You are here » Home » Companies » Company Overview » Walchandnagar Industries Ltd

Walchandnagar Industries Ltd.

BSE: 507410 Sector: Engineering
NSE: WALCHANNAG ISIN Code: INE711A01022
BSE LIVE 15:58 | 15 Dec 224.35 1.15
(0.52%)
OPEN

224.00

HIGH

228.00

LOW

223.45

NSE 15:49 | 15 Dec 224.10 0.60
(0.27%)
OPEN

226.00

HIGH

228.10

LOW

223.20

OPEN 224.00
PREVIOUS CLOSE 223.20
VOLUME 55091
52-Week high 272.90
52-Week low 132.80
P/E
Mkt Cap.(Rs cr) 854
Buy Price 224.35
Buy Qty 597.00
Sell Price 0.00
Sell Qty 0.00
OPEN 224.00
CLOSE 223.20
VOLUME 55091
52-Week high 272.90
52-Week low 132.80
P/E
Mkt Cap.(Rs cr) 854
Buy Price 224.35
Buy Qty 597.00
Sell Price 0.00
Sell Qty 0.00

Walchandnagar Industries Ltd. (WALCHANNAG) - Auditors Report

Company auditors report

To the Members of Walchandnagar Industries Limited Report on the Financial Statements

We have audited the accompanying financial statements of Walchandnagar IndustriesLimited ("the Company") which comprise the Balance Sheet as at March 312017 the Statement of Profit and Loss and the 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 preparation andpresentation of these financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting 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.

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. 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 judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud and error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company's preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of the accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation of the financial statements.

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

Opinion

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 March312017 and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to

a) Note No. 14.1(a) to the Financial Statements regarding old Trade Receivables of Rs.716.32 Lakhs which are currently under arbitration/ litigation. Pending the ultimateoutcome of these matters which is presently unascertainable no provision has been madein respect of these dues.

b) Note No. 14.1(c) to the Financial Statements regarding non current debtors whichinclude dues of Rs. 312.56 Lakhs from Govt. parties after completion of the projects whichare considered good for recovery.

c) Note No. 16 to the Financial Statements regarding non moving inventory of work inprogress amounting to Rs. 2593.67 Lakhs on account of orders which have been cancelled/put on hold. The Company contends that this stock will either be liquidated or diverted toother projects without any loss arising there from.

Our report is not qualified in respect of the above matters. Report on Other Legaland Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ('the Order') issued bythe Central Government of India - Ministry of Corporate Affairs in terms of sub-section(11) of section 143 of the Act we give in the Annexure A a statement on thematters specified in paragraphs 3 and 4 of the said 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 purpose 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 and proper returns adequatefor the purpose of our audit have been received from divisions at Zambia and Ethiopia notvisited by us. In case of Ethiopia overseas Auditors' Report has been forwarded to us andappropriately dealt with. In case of division at Zambia as there are no significantoperations on account of closure of site the returns received from the branch areunaudited.

(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 and with the returns from thedivisions at Zambia and Ethiopia;

(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 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 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 ourseparate 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 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 - Refer Note 34 to the financial statements;

ii. the Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund (IEPF) by the Company except in case ofunclaimed redemption amount of preference shares amounting to Rs. 1.44 Lakhs which isremaining to be transferred as at the end of the year. (Please refer Note No. 37 to thefinancial statements).

iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016. Based on audit procedures and relying onthe management representation we report that the disclosures are in accordance with booksof accounts maintained by the Company and as produced to us by the management - Refer noteNo.36.

FOR K. S. Aiyar & Co.
Chartered Accountants
Firm's Registration No.: 100186W
Satish K. Kelkar
Place: Mumbai Partner
Date: May 26 2017. Membership No.: 38934

ANNEXURE A TO THE AUDITORS' REPORT

(Referred to in paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our Report of even date on the financial statements forthe year ended March 312017 of

Walchandnagar Industries Limited)

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

(b) The Company has a programme for physical verification of the fixed assets which inour opinion is reasonable having regard to the nature of the business. Accordingly thefixed assets have been physically verified by the Management at the end of the year and nomaterial discrepancies were noticed on such verification.

(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 except in respect of land survey Nos. 317/1B 303 A/2 and337 are not available.

(ii) The Management has conducted physical verification of the inventory at reasonableintervals other than material lying with sub-contractors which have been confirmed bymajority of them.

(iii) The Company has not granted any secured or unsecured loans to companies firms orother parties covered in the Register maintained under section 189 of the Companies Act2013. Therefore clause 3 (iii) of the said Order is not applicable.

(iv) In our opinion and according to the information and explanations given to us thecompany doesn't have any loans investments guarantee or security to which the provisionsof section 185 and 186 of the Companies Act 2013 apply.

