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Shakti Pumps (India) Ltd.

BSE: 531431 Sector: Engineering
NSE: SHAKTIPUMP ISIN Code: INE908D01010
BSE 00:00 | 05 Dec 409.00 -11.40
(-2.71%)
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405.00

NSE 00:00 | 05 Dec 408.60 -10.35
(-2.47%)
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OPEN 420.40
PREVIOUS CLOSE 420.40
VOLUME 14477
52-Week high 711.15
52-Week low 392.85
P/E 18.71
Mkt Cap.(Rs cr) 752
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 420.40
CLOSE 420.40
VOLUME 14477
52-Week high 711.15
52-Week low 392.85
P/E 18.71
Mkt Cap.(Rs cr) 752
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shakti Pumps (India) Ltd. (SHAKTIPUMP) - Auditors Report

Company auditors report

To the Members of SHAKTI PUMPS (INDIA) LIMITED

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

OPINION

We have audited the accompanying Standalone Financial Statements of Shakti Pumps(India) Limited ("the Company") which comprise the Balance sheet as at 31stMarch 2021 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the Standalone Financial Statements including a summaryof significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at 31st March 2021 its profitincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

BASIS FOR OPINION

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing (SAs) as specified under Section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the 'Auditors’Responsibilities 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 by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the Standalone Financial Statements.

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.These matters were addressed in the context of our audit of the standalone financialstatements and in forming our opinion thereon and we do not provide a separate opinionon these matters. We have determined the matters described below to be the key auditmatters to be communicated in our report.

Sr. Key Audit Matter No. Auditor’s Response
1 Evaluation of uncertain tax positions Principal Audit Procedures
The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Refer Notes 32 to the Standalone Financial Statements Obtained details of completed tax assessments and demands for the year ended 31st March 2021 from management. We involved our internal experts to challenge the management’s underlying assumptions in estimating the tax provision and the possible outcome of the disputes. Our internal experts also considered legal precedence and other rulings in evaluating management’s position on these uncertain tax positions. Additionally we considered the effect of new information in respect of uncertain tax positions as at 1st April 2020 to evaluate whether any change was required to management’s position on these uncertainties.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORS’ REPORT THEREON

The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual Report but does notinclude the Standalone Financial Statements and our auditors’ 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 such other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. 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 financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue 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 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 responsible for overseeing the Company’s financialreporting process.

Auditor's Responsibility

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. 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 part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism 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 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 materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor’s report. However future events or conditionsmay cause the Company to cease to continue 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 with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor’s report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements 1. As required by Section 143(3) ofthe 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 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) the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;

d) in our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards prescribed under Section 133 of the Act; read with Companies (IndianAccounting Standards) Rules 2015 as amended;

e) on the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 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 A’; and

g) In our opinion the managerial remuneration for the year ended 31st March 2021 hasbeen paid/provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to 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 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements- Refer Note No. 32 of financialstatements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education 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 Section 143(11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order

For PGS & Associates
Chartered Accountants
Firm Registration Number: 122384W
UDIN: 21111592AAAACR1826
Premal Gandhi
Place: Mumbai Partner
Date: 17th May 2021 Membership Number: 111592

ANNEXURE- A TO THE INDEPENDENT AUDITORS' REPORT

The Annexure A referred to in our Report of even date to the Members of Shakti Pumps(India) Limited ("the Company") on the financial statements for the year ended31st March 2021.

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3COMPANY OFSECTION 143 OF THE COMPANIES ACT 2013 (‘THE ACT')

We have audited the internal financial controls over financial reporting of ShaktiPumps (India) Limited ('the Company’) as of 31st March 2021 in conjunction with ouraudit of the Ind AS financial statements of the Company for the year ended on 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 over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting 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 including adherence to respective 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.

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 issued by ICAI and deemed to beprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wereestablished and maintained and if such controls operated effectively in all materialrespects.

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 judgment including the assessment of the risks ofmaterial misstatement of the Ind AS 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 Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A Company’s internal financial controlover financial 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 Ind AS financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorisations of Management and directors of the Company; and

3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company’s assets that could havea material effect on the Ind AS 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.

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 31st March 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.

