Shanthi Gears Ltd.
|BSE: 522034||Sector: Auto|
|NSE: SHANTIGEAR||ISIN Code: INE631A01022|
|BSE 00:00 | 30 Oct||101.40||
|NSE 00:00 | 30 Oct||101.45||
|Mkt Cap.(Rs cr)||778|
|Mkt Cap.(Rs cr)||777.74|
Shanthi Gears Ltd. (SHANTIGEAR) - Auditors Report
Company auditors report
TO THE MEMBERS OF SHANTHI GEARS LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Shanthi Gears Limited("the Company") which comprise the Balance Sheet as at 31 March 2020 and theStatement of Profit and Loss (including Other Comprehensive Income) the Statement of CashFlows and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Companies Act2013 ("the Act") in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended ("IndAS") and other accounting principles generally accepted in India of the state of aairs of the Company as at March 31 2020 and its profit total comprehensive income itscash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibility 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 made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.
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. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
Information Other than the Financial Statements and
Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of otherinformation. The other information comprises the information included in the Board'sReport & Management Discussion and Analysis including annexures to the Board ReportCorporate Governance and Shareholder's Information but does not include the financialstatements 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 our 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.
Management's Responsibility for the 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 financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity 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 financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibility 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:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriateto provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error asfraud may involve collusion forgery intentional omissions misrepresentationsor the override of internal control.
Obtain an understanding of internal financial control relevant to theaudit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by themanagement.
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 doubton the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's reportto the related disclosures in the 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 orconditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be in uenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
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 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 thebest of 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 and the reports of theother auditors
c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the Statement of Cash Flows and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the Ind ASspecified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as onMarch 31 2020 taken on record by the Board of Directors none of the directors aredisqualified as on March 31 2020 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 unmodi ed opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
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 yearis in accordance 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 amendedin our opinion and to the best of our information and according to the explanations givento us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements;
ii. The Company did not have any long-term contracts including derivative 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 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
Report on Internal Financial Controls Over Financial Reporting
(Referred to in paragraph 1 (f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ShanthiGears Limited ("the Company") as of March 31 2020 in conjunction with our auditof the Ind AS financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting 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 theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.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 operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2020 based on the criteria forinternal financial control over financial reporting 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 Institute of CharteredAccountants of India.
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under "Report on Other Legal and RegulatoryRequirements" section of our report of even date)
i. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets.
b) Some of the fixed assets were physically veri ed during the year by the Managementin accordance with a programme of veri cation which in our opinion provides for physicalveri cation of all the fixed assets at reasonable intervals. According to the informationand explanation given to us no material discrepancies were noticed on such veri cation.
c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed provided to us we reportthat the title deeds comprising all the immovable properties of land and buildings whichare freehold are held in the name of the Company as at the balance sheet date.
ii. As explained to us the inventories were physically veri ed during the yearby the Management at reasonable intervals and no material discrepancies werenoticed on physical veri cation.
iii. The company has not granted any loans secured or unsecured to companiesrms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013.
iv. The Company has not granted any loans made investments or providedguarantees and hence reporting under clause (iv) of the CARO 2016 is notapplicable.
v. According to the information and explanations given to us the Company has notaccepted any deposit during the year to which the provisions of Sections 73 to 76 or anyother relevant provisions of Companies Act 2013 were applicable.
vi. The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013 for Gears and Accessories. We have broadlyreviewed the cost records maintained by the Company pursuant to the Companies (CostRecords and Audit) Rules 2014 as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act 2013 and are of the opinion that primafacie the prescribed cost records have been made and maintained. We have however notmade a detailed examination of the cost records with a view to determine whether they areaccurate or complete.
vii. According to the information and explanations given to us in respect of statutorydues:
a. The Company has been generally regular in depositing undisputed statutorydues including Provident Fund Employees' State Insurance Income- tax Service TaxGoods and Services Tax Cess and other material statutory dues applicable to it to theappropriate authorities.
b. There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Goods and Services Tax Cess and other material statutorydues in arrears as at March 31 2020 for a period of more than six months from the datethey became payable.
c. Details of dues of Income-tax Excise Duty Service Tax and which have not beendeposited as on March 31 2020 on account of disputes are given below:
viii. The Company has not taken any loans or borrowings from financialinstitutions banks and government or has not issued any debentures. Hencereporting under clause (viii) of CARO 2016 is not applicable to the Company.
ix. The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) or term loans and hence reportingunder clause (ix) of the CARO 2016 Order is not applicable
x. To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company and no material fraud on the Companyby its Officer s or employees has been noticed or reported during the year.
xi. In our opinion and according to the information and explanations given tous the Company has paid / provided managerial remuneration in accordancewith the requisite approvals mandated by the provisions of section 197 read withSchedule V to the Companies Act 2013.
xii. The Company is not a Nidhi Company and hence reporting under clause (xii)of the CARO 2016 Order is not applicable.
xiii. In our opinion and according to the information and explanations given tous the Company is in compliance with Section 177 and 188 of the CompaniesAct 2013 where applicable for all transactions with the related parties and thedetails of related party transactions have been disclosed in the financialstatements as required by the applicable accounting standards.
xiv. During the year the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures and hencereporting under clause (xiv) of CARO 2016 Order is not applicable to the Company.
xv. In our opinion and according to the information and explanations given tous during the year the Company has not entered into any non-cash transactionswith its directors or persons connected with them and hence provisions of section192 of the Companies Act 2013 are not applicable.
xvi. The Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.