(v) The Company has not accepted any deposits during the year to which the provisionsof section 73 to 76 of the Companies Act 2013 and Companies (Acceptance of deposits)Rules 2014 apply. According to the information and explanation given to us no order hasbeen received from Company Law Board National Company Law Tribunal or Reserve Bank ofIndia or any court or tribunal by the Company.

(vi) We have broadly reviewed the cost records maintained by the Company specified bythe Central Government under section 148(1) of the Companies Act 2013 and are of theopinion that prima facie the prescribed cost records have been maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and the records ofthe Company examined by us the Company is generally regular in depositing withappropriate authorities undisputed statutory dues including Provident Fund Employees'State Insurance Income Tax Sales Tax Service Tax Custom Duty Excise Duty Value AddedTax Cess and other material statutory dues to the extent applicable to it.

According to the information and explanations given to us there are no undisputedoutstanding dues in respect of the above items in arrears as at March 31 2017 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to us the disputed statutorydues on accounts of Income Tax Sales Tax Service Tax Customs Duty Excise Duty ValueAdded Tax Municipal Tax and Cess that have not been deposited on account of matterspending before appropriate authority are as follows:

Name of the Statute Nature of Dues Amount (Rs. in Lakhs) Period to which the amount relates Forum where dispute is pending
Central Excise Act 1944 Denial of exemption availed under notification No. 6/2002 for supply of biomass based boilers. 266.19 (Net of CENVAT reversal and payment) March 2000 to March 2004 CESTAT Mumbai
Central Excise Act 1944 Excise duty demand on bought out items supplied for centrifugals which have already suffered duty at manufacturers end. 82.73 (Net of CENVAT reversal and payments) June 1983 to April 2005 Supreme Court
Maharashtra Land Revenue NA Tax (' 20 Lakhs paid under protest) 86.61 1982 to 2003 Tahasildar Indapur
Code NA Tax 16.18 1982 to 2003 Tahasildar Indapur
NA Tax 58.58 1994 to 2003 Tahasildar Indapur
Pune Municipal Corporation Municipal Taxes - Determination of Annual Rateable Value 89.32 2008-09 to 2016-17 Court of Small Causes Pune
Central Sales Tax Act 1956 The exemption from tax for transit sale under section 6(2) (b) is denied. Rs. 30 Lakhs paid under protest. 159.83 2005-06 Sales Tax (Appellate Tribunal) Mumbai
Service Tax Demand on value addition of bought out items. Rs. 28.76 Lakhs paid under protest. 362.65 2006-10 CESTAT Kolkata
Employees Provident Fund EPF - Demand from EPF authorities 50.68 2006-07 Mumbai High Court
Central Excise Act 1944 Excise Duty on bought out components supplied for Centrifugals 2.47 Sept-09 to Jan-11 CESTAT Mumbai

(viii) There are no loans or borrowings payable to government or debenture holders. TheCompany has delayed in repayment of following dues to the banks and financial institutionsduring the year.

Lenders name Period of default days Amount Installment due on Actual payment date
Bank Of India 77 175.00 31/03/2016 16/06/2016
Bank Of India 84 175.00 30/06/2016 22/09/2016
Bank Of India 62 175.00 30/09/2016 01/12/2016
Bank Of India 40 175.00 31/12/2016 09/02/2017
State Bank of India 03 200.00 31/03/2017 03/04/2017

(ix) The company has not raised money by way of Initial Public Offer or further publicoffer (including debt instruments) during the year. In respect of term loans taken by theCompany in our opinion and according to the information and explanations given to us thesame have been applied for the purposes for which they were raised.

(x) According to the information and explanations given to us no material fraud 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 give to us and based on ourexamination 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 our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly clause (xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations give 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.

(xv) 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 non-cashtransactions with directors or persons connected with him. Accordingly clause (xv) of theOrder is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

FOR K. S. Aiyar & Co.
Chartered Accountants
Firm's Registration No.: 100186W
Satish K. Kelkar
Place: Mumbai Partner
Date: May 26 2017. Membership No.: 38934

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")

We have audited the internal financial controls over financial reporting ofWalchandnagar Industries Limited ("the Company") as of 31 March 2017 inconjunction with our audit of the financial statements of the Company for the year endedon that 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.

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 accordance with the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting (the "Guidance Note") and theStandards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls and both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 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 judgment 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 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 accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized 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.

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 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 K. S. Aiyar & Co.
Chartered Accountants
Firm's Registration No.: 100186W
Satish K. Kelkar
Place: Mumbai Partner
Date: May 26 2017. Membership No.: 38934