To the Members of
Continental Controls Limited
Report on the Financial Statements
1. We have audited the accompanying Standalone Ind AS financial statements of ContinentalControls Limited("the Company") which comprise the Balance Sheet as at 31stMarch 2018 the Statement of Profit and Loss including Other Comprehensive Income thecash flow statement & Statement of Changes in equity and a summary of the significantaccounting policies and other explanatory information.
2. 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 ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with the Companies(India Accounting Standards) Rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of 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.
Our responsibility is to express an opinion on these Standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there under.
3. 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 the 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.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
4. Basis of Qualified Opinion
Reference is invited Note nos. 35 regarding various balances of debtors creditors andassets and liabilities and relating to various tax related accounts pending forreconciliation and subsequent adjustments if any and also Note No 36 regarding pendingcompliance of Ind-As 19 on employee benefits. The precise impact ofwhich has not beenascertained. The Internal controls including internal audit in the company also requiredfurther strengthening. The Overall impact of the above on thefinancial statements hasremained unascertained.
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 31stMarch 2018 and its profit including Other Comprehensive Income and its cash flows forthe year ended on that date.
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 we give in the Annexure A a statement on the matters specified inparagraphs 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 it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss Statement and the Cash flowstatement dealt with by this report are in agreement with the books of account.
(d) In our opinion except as stated in basis for qualified opinion paragraph theaforesaid financial statements comply with the Accounting Standards specified underSection 133 of the Act read with the Companies ( Indian accounting Standards) Rules2015.
(e) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors aredisqualified as on31st March 2018 from being appointed as a director in terms of Section164 (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";
(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.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For R. Devendra Kumar & Associates
(Firm Registration No. 114207W
Membership No. 074392
Date: 30th May 2018
Annexure " A" to the Independent Auditors' Report
(Referred to in Paragraph 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date)
1. In respect of its fixed assets:
a) The Company has maintained records showing particulars including quantitativedetails and situation of fixed assets on the basis of available information which areunder up-dation.
b) As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its assets. The report of suchverification is explained to be under compilation. No material discrepancies wereexplained to have been noticed on such physical verification by the management.
c) According to the documents provided to us we confirm that the title deeds ofimmovable properties are held in the name of the company.
2. In respect of its inventories:
a) In our opinion and according to the information and explanations given to usphysical verification of inventory has been conducted by the management at reasonableintervals by the management. The report of such verification is explained to be undercompilation. No material discrepancies were explained to have been noticed on suchphysical verification by the management.
3. The Company has granted loan to one body corporate covered in the registermaintained under section 189 of the Companies Act.
a) In our opinion terms and conditions on which the loan had been granted to the bodycorporate listed in the register maintained under Section 189 of the Act was not primafacie prejudicial to the interest of the Company.
b) The loan granted is interest free the principal amount is granted and receivedduring the year and there is no outstanding at the end of the year.
4. 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 Act with respectto the loans and investments made.
5. The Company has not accepted any deposits from the public.
6. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.
7. According to the information and explanations given to us in respect of statutorydues:
a) Undisputed statutory dues in respect of sales tax service tax withholding taxesprovident fund and employees' state insurance cess as applicable and any other statutorydues have been regularly deposited with the appropriate authorities. There were noundisputed amounts payable in respect of Income-tax Custom Duty Sales Tax Excise DutyCess and other material statutory dues in arrears as at 31st March 2018 for a period ofmore than six months from the date they became payable except for an amount of Rs.66220relating to TDS demand at TRACES Portal which is being evaluated by the Company .
b) There are no statutory dues pending to be deposited on account of disputes pendingwith various forums .
8. The Company taken a Buyers Credit loan from Bank against collateral security ofPremises of the Company during the year However there is no defaults reported during theyear .
9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3 (ix) of the Order is not applicable.
10. 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.
11. The Company has paid/provided for managerial remuneration in the books of accountsin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act.
12. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
13. 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.
14. 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 during the 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 non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For R. Devendra Kumar & Associates
Firm Registration No. 114207W
Membership No. 074392
Date: 30th May 2018
"ANNEXURE B" REFERRED TO IN THE INDEPENDENT AUDITOR'S REPORT ON FINANCIALSTATEMENTS FOR THE FINANCIAL YEAR 2017-18
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013
1. We have audited the internal financial controls over financial reporting ofContinental Controls Limited ("the Company") as of March 31 2018 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
2. 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.
3. 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 to the extent applicableto an audit of internal financial controls both issued by the Institute of CharteredAccountants of India. 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.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
5. Based on our audit conducted as above we believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our qualified opinion on theCompany's internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
6. 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 themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2)provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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
7. 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.
8. According to the information and explanation given to us and based on our audit thefollowing internal control weaknesses of material nature have been identified as at March312018:
a. Confirmation and reconciliation of various balances relating to debtors creditorsand assets and liabilities and relating to various tax related accounts pending forreconciliation and subsequent adjustments if any are pending.;
b. Balances of Statutory receivables being TDS receivables GST VAT Excise DutyService Tax as at the year end are under reconciliation with the returnsfilled and recordsof respective departments. Adjustments if any arising out of such reconciliations are tobe carried out in due course and is presently unascertained.
c. The management is stated to have been taking steps for implementing andstrengthening internal controls in various areas of financial reporting and the process ofinternal audit is also stated of being strengthened. Inadequate controls are observed inthe areas as stated above.
9. A material weakness' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's financial statement will not beprevented or detected on a timely basis.
10. In our opinion except for the possible effects of the internal control weaknessesdescribed above on the achievements of the objectives of the control criterion thecompany has maintained in all material respects adequate internal financial controlover financial reporting and such internal financial controls over financial reportingwere operating effectively as of March 312018 based on "the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia".
11. We have considered the material weaknesses identified and reported above indetermining the nature timing and extent of audit tests applied in our audit of theMarch 312018 financial statements of the Company and these material weaknesses do notaffect our opinion on the Standalone financial statements of the Company except to theextent of our qualification as contained in our separate report on the Standalonefinancial statements of the company.
For R.Devendra Kumar & associates
Firm Registration No. 114207 W )
Membership No. 074392
Date: 30th May 2018