The Members of Sunil Hitech Engineers Limited
We have audited the accompanying financial statements of M/s Sunil Hitech EngineersLimited ("the Company") which comprise the Balance Sheet as at 31st March2018 the Statement of Profit and Loss including the statement of Other ComprehensiveIncome the Cash Flow and Statement and the Statement of Changes in Equity for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.
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 preparationand presentation of these standalone Ind
AS financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and changes inequity of the Company in accordance the accounting principles generally accepted in Indiaincluding the
Accounting Standards specified under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgements and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls 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 Ind AS financial statements basedon our audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement. An audit involves performing procedures to obtain audit evidenceabout the amounts and the disclosures in the 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 riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone Ind AS financial statements that give a true and fair viewin order to design audit procedures that are appropriate in the circumstances. An auditalso includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS financial statements. Webelieve that the audit evidence we have obtained is appropriate to provide a basis for ouraudit opinion on the standalone Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31stMarch 2018 and its profit including other the changes in equity forthe comprehensiveincomeits cash flows year ended on that date.
Emphasis of Matter
We draw your attention to income from operations/net sales presented in the financialstatements which includes project related claims for Rs. 491.21 crores the recoverabilityof which depends on the outcome of negotiations/ arbitrations with the customers. OurOpinion is not modified in respect of the same.
Report on Other Legal and Regulatory withRequirements
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of subsection (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" statement on the mattersspecified in the paragraphs 3 and 4 of the Order to the extent applicable.
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.
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 BalanceSheettheStatement Profitand Loss including the Statement of OtherComprehensive Income the Cash Flow Statement 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 AccountingStandards specified under Section 133 of the Act with read with the Companies (IndianAccounting Standards) Rules 2015 as amended
e. On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in terms of Section164 (2) of the Act.
f. 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 Ind As financial statements Refer disclosure note B to thefinancial statements.
ii. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.
iii. There were no amounts required to be transferred to the Investor Education andProtection Fund by the Company.
For and on Behalf of
K. K. MANKESHWAR & CO.
Membership No. 049354
Dated : 30th May 2018
The annexure referred to in our independent auditor's report to the members of M/s.Sunil Hitech Engineers Limited ("The Company") on the Financial Statements forthe year ended 31st March 2018 we report that:
i. In respect of Fixed Assets:
a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets except location wise details of some ofthe moveable assets shifted/transferred amongst various sites;
b) The fixed assets have been physically verified by the management during the yearunder its regular programme of verification which in our opinion is reasonable havingregard to the size of the company and the nature of its assets. No material discrepancieswere noticed on such physical verification.
c) According to the information and explanation given to us by the management thetitle deeds of immovable properties are held in the name of the company.
ii. Physical verification of inventory has been conducted at reasonable intervals bythe management. In our opinion the procedures of physical verification of inventoryfollowed by the management is reasonable and adequate in relation to the size of thecompany and the nature of its business and no material discrepancies were noticed on suchphysical verification.
iii. In respect of Loans and Advances:
a) The company has granted unsecured loans to four companies covered in the registermaintained under section 189 of the Companies Act 2013. The maximum amount outstandingduring the year and amount outstanding at year end is Rs. 608.68 lakhs.
b) The rate of interest wherever charged and other terms & conditions thereof areprima facie not prejudicial to the interest of the company except for one loan granted toa subsidiary on account of the fact that loan is non-interest bearing.
c) There is no overdue amount for more than ninety days.
iv. According to the information and explanation given to us the company has compliedwith the provision of section 185 and 186 of the Companies Act 2013 in respect of loansguarantees investments and securities.
v. The Company has not accepted any deposits from public within the meaning of sections73 to 76 or any other relevant provision of the Companies Act and the rules framed thereunder where applicable.
Therefore the said clause is not applicable to the Company.
vi. The Central Government has prescribed maintenance of cost records under sub section(1) of section 148 of the Companies Act 2013 in respect of one of the productsmanufactured by the company. We have broadly reviewed the accounts and records of thecompany and are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have not however carried out a detailed examination of theaccounts and records with a view to determine whether these are accurate or complete.
vii. In respect of statutory dues:
a) Undisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of custom duty of excise value added tax goodsand service tax cess and other statutory dues have not been regularly deposited with theappropriate authorities and there has been serious delays in a large number of cases.
