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S & S Power Switchgear Ltd.

BSE: 517273 Sector: Engineering
NSE: S&SPOWER ISIN Code: INE902B01017
BSE 00:00 | 10 Jul 14.35 0.65
(4.74%)
OPEN

14.35

HIGH

14.35

LOW

14.35

NSE 00:00 | 10 Jul 15.00 0.70
(4.90%)
OPEN

13.60

HIGH

15.00

LOW

13.60

OPEN 14.35
PREVIOUS CLOSE 13.70
VOLUME 300
52-Week high 36.85
52-Week low 12.50
P/E 42.21
Mkt Cap.(Rs cr) 9
Buy Price 13.20
Buy Qty 100.00
Sell Price 13.50
Sell Qty 100.00
OPEN 14.35
CLOSE 13.70
VOLUME 300
52-Week high 36.85
52-Week low 12.50
P/E 42.21
Mkt Cap.(Rs cr) 9
Buy Price 13.20
Buy Qty 100.00
Sell Price 13.50
Sell Qty 100.00

S & S Power Switchgear Ltd. (S&SPOWER) - Auditors Report

Company auditors report

TO THE MEMBERS OF S&S POWER SWITCHGEAR LIMITED

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

1. We have audited the accompanying Standalone financial statements of S&SPower Switchgear Limited (‘the Company') which comprise the Balance Sheet as at31st March 2019 the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow statement and the Statement of Changes in Equity for the year then endedand a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (the ‘Act') in the manner so requiredand give a true and fair view in conformity with the accounting principles generallyaccepted in India including Indian Accounting Standards (‘Ind AS') specified underSection 133 of the Act of the state of affairs (financial position) of the Company as at31 March 2019 and its profit (financial performance including other comprehensiveincome) its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specifiedunder Section 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI')together with the ethical requirements that are relevant to our audit of the Standalonefinancial statements under the provisions of the Act and the rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that in our professional judgment were ofmost significance in our audit of the standalone financial statements of the currentperiod. These matters were addressed in the context of our audit of the Standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

5. We have determined the matters described below to be the key audit matters to becommunicated in our report.

Key audit matter How our audit addressed the key audit matter
Impairment testing of investments in subsidiaries Our procedures included but were not limited to the following:
Refer Note 6 16 and 31 to the accompanying standalone financial statements
As at 31 March 2019 the carrying amount of investment in subsidiaries viz Acrastyle Power (India) Limited Acrastyle EPS Technologies Limited and S&S Power Switchgear Equipment Limited is Rs 187420. Further the company has also advanced loans to these subsidiaries and the amount due along with interest accrued thereon as at 31st March 2019 (net of provisions) is Rs 116849. Acrastyle Power (India) Limited further has invested in two subsidiaries viz Acrastyle Limited UK and Acrastyle Switchgear Limited UK. • Obtained an understanding of management's process and evaluated design and tested operating effectiveness of controls around identification of indicators of impairment under Ind AS and around valuation of the business of the subsidiaries to determine recoverable value of the said investment and loans granted
• Assessed the appropriateness of methodology and valuation model used by the management to estimate the recoverable value of investment in the subsidiaries and loans granted;
• Assessed the professional competence objectivity and capabilities of the valuation specialist engaged by the management;
As required under Ind-AS the management has performed an impairment assessment and has estimated the recoverable amount of its investment in the subsidiaries using applicable valuation models which is complex and involves the use of significant management estimates and assumptions that are dependent on expected future market and economic conditions. • Assessed the reasonableness of assumptions relating to revenue growth rate gross margins discount rates etc. based on historical results current developments and future plans of the business estimated by management using expertise of our valuation specialist on required parameters;
Considering the materiality of the amounts involved the significant management judgement required in estimating the quantum of diminution in the value of investment and such estimates and judgements being inherently subjective this matter has been identified as a key audit matter for the current year audit. • Assessed cash flow forecasts to ensure consistency with current operations of the Company and performed sensitivity analysis on key assumptions used in management's calculated recoverable value.
Based on our procedures we also considered the adequacy of disclosures in respect of investment in the said subsidiaries and loans granted in the notes to the standalone financial statements.

