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Savera Industries Ltd.

BSE: 512634 Sector: Services
NSE: SAVERA ISIN Code: INE104E01014
BSE 00:00 | 29 May 30.30 -0.95
(-3.04%)
OPEN

31.95

HIGH

33.40

LOW

30.30

NSE 05:30 | 01 Jan Savera Industries Ltd
OPEN 31.95
PREVIOUS CLOSE 31.25
VOLUME 16317
52-Week high 64.00
52-Week low 28.30
P/E 10.78
Mkt Cap.(Rs cr) 36
Buy Price 28.00
Buy Qty 150.00
Sell Price 33.40
Sell Qty 29.00
OPEN 31.95
CLOSE 31.25
VOLUME 16317
52-Week high 64.00
52-Week low 28.30
P/E 10.78
Mkt Cap.(Rs cr) 36
Buy Price 28.00
Buy Qty 150.00
Sell Price 33.40
Sell Qty 29.00

Savera Industries Ltd. (SAVERA) - Auditors Report

Company auditors report

TO

THE MEMBERS OF SAVERA INDUSTRIES LIMITED

Report on the Audit of Financial Statements

Opinion

We have audited the financial statements of Savera Industries Limited ("theCompany") which comprise the Balance Sheet as at 31st March 2019 and the Statementof Profit and Loss (including Other Comprehensive Income) Statement of Changes in Equityand Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of the Significant Accounting Policies and otherexplanatory information (herein after referred to as "financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and its Profit (includingother comprehensive income) changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs)specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion on the financial statements.

Key Audit Matters:

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Key Audit Matter

Accuracy of recognition measurement presentation and disclosures of revenues andother related balances in view of adoption of Ind AS 115 "Revenue from Contracts withCustomers" (new revenue accounting standard)

The application of new revenue accounting standard involves certain key judgementsrelating to identification of distinct performance obligations determination oftransaction price of the identified performance obligations the appropriateness of thebasis used to measure revenue recognized over a period. Additionally new revenueaccounting standard contains disclosure which involves collation of information in respectof disaggregated revenue and periods over which the remaining performance obligations willbe satisfied subsequent to the Balance Sheet date

Refer notes 1(E)(b) and 37(ii)of the financial statements

Auditor's Response:

Principal Audit Procedures

We assessed the Company's process to identify the impact of new revenue accountingstandard. Our audit approach consisted testing of the design and operating effectivenessof the internal controls and substantive testing are as follows:

Evaluated the design of internal controls relating to implementation of the new revenueaccounting standard.

Selected a sample and tested the operating effectiveness of the internal controlrelating to identification of the distinct performance obligations and determination oftransaction price. We carried out a combination of procedures involving enquiry andobservation reperformance and inspection of evidence in respect of operation of thesecontrols.

Tested the relevant information technology systems' access and change managementcontrols relating to contracts and related information used in recording and disclosingrevenue in accordance with new revenue accounting standard.

Selected a sample of continuing and new contracts and performed the followingprocedures:

- Read analysed and identified the distinct performance obligations in these contracts

- Compared these performance obligations with that identified and recorded by theCompany.

- Considered the terms of the contracts to determine the transaction price

- Sample of revenues disaggregated by type and service offerings was tested with theperformance obligations specified in the underlying contracts.

- Performed analytical procedures for reasonableness of revenues disclosed by type andservice offerings.

Information Other than the Financial Statements and Auditor's Report Thereon:

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of 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 FinancialStatements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of the financial statements that give atrue and fair view of the financial position financial performance (including othercomprehensive income) changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified 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 of 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.

In preparing the financial statements the Board of Directors 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 unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

a) Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

b) Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to the financial statements in placeand the operating effectiveness of such controls.

c) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

d) Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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.

e) 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.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to out weigh the public interest benefits of such communication.

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 of India in terms of sub-section (11) of section143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of 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 (including other comprehensiveincome) the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 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 with respect to thefinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirement of section 197 (16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationgiven to us the remuneration paid by the company to its directors during the year is inaccordance with the provision of section 197 of the Act.

