To the Members of
M/s SHREE MANUFACTURING CO LTD
Report on the Financial Statements
We have audited the accompanying standalone Ind AS financial statements of ShreeManufacturing Company Limited ( the Company ) which comprise the balance sheet as at 31March 2017 the statement of profit and loss the statement of cash flows and thestatement of changes in equity for the year then ended and a summary of the significantaccounting policies and other explanatory information (herein after referred to asstandalone Ind AS financial statements ).
Management s Responsibility for the Financial 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 of thesestandalone Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed underSection 133 of the Act read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Auditor s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financialstatements based 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 in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor s judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company s preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.
Basis of Qualified Opinion
We draw the attention to the fact that the company is having accumulated loss of Rs942.42 Lakhs as at the year ended 31-03-2017 which is more than its net worth the companyhas to be treated as sick as per the provision of SICA 1985. The company does not haveany particular business and as the company has sold all its fixed assets and there are norevenue generated during the year along with other matters set out in the notes of thefinancial statements the substantial doubt arise whether the company will be able tocontinue as going concern.
Further 287000 12% Cumulative preference shares of Rs. 100 Each fully paid up wasredeemable in three equal instalments during the year 2004-05 2005-06 and 2006-07. Butsame has not been redeemed till date.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effect of the matter described in the basis for qualifiedopinion paragraph the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India including the IndAS of the financial position of the Company as at 31 March 2017 and its financialperformance including its cash flows and the changes in equity for the year ended on thatdate.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor s Report) Order 2016 ( the Order ) issued bythe Central Government of India in terms of section 143(11) of the Act we give in theAnnexure A a statement on the matters specified in the paragraph 3 and 4 of the order.
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 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;
(c) the balance sheet the statement of profit and loss the statement of cash flowsand the statement of changes in equity dealt with by this Report are in agreement with thebooks of account;
(d) in our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with relevant ruleissued thereunder;
(e) on the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 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 ; and
g) with respect to the other matters to be included in the Auditor s Report inaccordance with Rule11 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 does not have any pending litigations on its financial position in itsstandalone Ind AS financial statements;
ii. the Company has not made provision as required under the applicable law oraccounting standards for the foreseeable liability on redemption of redeemable preferenceshares - Refer Note 3 C to the standalone Ind AS financial statements;
iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; and
iv. the Company has provided requisite disclosures in its standalone Ind AS financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8 November 2016 to 30 December 2016 and these are in accordance with the books ofaccounts maintained by the Company.
For DPSY & Associates
Firm s registration number: 135764W
Membership number: 407205
May 30 2017
Annexure - A to the Auditors Report
The Annexure referred to in Independent Auditors Report to the members of the Companyon the standalone Ind AS financial statements for the year ended 31 March 2017 we reportthat: I. As the Company does not hold any fixed assets for the year the requirement ofclause (i) of paragraph 3 of the Order is not applicable to the company. II. As theCompany does not hold any inventories for the year the requirement of clause (ii) ofparagraph 3 of the Order is not applicable to the company. III. The company has notgranted any loans secured or unsecured to/from companies firms or other parties coveredin the register maintained u/s 189 of the Act.
The Company has not purchased any goods or fixed assets and affected any sales duringthe year thus requirement of clause (iv) of the Order are not applicable to the Company.IV. The company has not granted any loans secured or unsecured under section 185 madeany investment provided any guarantee or security. Hence the question of reporting underthe cause 3(iv) of the order does not arise. V. In our opinion and according to theinformation and explanation given to us the Company has compiled with the directivesissued by the Reserve Bank of India and the provision of section 73 to 76 or any otherrelevant provision of the Companies Act and the rules framed there under to the extentapplicable. We are informed by the Management that no order has been passed by the CompanyLaw Board or National Company Law Tribunal or Reserve Bank of India or any court or anyTribunal in this regard. VI. As informed to us the Central Government has not prescribedmaintenance of Cost Records under subsection (1) of the section 48 of the Act. VII.
a. According to the information and explanation given to us and according to records ofthe Company examined by us in our opinion the Company is generally regular in depositingwith the appropriate authorities undisputed statutory dues including Provident fundemployees state insurance income tax sales tax wealth tax customs duty excise dutycess and other material statutory dues wherever applicable. According to the informationand explanation given to us no undisputed amount payable in respect of aforesaid dueswere outstanding as at March 31 2017 for more than six months from the date they becamepayable. b According to the information and explanation given to us there are no disputedamounts payable in respect of income tax Sales tax Wealth tax Customs duty Excise dutyand Cess outstanding as at the year end. VIII. As per explanation given to us no fraud onor by the company has been noticed for reported We have been informed that the Company hasnot defaulted in repayment of loan or borrowings to financial institution banks andGovernment The Company has not raised any funds through debentures. IX. The Company hasnot raised money by the way of initial public offer or further public offer (includingdebt instrument). X. The Company has not raised money by the way of initial public offeror further public offer (including debt instrument). XI. The managerial remuneration hasbeen paid in accordance with the requisite approvals mandated by the provision of section197 read with schedule V to the Act. XII. The Company is not a chit fund or a Nidhicompany. Hence the question of reporting under clause 3(xii) of the order does not arise.XIII. The Company has compiled with the provision of section 177 and 188 of the in respectof transaction with the related parties and the details have been disclosed in theFinancial Statement etc as required by the applicable accounting standards. XIV. TheCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year. XV. The Company has not entered into anynon-cash transaction with directors or person connected with him covered under theprovision of section 192 of the Act. XVI. The Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.
|FOR DPSY & Associates || |
|Chartered Accountants || |
|Firm s registration number: 135764W || |
|Swati Sethia || |
|Partner ||Mumbai |
|Membership number: 407205 ||May 30 2017 |
Annexure - B to the Auditors Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ( the Act )
We have audited the internal financial controls over financial reporting of ShreeManufacturing Company limited ( the Company ) as of 31 March 2017 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat 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 ( ICAI ). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
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 Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand 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 judgment including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
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 31 March 2017 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 Institute of CharteredAccountants of India.
For DPSY & Associates
Firm s Registration Number: 135764W
Membership Number: 407205
May 30 2017