Information other than the Standalone Financial Statements and Auditor's Report thereon

6. The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual Report but does notinclude the Standalone financial statements and our auditor's report thereon.

Our opinion on the Standalone financial statements does not cover the other informationand we do not express any form of assurance or conclusion thereon.

In connection with our audit of the Standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

7. The Company's Board of Directors is responsible for the matters stated inSection 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs (financial position)profit or loss (financial performance including other comprehensive income) changes inequity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Ind AS specified under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing 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.

8. In preparing the Standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the Standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith Standards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

11. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act we are also responsible for explaining our opinion on whether the Companyhas adequate internal financial controls system in place and the operating effectivenessof such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

12. We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant defficiencies in internal control that we identify during ouraudit.

13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the Standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

15. As required by Section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under Section 197 read with Schedule V to the Act.

16. As required by the Companies (Auditor's Report) Order 2016 (the ‘Order')issued by the Central Government of India in terms of Section 143(11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder.

17. Further to our comments in Annexure A as required by Section 143(3) of theAct we report that:

a. we have sought and obtained all the information and explanations which to thebest of 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 it appears from our examination of those books;

c. the standalone financial statements dealt with by this report are in agreementwith the books of account;

d. in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under Section 133 of the Act;

e. on the basis of the written representations received from the directors andtaken on record by the Board of Directors none of the directors is disqualified as on 31March 2019 from being appointed as a director in terms of Section 164(2) of the Act;

f. we have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as on 31 March 2019 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport as per Annexure B expressed an unmodified opinion;

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 the standalone financial statements;

ii. the Company does not have any material foreseeable losses for which aprovision may be necessary.

iii. there were no amounts that were required to be transferred to the investoreducation protection fund by the Company during the year ended 31st March 2019.

For C N K & Associates LLP

Chartered Accountants

FRN: 101961W/W-100036

Vijay Mehta

Partner

Membership number: 106533

Place: Mumbai

Date: 29th May 2019

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE TO THE MEMBERS OF S&SPOWER SWITCHGEAR LIMITED ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31MARCH 2019

ANNEXURE A

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:

(i) (a) The Company is maintaining proper records showing full particularsincluding quantitative details and situation of property plant and equipment.

(b) Property plant and equipment were physically verified by Management during theyear and no material discrepancies were noticed during such verification.

(c) The Company has provided the title deeds in respect of freehold land andbuilding which are in the name of the Company as at the Balance Sheet date.

(ii) The inventory has been physically verified by the Management at reasonableintervals during the year and no material discrepancies have been noticed on suchverification;

(iii) The Company has granted unsecured loans to the parties covered in theregister maintained under Section 189 of the Act.

(a) In respect of the aforesaid loans the terms and conditions under which suchloans were granted are not prejudicial to the Company's interest.

(b) The aforesaid loans and interest are repayable on demand. The Company has notdemanded the repayment of the said loans and hence there does not arise a situation forcommenting on the regularity of repayment of principal and payment of interest.

(c) In respect of the aforesaid loans there is no amount which is overdue for morethan ninety days.

(iv) In our opinion the Company has complied with the provisions of Sections 185and 186 of the Act in respect of loans investments guarantees and security.

(v) According to information and explanations given to us the Company has notaccepted any deposits within the meaning of Sections 73 to 76 of the Act and the rulesframed there under to the extent notified;

(vi) According to the information and explanations given to us the Company is notrequired to maintain cost records pursuant to the Companies (Cost Records and Audit)Amendment Rules 2016 and prescribed by the Central Government under sub-section (1) ofsection 148 of the Companies Act 2013;

(vii) (a) According to the information and explanation given to us and the recordsof the Company examined by us in our opinion the Company is generally regular indepositing the undisputed statutory dues including provident fund employees' stateinsurance Income tax Duty of Excise Duty of Customs Goods and Service Tax and othermaterial statutory dues as applicable with appropriate authorities. However we noticeddelays in such remittances extending to maximum of 60 days

(b) There were no undisputed amounts payable in respect of provident fund SalesTax Service Tax value added tax goods and service tax and other material statutory duesin arrears as at 31st March 2019 for a period of more than six months from the date theybecame payable.