(h) 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 financial statements Refer Note 37(i) to the financial statements;

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 S. Venkatram& Co. LLP
Chartered Accountants
FRN : 004656S/S200095
S.Sundarraman
Place : Chennai. Partner
Date : 29th May 2019 M.No : 201028

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

(referred to in paragraph 1 under the heading ‘Report on Other Legal &Regulatory

Requirements' of our report of even date to the Ind AS financial statements of theCompany for the year ended 31st March 2019)

As per the books and records produced before us and as per the information andexplanations given to us and based on such audit checks that we considered necessary andappropriate we confirm that:

i. In respect of Fixed Assets:

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

b. There is a regular program of physical verification which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies were noticed on such verification.

c. With respect to immovable properties of acquired land and buildings that arefreehold the title deeds of immovable properties are held in the name of the Company.

ii. In respect of Inventories:

a. The inventories have been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable.

b. In our opinion the procedures of physical verification of inventories followed bythe management are reasonable and adequate in relation to the size of the Company and thenature of its business.

c. The Company has maintained proper records of inventories. No material discrepancieswere noticed on physical verification.

iii. The Company has not granted any loan secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Companies Act2013.Therefore the provisions of clause (iii) of paragraph 3 of CARO 2016 are notapplicable to the Company.

iv. The Company has complied with the provisions of sections 185 and 186 of CompaniesAct 2013 in respect of making investments. The Company has not granted any loan and notprovided any guarantees or securities to any of the persons referred to in section 185 andsection 186 of the Companies Act 2013.

v. The Company has not accepted any deposit from the public. Therefore the provisionsof Clause (v) of paragraph 3 of the CARO 2016 are not applicable to the Company.

vi. The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Companies Act 2013 for the business activities carried out bythe Company. Thus reporting under clause (vi) of paragraph 3 of the CARO 2016 is notapplicable to the Company.

vii. In respect of statutory dues:

a. The Company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Service TaxGoods and Service Tax Duty of Customs Duty of Excise Value Added Tax Cess and anyother statutory dues with the appropriate authorities during the year.

b. No undisputed amounts payable in respect of Provident fund Income Tax Sales TaxWealth Tax Service Tax Goods and Service Tax Customs Duty Value Added Tax Cess andother material statutory dues were in arrears as at 31 March 2019 for a period of morethan six months from the date they became payable.

c. There are no dues of Income Tax Sales Tax Service Tax Goods and Service TaxCustoms Duty Value Added Tax which was not deposited as at 31 March 2019on account of anydisputes except TDS outstanding as per TRACES amounting to Rs.9.28 Lakhs (Refer Note No.37(i)(B)(a) to the Accounts)

viii. The Company has not made any default in repayment of loans or borrowings from anyfinancial institution banks during the year. The Company has not made any borrowings fromgovernment or in the form of debentures.

ix. The Company during the year has availed hire purchase loan and has applied the samefor the purpose for which it was raised. The Company during the year has not raised anymonies by way of Initial Public offer or further public offer (including debtinstruments).

x. No material fraud by the Company or any fraud on the Company by its officers oremployees has been noticed or reported during the course of our audit.

xi. The Company has paid/provided managerial remuneration in accordance with therequisite approvals mandated by the provisions of section 197 read with schedule V to theCompanies Act 2013.

xii. The Company is not a Nidhi Company. Hence clause (xii) of paragraph 3 of the CARO2016 is not applicable.

xiii. The Company has complied with provisions of section 177 and section 188 of theCompanies Act 2013 and disclosed all transactions with related parties in the Ind ASfinancial statements as required by the applicable accounting standards.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during year under review. Hence clause (xiv) ofparagraph 3 of the CARO 2016 is not applicable.

xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with them. Accordingly paragraph 3(xv) of the Order is not applicable.

xvi. The Company is not a Non Banking Finance Company hence the Company is notrequired to register under section 45-IA of Reserve Bank of India Act 1934.

For S. Venkatram& Co. LLP
Chartered Accountants
FRN : 004656S/S200095
S.Sundarraman
Place : Chennai. Partner
Date : 29th May 2019 M.No : 201028

ANNEXURE ‘B' TO INDEPENDENT AUDITORS' REPORT

(referred to in paragraph 2 under the heading ‘Report on Other Legal &Regulatory Requirements' of our report of even date to the Ind AS financial statements ofthe Company for the year ended 31st March 2019)

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 with reference to financial statementsof M/s. Savera Industries Limited ("the Company") as of March 31 2019 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control with reference to financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls withreference to financial statements of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theAct to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to financial statements was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgments including the assessment of the risks of material misstatement of the Ind ASfinancial statements whether due to fraud or error. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe internal financial controls system with reference to financial statements of theCompany.

Meaning of Internal Financial Controls with reference to financial statements

A company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statements 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 authorizations of management and directors of the company; and

3. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion to the best of our information and explanation given to us the Companyhas in all material respects an adequate internal financial controls system withreference to financial statements and such internal financial controls with reference tofinancial statements were operating effectively as at March 31 2019 based on theinternal control with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls over financial reporting issued by theInstitute of Chartered Accountants of India.

For S. Venkatram& Co. LLP
Chartered Accountants
FRN : 004656S/S200095
S.Sundarraman
Place : Chennai. Partner
Date : 29th May 2019 M.No : 201028