b) According to the information and explanations given to us undisputed duesoutstanding as at 31st March 2018 for a period more than six months from the date theybecome payable are as under:
|Statue ||Particulars ||Amount (In Rs. lakhs) ||Due date ||Date of Payment |
|Employees Provident ||Provident Fund ||9.55 ||15-06-2017 &15-10-2017 ||April 2018 |
|Fund and Miscellaneous Provisions Act 1952 || || || || |
|Employees Provident Fund and Miscellaneous Provisions Act 1952 ||Provident Fund ||33.31 ||15-04-2017 to 15-08- 2017 ||Unpaid |
c) According to the information and explanations given to us based on the records ofthe company examined by us there are no dues of Income Tax Sales tax Service TaxCustoms duty Wealth Tax Excise Duty and Cess which have not been deposited on account ofa dispute except as enumerated herein below which are pending before respectiveauthorities as mentioned there against.
|Name of the statute ||Nature of dues ||Amount (In Rs. lakhs) ||Period to which amount relates (FY) ||Forum where dispute is pending |
|Service tax under Finance Act 1994 & The Central Excise Act 1994 ||Service Tax (Basic & Penalty) ||1083.52 ||2005-06 to 2013-14 ||Custom Excise Service Tax Appellate Tribunal |
|The Customs Act 1962 ||Customs duty ||138.17 ||2007-08 2008-09 ||Commissioner of Customs (Im- port) Mumbai |
|The Income-Tax Act 1961 ||Income Tax ||283.81 ||2008-09 2004-05 ||Income Tax Appellate Tribunal Mumbai |
|The Income-Tax Act 1961 ||Income Tax ||94.74 ||2008-09 2009-10 ||CIT Appeals Nagpur |
viii. According to the information and explanation given to us the Company hasdefaulted in repayment of certain loans to the lenders as on the reporting date. Detailsof default to the Financial Institutions are as follows:
|Particulars ||Amount of default as at Balance Sheet Date (In Rs. lakhs) ||Period of Default ||Remarks |
|L&T Family Credit Limited ||400.00 ||Two months ||The financer has revoked the Bank Guar - antee issued by the Company against loan amount and recovered the unpaid dues. |
ix. According to the information and explanations given to us Company has not raisedmoney by way of initial public offer or further public offer (including debt instruments).In our opinion and according to the explanations given to us the term loans were appliedfor the purposes for which those were raised.
x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
xi. In respect of payment of managerial remuneration within the prescribed limits underprovisions of Section 197 of the Companies Act 2013 (the Act') a) The company hadpaid managerial remuneration of Rs. 196 lakhs over and above the limits prescribed byprovisions of Section 197 read with Schedule V of the Act.
b) The Company is in the process of ratification of the managerial remuneration paid toManaging Director and Whole-time Director during the said period by member's resolutionunder provisions of Section 196 and 197 read with Schedule V of the Act. Further the Boardof Directors is yet to decide on refund/ ratification/adjustment of managerialremuneration paid to
Non-Executive Director of the Company.
xii. In our opinion the Company is not a Nidhi Company; accordingly clause (xii) ofparagraph 3 of the order is not applicable to the Company.
xiii. According to the information and explanations given to us transaction withrelated parties are in compliance with section 177 and 188 of Companies Act 2013 whereverapplicable and the details have been disclosed in the Financial Statement etc. asrequired by the applicable accounting standards.
xiv. According to the information and explanations given to us the company has notissued fully or partially convertible debentures during the year. In our opinion andaccording to the explanations given to us the preferential allotment/private placement ofeight crores thirty three lakh shares are in compliance with the section 42 of theCompanies Act 2013 wherever applicable and the amounts raised against these allotmentare applied for the purposes for which they were raised.
xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly clause (xv) of theparagraph 3 of the Order is not applicable.
xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly clause (xvi) of the paragraph 3 of the Order is notapplicable.
For and on Behalf of
K. K. MANKESHWAR & CO.
Membership No. 049354
Dated : 30th May 2018
"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF M/s SUNIL HITECH ENGINEERS LIMITED
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 of M/s Sunil HitechEngineers Limited as of March 31 2018 in conjunction with our audit of the financialstatements 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 its business including adherencetheorderlyandefficient 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 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 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 procedures selected depend on the auditor's judgement including the assessment ofthe risks of material 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 Internalreporting 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 financial reporting includes those policiesand procedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of 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 of unauthorisedacquisition use or disposition of the Company's assets that could have a material effecton 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 2018 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 and on Behalf of
K. K. MANKESHWAR & CO.
Membership No. 049354
Dated : 30th May 2018