To the Members of Sangam (India) Limited
REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS
We have audited the accompanying Standalone Ind AS fi nancial statements of Sangam(India) Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2018 the Statement of Profi t and Loss (including Other Comprehensive Income) theCash Flow Statement for the year then ended Statement of changes in Equity for the yearthen ended and a summary of signifi cant accounting policies and other explanatoryinformation (hereinafter referred to as Standalone Ind AS Financial Statements).
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE 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 Standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including Other Comprehensive Income Cash Flowsand Statement of Changes in Equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards ( Ind AS)prescribed under Section 133 of the Act read with relevant Rules issued thereunder. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal fi nancial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind AS fi nancialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these Standalone Ind AS fi nancialstatements 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 thereunder and the Orderunder section 143 (11) of the Act.
We conducted our audit of the Standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Standalone Ind AS financial statements are freefrom material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the Standalone Ind AS 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 accountingpolicies used and the reasonableness of the accounting estimates made by Company's Boardof Directors as well as evaluating the overall presentation of the Standalone Ind ASfinancial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS financial statements 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 Profit including Other Comprehensive Income itsCash Flows and the Statement of Changes in Equity for the year ended on that date.
The comparative fi nancial information of the Company for the year ended 31st March2017 prepared in accordance with Accounting Standards included in these Standalone Ind ASFinancial Statements have been audited by the predecessor auditors. The report of thepredecessor auditors on the comparative fi nancial information dated 30th May 2017expressed an unmodifi ed opinion.
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 in terms of Section 143(11) of the Act we give in the "AnnexureA" a statement on the matters specified in paragraphs 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 including Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of accounts.
d) In our opinion the aforesaid Standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under Section 133 of the Act read with relevantRules issued thereunder.
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 isdisqualified as on 31st March 2018 from being appointed as a director in terms ofSection 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".
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 impact of pending litigations under Note No. 41 ofStandalone Ind AS financial statements.
(ii) The Company has made provision as at 31st March2018 as required under theapplicable Law or Accounting Standards for material foreseeable losses on long termcontracts including derivatives contracts.
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS OFSANGAM (INDIA) LIMITED
(Referred to in Paragraph 1 under the "Report on Other Legal and RegulatoryRequirements" section of our report of even date)
(i) In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.
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 having regardto the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.
c) According to the information and explanation 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) In respect of inventories:
In our opinion during the year the inventories have been physically verified by themanagement at reasonable intervals and according to explanation given to us no physicaldiscrepancies were noticed during the year.
(iii) Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under Section 189 of the Companies Act2013 and hence clause iii (a) iii (b) and iii (c) of the Order not applicable to theCompany.
(iv) In our opinion and according to the information and explanations given to us inrespect of loans investments guarantees and security the provisions of sections 185 and186 of the Act have been complied with.
(v) According to the information and explanations given to us the Company has notaccepted any deposit from the public. Therefore the provisions of Clause (v) of paragraph3 of the Order are not applicable to the Company.
(vi) In our opinion the maintenance of cost records has been specified by the CentralGovernment sub section (1) of section 148 of the Act and such accounts and records havebeen so made and maintained by the Company. We have however not made a detailedexamination of the records with a view to determining whether they are accurate orcomplete.
(vii) In respect of statutory dues:
a) According to the records of the Company undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Sales Tax Service Tax Goods& Service Tax Duty of Customs Duty of Excise Value Added Tax Cess and othermaterial statutory dues have been generally regularly deposited with the appropriateauthorities. According to the information and explanations given to us no undisputedamounts payable in respect of the aforesaid dues were outstanding as at 31st March 2018for a period of more than six months from the date of becoming payable.
