyor partly convertible debentures during the year under review. Accordingly the Clause(xiv) of the Order are not applicable to the Company.

(xv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly Clause (xv) of the Order are notapplicable to the Company.

(xvi) In our opinion the Company is not required to be registered under Section 45 IAof the Reserve Bank of India Act 1934 and accordingly Clause (xvi) of the Order are notapplicable to the Company.

For M/s. S.VISWANATHAN LLP
Chartered Accountants
Regn No:004770S/S200025
Chella K Srinivasan
Place: Chennai Partner
Date : 30-5-2016 Membership number:023305