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SBEC Systems (India) Ltd.

BSE: 517360 Sector: Others
NSE: N.A. ISIN Code: INE689V01018
BSE 05:30 | 01 Jan SBEC Systems (India) Ltd
NSE 05:30 | 01 Jan SBEC Systems (India) Ltd

SBEC Systems (India) Ltd. (SBECSYSTEMS) - Auditors Report

Company auditors report

TO THE MEMBERS OF SBEC SYSTEMS (INDIA) LIMITED

Report on the Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of M/s.SBEC SYSTEMS(INDIA) LIMITED (‘the Company’) which comprise the Balance Sheet as at 31March 2021 and the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash flows for the year endedincluding a summary of the significant accounting policies and other explanatoryinformation to as "the Standalone Ind AS Financial Statements").

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion section of our report the aforesaid standalone financial statementsgive the information required by the Companies Act 2013 ("the Act") in themanner so required and give a true and fair view in conformity with the Indian AccountingStandards prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended ("Ind AS") and other accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2021 the loss and total comprehensive income(loss) changes in equity and its cashflows for the year ended on that date.

Basis for Qualified Opinion

We draw attention to Note No. 25 of the financial statements the Company has notcomplied with the Ind AS requirements regarding reversal of provision for diminution of acurrent quoted investment aggregating to Rs. 167.83 Lacs. Had the company reversed theexisting provision as per IND AS requirements the loss for the quarter would have beenlower by an even amount and its consequent impact on EPS.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) specified the Act. Our responsibilities under thoseStandards are further described in the Auditor’s Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant toour audit of the Standalone Financial Statements under the provisions of the Act and theRules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the standalone IndAS financial statements.

Emphasis of Matters

We draw attention to Note No. 24 to the financial statement according to which thecompany has prepared its accounts on a going concern basis even though the net worth ofthe Company has been fully eroded. These facts cast significant doubts above theCompany’s ability to continue as a going concern.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements of the currentperiod. We have determined that there are no key audit matters to communicate in ourreport.

Information Other than the Standalone Ind AS Financial Statements and Auditor’sReport 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 ReportBusiness Responsibility Report Corporate Governance and

Shareholder’s Information but does not include the standalone Ind AS financialstatements 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 conclusion thereon. In connection with ouraudit of the standalone Ind AS financial statements our responsibility is to read theother information and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 total comprehensive income changes in equityand cash flows of the Company in accordance with the Indian Accounting Standards (Ind AS)and other accounting principles generally accepted in India including the AccountingStandards specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgements and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements management is responsible forassessing the Company’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company’s financialreporting process.

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

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs 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 standalone financial statements.

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

Identify and assess the risks of material misstatement of the standalone 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 financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances.

Under Section 143(3)(i) of the Act we are also responsible for expressing our opinionon whether the Company and its subsidiary companies which are companies incorporated inIndia has adequate internal financial controls system in place and the operatingeffectiveness of 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 concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern.

If we conclude that a material uncertainty exists we are required to draw attention inour auditor’s report to the related disclosures in the standalone financialstatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor’s report.However future events or conditions may cause the Company to cease to continue as a goingconcern.

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation. We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit. 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.

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 thematter or when 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 outweigh the public interest benefits of such communication

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 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 Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flows dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.

(e) On the basis of the written representations received from the Directors as on 31March 2021 taken on record by the Board of directors none of the Directors isdisqualified as on 31 March 2021 from being appointed as a Director in terms of Section164(2) of the Act.

(f) controls over financial reporting of the Company and the operating effectiveness ofsuch With respect to the adequacy of the internal financial controls refer to ourseparate report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the internal financial control over financialreporting of those companies for reasons stated therein.

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

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions 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 does not have any pending litigations which would impact its financialstatements.

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the company.

2. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government in terms of sub section (11) of Section 143of the Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

For DOOGAR & ASSOCIATES
Chartered Accounts
FRN: 000561N
Sd/-
Mukesh Goyal
Place: New Delhi Partner
Date: 17th May 2021 M. No.: 081810
UDIN: 21081810AAAACP3199

Annexure ‘A’ to Independent Auditors’ Report

(Referred to in paragraph (1) (f) under the head ‘Report on Other Legal andRegulatory Requirements’ of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act ("the Act") to the members of SBEC SYETEMS (INDIA)LIMITED on the financial statements for the year ended March 31 2021

We have audited the internal financial control with reference to financial statement ofSBEC SYSTEMS (INDIA) LIMITED ("the Company") as of March 31 2021 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 Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors’ Responsibility

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 prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of internal financial controls and both issued by the ICAI.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting 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 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 effectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor’s judgment including the assessment of the risks of materialmisstatement 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting 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 havea 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 override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

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 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note of Audit ofInternal Financial controls over financial reporting issued by the Institute of CharteredAccountants of India.

For DOOGAR & ASSOCIATES
Chartered Accounts
FRN: 000561N
Sd/-
Mukesh Goyal
Place: New Delhi Partner
Date: 17th May 2021 M. No.: 081810
UDIN: 21081810AAAACP3199

Annexure "B’’ to the Independent Auditors’ Report

Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" of even date to the member on the financial statements of SBECSYSTEMS (INDIA) LIMITED for the year ended 31 March 2021.

i) Fixed Assets:

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

b) The Company has a programme of physical verification to ensure that all the assetsare verified at reasonable intervals which in our opinion is reasonable having regard tothe size of the company and the nature of its assets. As per the information andexplanation given to us management is unable to conduct physical verification of fixedassets as on the date of financial statements due to Government imposed lockdown andhence discrepancies if any have not been ascertain for the necessary adjustments in thebooks of accounts.

ii) Inventories: The Company has no stock.

iii) Transactions with parties u/s 189 of the Companies Act 2013 The company hasnot granted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties during the year covered in the register maintained underSection 189 of the Companies Act 2013

iv) In our opinion the Company has not entered in to any transaction covered underSections 185 of the Act.

v) In our opinion the Company has complied with provisions of Sections 186 of theAct.

vi) The Company does not have any loans or borrowing from any financialinstitution banks government or debenture holders during the year. Accordingly paragraph3 (Viii) of the order is not applicable.

vii) Cost records as prescribed by the central government under clause (d) of subsection (1) of Section 148 of the Act is not applicable to the company.

viii) Deposits

The Company has not accepted any deposits during the year or in earlier years which arecovered under the directives issued by the Reserve Bank of India and the provisions ofSection 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rulesframed there under.

ix) Statutory Dues

a) According to the books and records examined by us and information and explanationsgiven to us the Company is regular in depositing the undisputed statutory dues includingProvident Funds Income tax Tax deducted at source and other statutory dues asapplicable with the appropriate authorities during the year.

b) According to the books and records examined by us and information and explanationsgiven to us there were no undisputed dues as on 31 March 2021.

x) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debts instruments) and term loans and hence the application ofsuch money for the specified purposes does not arise.

xi) Based upon the audit procedures performed and on the basis of information andexplanations provided by the management we report that no fraud by the company or anyfraud on the company by its officers or employees has been noticed or reported during theyear under audit.

xii) The managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theCompanies Act 2013.

xiii) The company is not a Nidhi Company and hence the clause is not applicable.

xiv) According to the records of the company and information and explanationprovided to us all transactions with the related parties are in compliance with Sections177 and 188 of Companies Act 2013 where applicable and the details have been disclosed inthe Financial Statements as required by the applicable accounting standards.

xv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review as such therequirement of Section 42 of the Companies Act as covered under the clause is notapplicable to the company.

xvi) As per the records of the company and information and explanation provided tous the company has not entered into any non-cash transactions with directors or personsconnected with him and hence the clause is not applicable.

xvii) The company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934.

For DOOGAR & ASSOCIATES
Chartered Accounts
FRN: 000561N
Sd/-
Mukesh Goyal
Place: New Delhi Partner
Date: 17th May 2021 M. No.: 081810
UDIN: 21081810AAAACP3199

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