To The Members of RESONANCE SPECIALTIES LIMITED
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of RESONANCESPECIALTIES LIMITED ("the Company") which comprise the Balance Sheet as atMarch 31 2018 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.
2. Management's Responsibility for the Standalone 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 standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (IndAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
3. Auditor's Responsibility
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
In conducting 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 and the Orderissued under section 143(11) of the Act.
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement. An audit involves performing procedures to obtain audit evidenceabout the amounts and the disclosures in the standalone financial statements. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error. In making those risk assessments the auditor considers internal financialcontrol relevant to the Company's preparation of the standalone financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone financialstatements.
We believe that the audit evidence obtained by us is sufficientand appropriate toprovide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2018 and its profit total comprehensive income the changes in equityand its cash flows for the year ended on that date.
5. Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit 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 including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors of theCompany as on March 31 2018 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2018 from being appointed as a director in termsof 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone 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 by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
For V.R.BHABHRA & CO.
(Firm's Registration No. 112861W)
VIMAL R .BHABHRA
(Membership No. 046043)
Date: 30th May 2018
Annexure A to the Independent Auditors' Report
(Referred to paragraph (9) under Report on other legal and regulatoryrequirements' of our report of even date to the member of resonance specialties limited onthe Ind AS financial statements for the year ended March 31 2018)
i. In respect of Fixed Assets :
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. The fixed assets have been physically verified by the management in a phased mannerdesigned to cover all items over a period of three years which in our opinion isreasonable having regard to the size of the Company and the nature of its business.Pursuant to the program a portion of fixed asset has been physically verified by themanagement during the year and no material discrepancies between the books records and thephysical fixed asset have been noticed.
c. The title deeds of immovable properties are held in the name of the company.
ii. In respect of Inventories :
a. We are informed that the inventory have been physically verified by the managementduring the year. In our opinion the frequency of verification is reasonable.
b. In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventory followed by the management are reasonableand adequate in relation to size of the Company and nature of its business.
c. On the basis of our examination of the records of inventory we are of the opinionthat the Company is maintaining proper records of inventory. We are informed that thediscrepancies noticed on verification between the physical stocks and the book recordswere not material in relation to the operations of the Company.
iii. The company has not granted any loans secured or unsecured to companies firmsin the register maintained under section 189 of the Companies Act 2013. Accordingly theprovisions of clause 3(iii) (a) to (c) of the order are not applicable to the company andhence not commented upon.
iv. In our opinion and according to the information and explanation given to us thecompany has complied with the provisions of Section 185 and 186 of the companies act 2013in respect of loan investments guarantees and security.
v. According to the information and explanations given to us the company has notaccepted any deposits from the public and hence the directives issued by the Reserve bankof India and the provisions of Section 73 to 76 or any other relevant provisions of theAct and Companies (Acceptance of deposit) Rule 2015 with regard to the deposits acceptedfrom the public are not applicable.
vi. We have broadly reviewed the books of account and records maintained by the Companypursuant to the rules prescribed by the Central Government of India the company isrequired to maintain cost records as specified under section 148(1) of the Companies Act2013 in respect of its products. We have broadly reviewed the same and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Thecontents of these accounts and records have not been examined by us.
vii. In respect of statutory dues:
a. According to the information and Explanation given to us and records of the Companyas produced and examined by us in our opinion there have been some delays in depositingundisputed statutory dues in respect of Provident Fund Income-tax Sales-taxService-tax Excise Duty Goods and Services Tax cess and any other statutory dues withthe appropriate authorities.
b. According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income tax Sales Tax Wealth Tax Servicetax Custom Duty Excise Duty Goods and services Tax or cess which have not beendeposited on account of any dispute except as mentioned below:
|Name of statute ||Nature of the Dues ||Amount Rs.in lakhs ||Pending before ||Nature of Dispute |
|Bombay Sales Tax Act / Maharashtra Value Added Tax ||Vat and CST for FY 2005-06 to 2009-10 ||2028.12 ||Remanded Back to Assessing authority Deputy Commissioner of Palghar of the Sales tax ||Original order passed exports |
|Income tax 1961 ||Income tax for the AY 2013-14 ||16.18 ||ITAT ||Additions of Sundry Balance W/off |
|Income tax 1961 ||Penalty u/s 271(1) ||28.55 ||CIT(Appeal) ||Penalty |
|Central Excise Act ||Excise duty ||5.79 ||Joint Commissioner ||common input matter of INH CESTATE |
|Central Excise Act ||Excise duty ||32.00 ||Commissioner of Appeal -Mumbai ||Appeal against the EA-1 Audit Order of Cenvat Credit availment on xerox copy and without documents |
vii. Based on our audit procedures and according to the information and explanationsprovided to us by the management we are of the opinion that the Company has not defaultedin repayment of dues to financial institution and bank.
ix. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
x. Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
xi. According to the information and explanation given to us and based on ourexamination of the records of the company the company has paid and provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovision of Section 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 paragraph 3(xii) of the Order is notapplicable.
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 and Companies Act2013.
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 paragraph 3(xv) ofthe 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 V R BHABHRA & CO.
Vimal R. Bhabhra
Membership No: - 046043
Date: 30th May 2018
Annexure B to the Independent Auditors' Report
(Referred to in paragraph 5(f) of the Independent Auditors' Report of even date to themembers of Resonance Specialties Limited on the financial statements for the year endedMarch 31 2018)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013
We have audited the internal financial controls over financial reporting of ResonanceSpecialities Ltd. ("the Company") as of March 31 2018 in conjunction with ouraudit of the financial statements 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 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 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 Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and 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 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.
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 authorisations of management and directors of the company; and
(3) 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 financial ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls over financial reporting to future periods are subject to therisk that the internal financial control over financial reporting may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures 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 March 31 2018 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 V R BHABHRA & CO.
reporting including the possibility
Vimal R. Bhabhra
Membership No: - 046043
Date: 30th May 2018