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Khaitan Electricals Ltd.

BSE: 504269 Sector: Consumer
NSE: KHAITANELE ISIN Code: INE761A01019
BSE 00:00 | 09 Sep Khaitan Electricals Ltd
NSE 05:30 | 01 Jan Khaitan Electricals Ltd
OPEN 7.49
PREVIOUS CLOSE 7.49
VOLUME 5
52-Week high 7.49
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 7.49
Sell Qty 4995.00
OPEN 7.49
CLOSE 7.49
VOLUME 5
52-Week high 7.49
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 7.49
Sell Qty 4995.00

Khaitan Electricals Ltd. (KHAITANELE) - Auditors Report

Company auditors report

To

The Members of

Khaitan Electricals Limited

Report on Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Khaitan ElectricalsLimited ("the Company") which comprise the Balance Sheet as at 31st March2018 the Statement of Changes in Equity the Statement of Profit and Loss the Cash Flowfor the accounting year then ended and a summary of the significant 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 Act") with respect to the preparation ofthese financialstatements that give a true and fair view of the financialpositionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified 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.

Auditors’ responsibility

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 andauditing standards and matters which are required to be included in the audit report underthe 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 the auditor’s judgment including the assessmentof the risks of material misstatement of the Ind AS financialstatements whether due tofraud or error.

In making those risk assessments the auditor considers internal financialcontrolrelevant to the Company’s preparation of the financialstatements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company’s Directors aswell as evaluating the overall presentation of the Ind AS financial statements. We believethat the audit evidencewehaveobtainedissufficient and appropriate to provide a basis forour audit opinion on the financial statements.

Basis for Qualified Opinion:

i. The accounts have been prepared on going concern basis although the net worth ofthe Company has been fully eroded (Refer Note No. 42).

ii. The balance due to / from creditors parties to whom advances have been given andcertain debtors are subject to confirmation (Refer Note No. 34).

iii. The company has not provided for Bank Interest from the month of July 2017 sincethe same has been declared NPA by the banks. Had this interest been provided then therewould have been an increase in the loss amounting to Rs. 4041.50 lakhs (Refer Note No.30).

iv. The company has given Loan having closing balance of Rs. 140.55 lakhs to a relatedParty on which interest amounting to Rs.16.84 lakhs has not been provided. Had thisinterest been provided then there would have been a decrease in the loss amounting toRs.16.84 lakhs (Refer Note No. 37).

Qualified Opinion:

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basis forQualified Opinion paragraph the aforesaid Ind AS financialstatements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2018 and its loss and its cash flows for the year ended on thatdate.

Other Emphasis Matters:

The comparative financial information of the Company for the year ended March 31 2017and the transition date opening balance sheet as at April 1 2016 prepared in accordancewith Ind AS included in these Ind AS financial statements have been audited by thepredecessor joint auditors who had audited the financial reporting of the Company andstatements for the relevant periods. The report of the predecessor auditors on thecomparative financial information and the opening balance sheet dated June 9 2017expressed a modified opinion.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on themattersspecified in paragraphs 3 and 4 of the Order.

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

i. Except for the matter described in para of Basis for Qualified Opinion we haveobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit.

ii. 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.

iii. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

iv. Except for the possible effects of the matter described in para on Basis forQualified Opinion the aforesaid Ind AS financial Standards specified under Section 133 ofthe Act read with Rule 7 of the Companies (Accounts) Rules 2014.

v. On the basis of the written representations received from the directors as at 31stMarch 2018 and taken on record by the Board of Directors none of the directors isdisqualified as at 31st March 2018 from being appointed as a director in terms of Section164 (2) of the Act.

vi. With respect to the adequacy of the internal financial controls over financial theoperating effectiveness of such controls refer to our separate Report in "AnnexureB". vii. With respect to the other matters to be included in the Auditor’sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

a. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements.

b. The Company did not have any long-term contracts including derivatives contracts forwhich there were any material foreseeable losses.

c. There is no amount required to be transferred to the Investor Education andProtection Fund by the Company.

