Shilpi Cable Technologies Ltd.
|BSE: 533389||Sector: Engineering|
|NSE: SHILPI||ISIN Code: INE510K01019|
|BSE 00:00 | 15 May||Shilpi Cable Technologies Ltd|
|NSE 05:30 | 01 Jan||Shilpi Cable Technologies Ltd|
|BSE: 533389||Sector: Engineering|
|NSE: SHILPI||ISIN Code: INE510K01019|
|BSE 00:00 | 15 May||Shilpi Cable Technologies Ltd|
|NSE 05:30 | 01 Jan||Shilpi Cable Technologies Ltd|
The Members of
Shilpi Cable Technologies Limited
Report on the Financial Statements
We have audited the accompanying standalone financial statements of Shilpi CableTechnologies Limited New Delhi ("the Company") which comprise the BalanceSheet as at March 312017 and the Statement of Profit and Loss and Cash Flow Statementfor the year then ended and a summary of significant accounting policies and otherexplanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters in section 134 (5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesestandalone financial statements that give a true and fair view of the state of affairs(financial position) and financial performance and Cash Flow Statement of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes the maintenance ofadequate accounting records in accordance with the provision of the Act for safeguardingof the assets of the Company and for preventing and detecting the frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimate that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial control that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit of standalone statements in accordance with the Standards onAuditing specified under section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the standalonefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thestandalone financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the standalone financial statements.
Basis for Qualified Opinion
Out of the total outstanding debtors mentioned in note No-16 overseas debtorsamounting to Rs.258.97 crore are outstanding for more than one year.Further sale ofRs.344.69 Cr has been done to these overseas debtors even there is no realisation in theseaccounts for last more than one year. The total figure of such outstanding overseasdebtors as on 31.03.2017 is Rs.603.67 Cr.We are of opinion that certainty of realisationof these debtors cannot be determined on the basis of evidence available to us.Consequently we were unable to determine whether any adjustments to these amounts werenecessary which in the opinion of the management is recoverable.
In our opinion except for the effects of the matter described in the Basis ofQualified Opinion paragraph above and to the best of our information and according to theexplanations given to us the financial statements give the information required by theAct in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:
a) In the case of the Balance Sheet of the state of affairs of the Company as at March312017;
b) In the case of the Profit and Loss Account of the Losses for the year ended on thatdate; and
c) In the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.
We further draw your attention to the following but our opinion is not qualified onthe basis of below given information:-
1. Company has settled debtors of Rs.181.15 crore against creditors by entering intotri-party memorandum of understanding (i.e MOU).Validity of the MOU is subject to vetting.
2. An amount of Rs.258.98 croreoverseas debtors are outstanding for more than one yearas on 31.03.2017 but no consideration realised within stipulated prescribed time as laiddown in FEMA which resulted non-compliance of FEMA.Consequence of non-compliance of FEMAare not quantifiable.
3. Going concern assumption
Due to significant losses during the year entire net worth of the company has beeneroded. However considering the customer's orders in hand and expected strategicinvestment in the company the financial statement has been prepared on going concernbasis.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure A statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. As required by section 143(3) of the Act we report that:
a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit except lending ofRs.124.20 crore to M/s Shilpi Worldwide DMCC (Wholly owned subsidiary at Dubai) which isclassified under non current assets.
b. In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
c. The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account.
d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e. On the basis of the written representations received from the directors we on March312017 and taken on record by the board of director none of the director of this companyis disqualified as on 31 March2017 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 B" to this report.
g. With respect to the other matters included in the Auditors Report and to the best ofour information and according to the explanation given to us :
I. Detail of pending litigation which are having financial impact is given in NoteNo-28 to the financialstatements.
II. As per information furnished to us the Company does not have any long-termcontracts including derivatives contracts for which there were any material foreseeablelosses.