For PGS & Associates
Chartered Accountants
Firm Registration Number: 122384W
UDIN: 21111592AAAACR1826
Premal Gandhi
Place: Mumbai Partner
Date: 17th May2021 Membership Number: 111592

ANNEXURE- B TO THE INDEPENDENT AUDITORS' REPORT ON THE IND AS FINANCIAL STATEMENTS

The Annexure-B referred to in the Independent Auditors’ Report of even date to theMembers of Shakti Pumps (India) Limited ('the Company’) on the financial statementsfor the year ended 31st March 2021 we report that:

I. IN RESPECT OF ITS FIXED ASSETS:

a. The Company has maintained proper records showing full including quantitativedetails and situation of fixed assets in respect of all its locations on the basis ofavailable information.

b. As explained to us all the fixed Assets have been physically verified during theyear by the management in accordance with a regular programme of verification of the fixedassets at reasonable intervals which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. According to the information andexplanation given to us no material discrepancies were noticed on such physicalverification.

c. As per the records and information and explanation given to us title deeds ofimmovable properties are in the name of the Company.

II. IN RESPECT OF ITS INVENTORIES:

a. The inventory has been physically verified by the management during the year atreasonable interval. In our opinion the frequency of verification is reasonable.

b. In our opinion the procedures of physical verification of inventory followed by themanagement are reasonable and adequate in relation to the size of the Company and natureof its business.

c. On the basis of our examination of the inventory records in our opinion theCompany is maintaining proper records of inventory. As explained to us there was nomaterial discrepancies noticed on physical verification.

iii. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii) (a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.

iv. I n our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the Company.

v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 ofthe Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordinglythe provisions of clause 3(v) of the Order are not applicable.

vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148(1) of the Companies Act 2013 related to the manufacture of electrical goods and areof the opinion that prima facie the specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same.

vii. (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees’ state insurance income-tax GSTduty of custom cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees’ state insurance income-tax duty ofcustom cess and other statutory dues were outstanding at the year end for a period ofmore than six months from the date they became payable.

(c) According to the records of the Company the dues of income-tax Commercial Taxwhich have not

ANNEXURE- B TO THE INDEPENDENT AUDITORS’ REPORT ON THE IND AS FINANCIAL STATEMENTS(Contd.)

been deposited on account of any dispute are as follows.

Name of Statute Nature of Dues Period in which the Amount relates (FY) Amount Involved (' Lakhs) Unpaid (' Lakhs) Forum where the dispute is pending
Commercial Tax Entry Tax 2010-11 7.39 7.39 M.P High Court Indore Bench
Commercial Tax CST 2010-11 0.91 0.12 M.P Commercial Tax Appellate Board Bhopal
Commercial Tax VAT & CST 2012-13 12.07 3.27 M.P Commercial Tax Appellate Board Bhopal
Commercial Tax CST 2014-15 9.99 7.49 Appellate Authority Commercial Tax Indore
Commercial Tax CST 2015-16 16.61 12.41 Appellate Authority Commercial Tax Indore
Commercial Tax VAT & CST 2016-17 30.17 20.80 Appellate Authority Commercial Tax Indore
Commercial Tax CST 2015-16 2.20 2.20 Commercial Tax Department Delhi
Commercial Tax CST 2015-16 0.04 0.04 Commercial Tax Department Ahmedabad
Commercial Tax VAT & CST 2015-16 3.53 3.53 Commercial Tax Department Pune
Commercial Tax VAT & CST 2016-17 3.39 3.39 Commercial Tax Department Pune
Commercial Tax CST 2016-17 0.12 0.12 Commercial Tax Department Vijaywada
Commercial Tax CST 2016-17 1.63 1.63 Commercial Tax Department Secundrabad
Commercial Tax CST 2017-18 6.34 6.34 Commercial Tax Department Secundrabad
Income Tax Act 1961 Income Tax 2009-10 to 2011-12 1484.77 1189.60 ITAT Appeal Indore
Income Tax Act 1961 Income Tax 2012-13 to 2016-17 2274.87 1820.00 CIT Appeal Bhopal
Customs Act 1962 DRI & Custom Duty 2014-18 971.95 350.47 CESTAT New Delhi

viii. I n our opinion and according to the information and explanations given by themanagement we are of the opinion that the Company has not defaulted in repayment of duesto banks. The Company did not have any outstanding dues in respect of a financialinstitution or debenture holders or government.

ix. According to the information and explanations given by the management the Companyhas not raised any money by way of initial public offer/ further public offer/ debtinstruments and term loans hence reporting under clause (ix) is not applicable to theCompany and hence not commented upon.

x. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the Company or no material fraud onthe Company by the officers and employees of the Company has been noticed or reportedduring the year.

xi. According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

xii. I n our opinion the Company is not a nidhi Company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

xiii. According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company and not commented upon.

xv. According to the information and explanations given by the management the Companyhas not entered into any non cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.

xvi. According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For PGS & Associates
Chartered Accountants
Firm Registration Number: 122384W
UDIN: 21111592AAAACR1826
Premal Gandhi
Place: Mumbai Partner
Date: 17th May2021 Membership Number: 111592

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