For Bidasaria & Associates

Chartered Accountants

F.R.No.315101E

( CA. Ankit Bidasaria)

Partner

Membership No. 307256

Place of Signature : Kolkata statementscomplywith the Accounting

Date: 30th May 2018

"Annexure A" to the Independent Auditors’ Report of Even Date on the IndAS Financial Statements of Khaitan Electricals Limited

Statement referred to in paragraph ‘Report on Other Legal and RegulatoryRequirements’ of our report of even date to the members of Khaitan ElectricalsLimited on the Ind AS financial statements for the year ended 31st March 2018.

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

b) The fixed assets were physically verified during the year by the management inaccordance with a regular programme of verification which in our opinion provides forphysical verificationof all fixed assets at reasonable intervals except fixed assets lyingat Kolkata factory as the factory has been seized by Kolkata Port Trust. According to theinformation & explanations given to us 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 except title deeds of immovable properties having writtendown value of Rs. 1.94 lacs which were not made available to us for our verification.

(ii) The inventories (excluding stocks with third parties and inventories lying atKolkata factory which has been seized by Kolkata Port Trust) have been physically verifiedduring the year at most of the branches and Hyderabad Factory by the management atreasonable intervals. However no physical verification has been conducted at Faridabadfactory the year.

(iii) According to the information and explanation given to us the company has grantedloan to 1 party covered in the register maintained under Section 189 of the Act havingclosing balance 140.55 lacs. Interest amounting to Rs. 16.84 lakhs has not been providedand except this other terms and conditions whereof are not prejudicial to the interest ofthe Company. There are no stipulations as to repayment of loan and interest.

(iv) In our opinion and according to the information and explanations given to usthere are no guarantees and securities granted in respect of which provisions of section185 & 186 of the Companies Act 2013 are applicable . Based on our audit procedureperformed and according to the information and explanations given by the management theCompany has complied with provision of section 186 of the Act in respect of loans grantedand investments.

(v) The Company has not accepted any deposit within the meaning of section 73 to 76 orany other relevant provisions of the Act and the rules framed there under. The directivesissued by the Reserve Bank of India are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof products where pursuant to the rules made by the Central Government the maintenance ofCost records has been prescribed under section 148(1) of the Act and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Wehowever as not required have not made a detailed examination of such records.

(vii) a) On the basis of our examination the Company has been generally irregular indepositing undisputed statutory dues including provident fund income tax sales taxvalue added tax employees’ state insurance duty of excise GST service tax andother material statutory dues to the extent applicable with appropriate authorities.

According to the records the following statutory dues were outstanding as at 31stMarch 2018 for a period of more than six months from the date they became payable:

Name of the Statute Nature of Dues Period to which pertain Amount (Rs. In Lacs) Due date Paid on
Income Tax Act 1961 Tax deducted at source 2015-16 to 2017-18 130.75 7th of the succeeding month -
The Central/State Sales Tax Act Value Added Tax 2015-16 to 2017-18 225.52 20th of succeeding month -
The West Bengal State Tax on Professions Trades Callings and Employment Act Profession Tax 2016-17 & 2017-18 2.65 21st of succeeding month -
Employee State Insurance ESI 2016-17 & 2017-18 2.11 21st of succeeding month -
Finance Act 1994 Service Tax 2017-18 7.78 5th of the succeeding month -
Provident Fund Provident Fund Act 2016-17 & 2017-18 94.09 15th of succeeding month -

b. The disputed statutory dues aggregating to Rs. 3510.22 lakhs that have not beendeposited on account of matters pending before appropriate authorities are as under:

Name of the Statute Nature of Dues Amount (Rs. In Lacs) Period Forum where dispute in pending
State Sales Tax Sales Tax /Penalty 2693.60 2005-06 to 2015- 16 AC DC Commissioner Revision Board of Commercial Taxes Tax Tribunal High Court.
The Central Excise Act 1944 Excise Duty 797.08 1994-95 2000-01 to 2001-02 & 2007- 08 to 2013-14 Commissioner of Central Excise Tribunal CESTAT
Penalty 10.00 2008-09 Tribunal Delhi
Finance Act’1994 Service Tax 2.47 2011-12 Asstt. Commissioner Service tax
Employee State insurance Corporation Employee State insurance Act 6.78 1994-95 ESI Court
Income Tax Act 1961 Income Tax 0.29 2010-11 Dy. Commissioner of Income Tax
Total 3510.22

