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|
|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|
TO THE MEMBERS OF SBEC SYSTEMS (INDIA) LIMITED
Report on the Financial Statements
We have audited the accompanying standalone financial statements of M/s SBEC SYSTEMS(INDIA) LIMITED (the Company') which comprise the Balance Sheet as at 31 March2019 and the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash flows for the year endedincluding a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the Standalone Financial Statements").
In our opinion and to the best of our information and according to the explanationsgiven to usexcept for the possible effects of the matter described in the BasisforQualified Opinion section of our report the aforesaid standalone financial statementsgive the information required by the Companies Act2013 ("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 2015as amended ("Ind AS") and other accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2019 and the loss and total comprehensive income(loss) changes in equity and itscash flows for the year ended on that date.
Basis for Qualified Opinion
We draw attention to Note No.26 of the financial statement the Company has notcomplied with the Ind AS requirements regarding reversal of provision for diminution ofcurrent quoted investment aggregating to Rs.665.94 Lacs. Had the company reversed theexisting provision as per IND AS requirement 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 financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the Standalone Financial Statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone financial statements.
Emphasis of Matters
We draw attention to note no 25 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 the Company'sability 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 financial statements of the current period. Wehave determined that there are no key audit matters to communicate in our report.
Information Other than the Standalone 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 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 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 during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information we are required to report that fact. We have nothing to reportin this regard.
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 financial statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the Indian Accounting Standards (Ind AS) and otheraccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; 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 financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.
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.
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 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 SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany and its subsidiary companies which are companies incorporated in India hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
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 withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits 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 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 over financialreporting of the Company and the operating effectiveness of such 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 in accordance with the requirements of section 197(16) of the Act asamended:
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) Order2016 ("the Order")issued by the Central Government in terms of sub section (11) of section 143 of the Actwe give in "Annexure B" a statement on the matters specified in paragraphs 3 and4 of the Order.
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 312019
We have audited the internal financial control with reference to financialstatement of SBEC SYSTEMS (INDIA) LIMITED ("the Company") as of March 312019in conjunction with our audit of the financial statements of the Company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaininginternal financial controls based on the internal control with reference to financialstatement 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 (ICAI).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 of reliablefinancial information as required under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing 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 theadequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system 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 themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312019 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.
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 SBEC SYS-TEMS(INDIA) LIMITED for the Year ended 31st March 2019.
i) Fixed Assets:
The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
The fixed assets have been physically verifying by the management during the year andno material discrepancies were noticed on such verification.
ii) Inventories: The Company has no stock.
iii) Transactions with parties u/s 189 of the Companies Act 2013
The company has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties during the year covered in the register maintainedunder section 189 of the Companies Act2013
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 the Act.
vi) The Company does not have any loans or borrowing from any financial institutionbanksgovernment or debenture holds during the year. Accordinglypara- graph 3 (Viii) ofthe 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.
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 FundsIncome taxTax deducted at source and other statutory dues as applicablewith 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 31st March 2019.
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 explanation providedto us all transactions with the related parties are in compliance with sections 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
xv) The company has not made any preferential allotment or private placement of sharesor 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 to usthe 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 the ReserveBank of India Act 1934.