b) There are no dues of Income Tax Sales Tax Wealth Tax and Service Tax duty ofCustoms Duty of Excise Value Added Tax and Cess which have not been deposited as on31st March 2018 on account of any dispute except in respect of the following:
|Sr. no. ||Name of the statute ||Nature of dues || |
Amount of disputed demand (Rs In Lakhs)
|Period to which the amount relate ||Forum where dispute is pending |
| || || ||Gross ||Net of Deposited || || |
|1 ||Central Excise Act 1944 ||Excise Duty and Penalty ||134 ||124 ||2007-08 to 2008-09 & 2011-12 to 2012-13 & 2014-15 to 2016-17 ||Commissioner of Excise and Service tax (Appeals) Jodhpur |
| || || ||169 ||152 ||2007-08 to 2014-15 ||CESTAT New Delhi |
|2. ||Finance Act 1994 ||Service tax and Penalty ||70 ||63 ||2010-11 to 2015-16 ||Commissioner of Excise and Service tax (Appeals) Jodhpur |
| || || ||145 ||111 ||2009-10 to 2014-15 ||CESTAT New Delhi |
| || || ||457 ||434 ||2010-11 to 2014-15 ||CESTAT New Delhi |
|3 ||Rajasthan Value Added Tax Act 2003 ||Value Added Tax ||94 ||77 ||2012-13 ||Tax Board Ajmer |
| || ||Value Added Tax with RIPS Incentive on Exports ||341 ||314 ||2010-11 to 2012-13 ||Tax Board Ajmer |
| || ||Value Added Tax (Incentive matter) ||35 ||33 ||2006-07 ||Tax board Ajmer& Rajasthan High CourtJodhpur |
|4 ||The Rajasthan Tax on Entry of Goods into Local Areas Act 1999 ||Penalty and Interest ||213 ||62 ||2014-15 to 2015-16 ||D.C. (Appeals) Ajmer |
|5 ||Rajasthan Stamp Duty Act 1998 ||Stamp Duty ||109 ||89 ||2006-07 ||Rajasthan High Court Jodhpur |
|6 ||Electricity Act 2003 ||Fixed Charges Recovery ||20 ||14 ||2009-10 to 2010-11 ||Rajasthan High Court Jodhpur |
(viii) Based on our audit procedures and the information and explanations provided bythe management we are of the opinion that the Company has not defaulted in repayment ofloans or borrowing to financial institutions banks and Government. The Company does nothave any debenture holders. (ix) In our opinion and according to the information andexplanations given to us the term loans raised during the year have been applied for thepurpose for which those loans were raised. The Company has not raised money by way ofinitial public offer or further public offer including debt instruments. (x) In ouropinion and according to the information and explanations given to us no material fraudon or by the Company has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us themanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) The Company is not Nidhi Company and hence reporting under clause (xii) ofparagraph 3 of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us theCompany's transactions with its related party are in compliance with Sections 177 and 188of the Companies Act 2013 where applicable and details of related party transactionshave been disclosed in the Ind AS financial statements etc. as required by the applicableaccounting standards.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. Therefore provisions ofclause (xiv) of paragraph 3 of the Order are not applicable to the Company. (xv) In ouropinion and according to the information and explanations given to us during the yearthe Company has not entered into any non-cash transactions with its directors or personsconnected with him and hence reporting under clause (xv) of paragraph 3 of the Order isnot applicable to the Company.
(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to register under section 45-1A of the Reserve Bank of India Act1934.
(Referred to in paragraph 2 (f) under Report on Other Legal and RegulatoryRequirements' of our report of even date) Report on the Internal Financial Controls OverFinancial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act2013 ("the Act")
We have audited the internal financial controls over financial reporting of Sangam(India) Limited ("the Company") as of 31st March 2018 in conjunction withour audit of the Standalone Ind AS financial statements of the Company for the year endedon 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.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding 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 Companies Act 2013.
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 and the Standards on Auditing prescribed under Section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 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 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
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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2018 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note.
|For Rajendra & Co. ||For O. P. Dad & Co. |
|Chartered Accountants ||Chartered Accountants |
|Firm Regn. No. 108355W ||Firm Regn. No. 002330C |
|Akshay R. Shah ||O. P. Dad |
|Partner ||Partner |
|Membership No.103316 ||Membership No. 035373 |
|Camp : Bhilwara ||Place : Bhilwara |
|Date: 30th May 2018 ||Date: 30th May 2018 |