III. There were no amounts which required to be transferred to the investor Educationand Protection Fund by the Company.
IV. The Company has provided requisite disclosures in Note 28 to these financialstatements as to the holdings of Specified Bank Notes on November 8 2016 and December 302016 as well as dealings in Specified Bank Notes during the period from November 8 2016to December 30 2016. Our procedures for reporting on these disclosures in accordance withthe books of account of the Company were limited to our enquiries and relying on themanagement representation regarding the holding and nature of cash transactions. Henceour report is solely based on the management representation for such information relatedto the holdings and dealings in Specified Bank Notes as included in such disclosure and wewere unable to perform alternative audit procedures.
"Annexure A" to the Independent Auditors' Report
Referred to in paragraph 1 under the heading Report on Other Legal &Regulatory Requirement' of our report of even date to the financial statements of theCompany for the year ended March 31 2017.
On the basis of such checks as we considered appropriate and in terms of theinformation and explanations given to us we further state as under:
1. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of its fixed assets in their ERP
(b) The assets have not been physically verified by management during the year.
(c) The title deeds of immovable properties are held in the name of the company.
2. (a) The management has conducted the physical verification of inventory atreasonable intervals.
(b) The discrepancies noticed on physical verification of the inventory as compared tobooks records which has been properly dealt with in the books of account were material andsame has been disclosed properly in the note No-28 to Financial Statement.
3. The Company has not granted loans secured or unsecured to companies firms LimitedLiability partnerships or other parties covered in the Register maintained under section189 of the Act. Accordingly the provisions of clause 3 (iii) (a) to (C) of the Order areapplicable to the Company.
4. In our opinion and according to the information and explanations given to us thecompany has not complied with the provisions of section 185 and I86 of the Companies Act2013 In respect of the following loans investments guarantees and security.
The company has extended loan/advances to Shilpi Cable Pvt Ltd of Rs.1.44 crores out ofwhich received back Rs.1.20 crores and Rs.24 Lakhs still pending as on 31.03.2017.
Also the company has extended guarantee to its wholly owned subsidiary ShilpiWorldwide DMCC Dubai of Rs 508.98 Cr for availing working capital facilities from bank.
5. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Companies Act and the Companies (Acceptance of Deposit) Rules2015 with regard to the deposits accepted from the public are not applicable.
6. As informed to us the maintenance of Cost Records has been specified by the CentralGovernment under subsection (1) of Section 148 of the Act in respect of the activitiescarried on by the company and the company is maintaining such records
7. (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Valueadded Tax Cess and any other statutory dues with the appropriate authorities. Accordingto the information and explanations given to us no undisputed amounts payable in respectof the above were in arrears as at March 312017 for a period of more than six months fromthe date on when they become payable.
b) According to the information and explanation given to us there are statutory dueswhich have not been deposited on account of any dispute detail is given below:-
8. According to the information and explanations given to us and based on the documentsand records produced to us the company has defaulted in repayment of dues detail givenbelow:-
There is default of Rs.95.42 Crore in working capital limit as on 31st March 2017
9. Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommentedupon.
10. Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during theyear.
11. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided isexceeding the limit given under the Act in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act anddetail is as following:
12. The Company is not a Nidhi Company. Hence this clause is not applicable on it.
13. In our opinion all transactions with the related parties are in compliance withsection177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
14. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3(xiv) of the Order are not applicable tothe Company.
15. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3(xv) ofthe Orders are not applicable to the company.
16. In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934. Accordingly the provisions of clause 3(xvi) of theOrders are not applicable to the company.
"Annexure B" to the Independent Auditor's Report of even date on theFinancial Statements of SHILPI CABLE TECHNOLOGIES LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financial reporting of SHILPICABLE TECHNOLOGIES LIMITEDas of March 312017 in conjunction with our audit of theStandalone 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 These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
A uditors' 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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud orerror.
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 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 2017 except accountingof inventory in ERP which has been taken care by physical verification of inventory.