(c) According to the information and explanations given to us and the records ofthe Company examined by us the particulars of dues of income tax excise duty and customsduty as at 31st March 2019 which have not been deposited on account of a dispute are asfollows:. (Refer note 39 to the Financial Statements)

(Rs. In Thousands)
Name of the Statute Nature of Dues Amount Period to which the amount relates Forum where the matter is pending
Central Excise Act 1944 Excise Duty 34190* 1993 to 1997 CESTAT - Chennai
Foreign Trade Policy Differential Customs Duty 17247 1998 to 1999 DGFT – Delhi
Income Tax Act 1961 Tax on waiver of principal portion of loans by bankers 9298 AY 2007-08 ITAT – Chennai

* Rs. 5000 paid as deposit.

(viii) According to the records of the Company examined by us and the informationand explanations given to us the Company has not borrowed from financial institutionsbank or government as at the balance sheet date. The Company has not issued anydebentures. Therefore the provisions of clause 3 (viii) of the order are not applicableto the company;

(ix) According to the records of the Company examined by us and the information andexplanation given to us the Company has not raised money by way of initial public offeror further public offer (including debt instruments) and term loans during the year.Accordingly the provisions of Clause 3(ix) of the Order are not applicable to theCompany;

(x) According to the information and explanations given to us and to the best ofour knowledge no fraud by the Company or on the Company by its officers or employees hasbeen noticed or reported during the course of our audit;

(xi) In our opinion and according to Information and explanations given to us themanagerial remuneration has been paid in accordance with requisite approvals mandated bythe provisions of section 197 read with Schedule V of the Companies Act 2013;

(xii) The Company is not a Nidhi company and therefore the provisions of clause 3(xii) of the order are not applicable to the company;

(xiii) In our opinion and according to information and explanations given to usthe company is in compliance with the provisions of section 177 and 188 of the CompaniesAct 2013 where applicable for all the transactions with the related parties and thedetails of related party Transactions have been disclosed in the Standalone FinancialStatements as required by the applicable accounting standards;

(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforeclause 3(xiv) is not applicable to the Company;

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company during the year the Company has not enteredinto non-cash transactions with directors or persons connected with him. Accordinglyclause 3(xv) of the Order is not applicable to the Company;

(xvi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934. Accordingly the provisions ofClause 3(xvi) of the Order are not applicable to the Company.

For C N K & Associates LLP

Chartered Accountants

FRN: 101961W/W-100036

Vijay Mehta

Partner

Membership number: 106533

Place: Mumbai

Date: 29th May 2019

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE TO THE MEMBERS OF S&SPOWER SWITCHGEAR LIMITED ON THE STANDALONE FINANCIAL STAT EMENTS FOR THE YEAR ENDED 31MARCH 2019

ANNEXURE B

Independent Auditor's report on the Internal Financial Controls under Clause (i) ofsub-section 3 of Section 143 of the Companies Act 2013 (the "Act")

1. In conjunction with our audit of the standalone financial statements of S&SPower Switchgear Limited (the "Company") as at and for the year ended 31 March2019 we have audited the internal financial controls over financial reporting (IFCoFR) ofthe Company as of that date.

Management's Responsibility for Internal Financial Controls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India (ICAI). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the Company's business including adherence to Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theICAI and deemed to be prescribed under Section 143(10) of the Act to the extentapplicable to an audit of IFCoFR and the Guidance Note issued by the ICAI. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate IFCoFR wereestablished and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about theadequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includedobtaining an understanding of IFCoFR assessing the risk that a material weakness existsand testing and evaluating the design and operating effectiveness of internal controlbased on the assessed risk. The procedures selected depend on the auditor's judgementincluding the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A Company's IFCoFR is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A Company's IFCoFR includes those policies and procedures that

a. pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

b. provide reasonable assurance that transactions are recorded as necessary topermit 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

c. 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

7. Because of the inherent limitations of IFCoFR including the possibility 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 the IFCoFRto future periods are subject to the risk that IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31 March 2019 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note issued by the ICAI.

For C N K & Associates LLP

Chartered Accountants

FRN: 101961W/W-100036

Vijay Mehta

Partner

Membership Number: 106533

Place: Mumbai

Date: 29th May 2019