ECE Industries Limited
Report on Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of ECE Industries Limited('the Company') which comprise the Balance Sheet as at 31st March 2018 the Statement ofProfit and Loss the statement of cash flows and the statement of changes in equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information.
Management's Responsibility for the Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ('the Act1) with respect to the preparationof these financial statements that give a true and fair view of the state of affairs(financial position) profit or loss (financial performance including other comprehensiveincome) cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards ('IndAS') specified under Section 133 of the Act. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the 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 Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.
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 Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including Ind AS specified under Section133 of the Act of the state of affairs (financial position) of the Company as at 31stMarch 2018 and its Statement of Profit 8i loss (financial performance including othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ('the Order') issued bythe Central Government of India in terms of sub-section (11) of section 143 of the Act wegive in the "Annexure-A'' a statement on the matters specified in paragraphs 3 and 4of the Order to the extent applicable.
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 and Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards ("Ind AS") prescribed under Section 133 of the Act.
(e) On the basis of written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st 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 operation 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 financialstatements.
ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For VSD & Associates
Firm Registration No.: 008726N
Place : New Delhi
Dated: 1st May 2018
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
The Annexure referred to in our Independent Auditor's Report of even date to themembers of the Company on the financial statements for the year ended 31st March 2018 wereport that:
i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant & Equipment.
b) The company has planned program to physically verify assets in alternative yearswhich in our opinion is reasonable having regards to the size of the company and thenature of the assets. In accordance with the said program certain property plant &equipment were verified during the year and no material discrepancies were noticed on suchverification.
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.
ii) As per the explanations given to us inventories were physically verified duringthe year by the management at reasonable intervals and no material discrepancy was noticedon such verification.
iii) According to the information and explanations given to us the company has notgranted any loans secured or unsecured to companies firms or other parties covered inthe register maintained under section 189 of the Companies 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 Act with respectto the loans and investments made.
v) The Company has not accepted any deposits from public.
vi) According to the information and explanations given to us the company ismaintaining its cost records as per the form prescribed by the Central Government undersub-section (1) of section 148 of the Companies Act 2013 for the activities of thecompany. We have broadly reviewed the cost records made and maintained by the company andare of the opinion that prima facie the prescribed records have been made and maintained.We however not made a detailed examination of the cost records with a view to determinewhether they are accurate or complete.
vii) a) The company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax sales-tax service tax duty ofcustoms duty of excise value added tax and any other statutory dues with the appropriateauthorities. There are no arrears of outstanding statutory dues as at the last day of thefinancial year concerned for a period of more than six months from the date they becamepayable except as given below:
|Name of the Statue ||Nature of Due ||Period to which it Relates ||Amount (Rs. in lakh) ||Date of Payment |
|Jharkhand Value Added Tax Act 2005 ||VAT Liability ||2013-14 8t 2014-15 ||3.54 ||Not Paid |
(b) According to the records of the company there are no dues outstanding of Salestax. Wealth tax. Service tax. Custom duty. Excise duty VAT and Cess on account of anydispute other than the following:-
|Name of The Statute ||Nature of Dues ||Year ||Amount (fo. in lakh)* ||Forum where dispute is Pending |
|Delhi Works Contract Act 1999 ||Demand Towards Work Contract Tax ||2002-03 ||12.00 ||Deputy Commissioner (Appeals) Delhi |
|Andhra Pradesh General Sales Tax Act 1957(Central) ||Demand towards Works Contract Tax ||2001-02 |
|10.94 ||Commercial Tax Officer Andhra Pradesh |
|Gujarat State Sales Tax Act 1969 ||Demand towards work contract tax ||1993-94 ||2.78 ||Deputy Commissioner (Appeals) Gujarat |
|Central Excise Act 1944 ||Demand towards Excise Duty ||1998-99 ||5.82 ||Andhra Pradesh High Court |
|U P Municipal Laws (Cess Act) ||Demand towards Water Cess ||1992-93 ||0.60 ||Tehsildar Gaziabad (U.P.) |
|Central Excise Act 1944 ||Demand towards Excise Duty ||2007-08 ||1.17 ||Additional Commissioner (Excise) Rohtak |
* Net of payments
viii) The company has not defaulted in repayment of loans or borrowing to a financialinstitution bank or Government. According to the information and explanations given tous there are no dues outstanding in respect of any debenture during the current financialyear or any previous year.
ix) During the year the Company has not raised any funds through Initial/Further Publicoffer (including debt instruments) and the term loans were applied for the purpose forwhich they were obtained.
x) According to the information and explanations given to us no fraud on or by theCompany has been noticed or reported during the 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 or provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
xii) The Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order isnot 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 section 177 and 188 of Companies Act 2013 and the details have beendisclosed in the financial statements as required by the applicable accounting 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 the company has notentered into any noncash transactions with directors or persons connected with him.Accordingly paragraph 3(xv) of the Order is not applicable.
xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For VSD & Associates
Firm Registration No.: 008726N
Place : New Delhi
Dated: 1st May 2018
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 Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ECEIndustries Limited as of March 31 2018 in conjunction with our audit of the financialstatements of the Company for the year ended on 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India('ICAI'). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
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 Standards on Auditing issued by ICAI and deemed to be prescribed under section143(10) of the Act to the extent applicable to an audit of internal financial controlsand the Guidance Note issued by the ICAI. Those Standards and the Guidance Note requirethat 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 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.
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.
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 31st March 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.
For VSD & Associates
Firm Registration No.: 008726N
Place : New Delhi
Dated: 1st May 2018