(viii) The Company does not have any loans or borrowings from Government or debentureholder. However according to the records the

Company has defaulted in repayment of borrowings to following financial institutions orbanks :

Name of the financial institutions /banks Nature of dues Period to which pertain Amount (Rs. in Lakhs)* Delays in days
Bank of India Bills discounting 2015-16 To 2017-18 151989164 55 to 1026 days
Religare Finvest Limited Bills discounting 2015-16 To 2017-18 56825759 5 to 1056 days
IDBI Bank Limited Bill Discounting 2016-18 106045248 61 to 628 days
Allahabad Bank Cash Credit 2016-18 323205247 1 to 517 days
Indian Bank Cash Credit 2016-18 531980548 1 to 670 days
State Bank of Patiala Cash Credit 2016-18 258580600 1 to 548 days
IDBI Bank Limited Cash Credit 2016-18 513412571 1 to 700 days
State Bank of Travancore Cash Credit 2016-18 517137052 1 to 704 days
Allahabad Bank WCTL 2016-18 57330797 58 to 515 days
Allahabad Bank FITL 2016-18 52060137 58 to 515 days
Allahabad Bank Term Loan 2016-18 673480711 58 to 515 days
Indian Bank WCTL 2016-18 86954072 58 to 515 days
Indian Bank FITL 2016-18 86516248 58 to 515 days
State Bank of Patiala WCTL 2016-18 31016708 423 days
State Bank of Patiala FITL 2016-18 29206640 423 days
State Bank of Travancore WCTL 2016-18 73162420 58 to 515 days
State Bank of Travancore FITL 2016-18 68350413 58 to 515 days
IDBI Bank Limited WCTL 2016-18 68487738 58 to 515 days
IDBI Bank Limited FITL 2016-18 79855327 58 to 515 days

* Interest from the month July 2018 has not been charged.

(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) or term loan during the year.

(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 year.

(xi) According to the information and explanations given 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 the Company is not a Nidhi Company. Therefore clause (xii) ofparagraph 3 of the said order is not applicable to the Company.

(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 preferential allotmentor private placement of shares or fully or partly convertible debentures during the 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 them. Accordingly clause (xv) ofparagraph 3 of the said order is not applicable to the Company.

(xvi) According to the information and explanations given to us the provisions ofSection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For Bidasaria & Associates

Chartered Accountants

F.R.No.315101E

(CA. Ankit Bidasaria)

Partner

Membership No. 307256

Place of Signature : Kolkata

Date: 30th May 2018

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 control over financial of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of KhaitanElectricals Limited ("the Company") as of March 31 2018 in conjunction withour audit of the Ind AS 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 Company considering the essential components of internal control stated inthe Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issuedby the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialCompanies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols audit. We conducted our audit in accordance with the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting (the "Guidance Note") andthe Standards on Auditing to the extent applicable to an audit of internal financial 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 over financialinternal reporting financial were 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 financial exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor’s judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

Acompany’sinternalfinancial reporting is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company’s internal financial control over financialreporting procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe Company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorisations of management and directors of the Company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the Company’s assets that could have a materialeffect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial information asrequired under the Reporting

Because of the inherent limitations of internal financialcontrols over financialreporting including the possibility of collusion or improper management override ofcontrols material over financial misstatements due to error or fraud may occur and not bedetected.

Also projections of any evaluation of the internal financialcontrols overfinancialreporting to future periods are subject to the risk that the internalfinancialcontrol over financial reporting may controls inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancialcontrols system over financial and such internal financial operating effectivelyas at March 31 2018 based on the internal control over financialreporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Overcontrols over FinancialReporting issued by the ICAI. reporting assessing the risk that a material weakness

For Bidasaria & Associates

Chartered Accountants

F.R.No.315101E

(CA. Ankit Bidasaria)

Partner

Membership No. 307256

Place of Signature : Kolkata

Date: 30th May 2018

.