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The Anup Engineering Ltd.

BSE: 542460 Sector: Engineering
NSE: ANUP ISIN Code: INE294Z01018
BSE 00:00 | 20 Feb 570.30 0.25
(0.04%)
OPEN

583.95

HIGH

583.95

LOW

567.25

NSE 00:00 | 20 Feb 570.75 -0.70
(-0.12%)
OPEN

578.00

HIGH

584.00

LOW

566.30

OPEN 583.95
PREVIOUS CLOSE 570.05
VOLUME 514
52-Week high 679.90
52-Week low 351.40
P/E 12.71
Mkt Cap.(Rs cr) 582
Buy Price 564.00
Buy Qty 1.00
Sell Price 578.00
Sell Qty 63.00
OPEN 583.95
CLOSE 570.05
VOLUME 514
52-Week high 679.90
52-Week low 351.40
P/E 12.71
Mkt Cap.(Rs cr) 582
Buy Price 564.00
Buy Qty 1.00
Sell Price 578.00
Sell Qty 63.00

The Anup Engineering Ltd. (ANUP) - Auditors Report

Company auditors report

TO THE MEMBERS OF THE ANUP ENGINEERING LIMITED (Formerly Known as Anveshan HeavyEngineering Limited)

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of The Anup Engineering Limited("the Company") (Formerly known as Anveshan Heavy Engineering Limited) whichcomprise the Balance Sheet as at March 31 2019 the Statement of Profit and Loss(including Other Comprehensive Income) the Statement of Changes in Equity and theStatement of Cash Flows for the year ended on that date and a summary of the significantaccounting policies and other explanatory information (hereinafter referred to as"the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 the profit and total comprehensiveincome changes in equity and its cash flows 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 Responsibilities for the Audit ofthe Financial 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 independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.

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.

Sr. No. Key Audit Matter Auditor's Response
1 Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) Principal Audit Procedures We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognised over a period estimate of variable consideration reduction of revenue on the basis of consideration payable to customers in the form of loyalty points determination of Principal versus agent consideration recognition of contract assets and refund liability. Additionally new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. • Evaluated the design of internal controls relating to implementation of the new revenue accounting standard.
• Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation reperformance and inspection of evidence in respect of operation of these controls.
• Selected a sample of continuing and new contracts and performed the following procedures:
- Read analysed and identified the distinct performance obligations in these contracts.
- Compared these performance obligations with that identified and recorded by the Company.
Refer Note 16 to the Financial Statements - Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration.
- Considered the terms of contracts for determination of Principal versus agent consideration recognition of contract assets and refund liability including historical trend of returns.
- Sample of revenues disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts.
- Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings.
- We reviewed the collation of information to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date.
2 Business Combination During the year Engineering Division of Arvind Limited was merged with the Company. And The Anup Engineering Limited was amalgamated into the Company. After the merger the Company has issued shares to the shareholders of Arvind Limited and to the shareholders of The Anup Engineering Limited and got listed on stock exchange. This requires significant management judgement. Our key audit matter focuses on the valuation of assets acquired (including intangibles) and the completeness of liabilities. Principal Audit Procedures We performed the following procedures in response to the key audit matter identified:
• Completed a walkthrough of the merger process and obtained understanding of the transaction by reading the Scheme of Arrangement and the Listing Profile document;
• Assessed the design and implementation of the key controls addressing the risk;
• Evaluated management's assessment of the due diligence findings and the actions taken;
Refer Note 40 to the Financial Statements • Risk assessed appropriately scoped and tested the balances for the acquired business;
• Reviewed the key underlying assumptions;
• Reviewed the disclosures in the financial statements.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon. Our opinion on thefinancial statements does not cover the other information and we do not express any formof assurance conclusion thereon. In connection with our audit of the financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated. 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 total comprehensiveincome changes in equity and cash flows of the Company in accordance with the Ind AS andother accounting principles generally accepted in India. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments 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. In preparing thefinancial statements management is responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso. The Board of Directors are responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities 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 weexercise professional judgment and maintain 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 procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• 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 concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying 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 influenced. 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 chargedwith governance regarding among other matters the planned scope and timing of the auditand significant audit findings including any significant deficiencies in internal controlthat we identify during our audit. We also provide those charged with governance with astatement that we have complied with relevant ethical requirements regarding independenceand to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence and where applicable related safeguards. From thematters communicated with those charged with governance we determine those matters thatwere of most significance in the audit of the financial statements of the current periodand are therefore the key audit matters. We describe these matters in our auditor's reportunless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh 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) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The Balance Sheet the Statement of Profitand Loss including Other Comprehensive Income Statement of Changes in Equity and theStatement of Cash Flow dealt with by this Report are in agreement with the relevant booksof account. d) In our opinion the aforesaid financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. e) On the basis of the written representations received from the directors ason March 31 2019 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2019 from being appointed as a director in terms of Section164 (2) of the Act. f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure A. Our report expresses an unmodified 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'sReport in accordance with the requirements of section 197(16) of the Act as amended: Inour opinion and to the best of our information and according to the explanations given tous the remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act. h) With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 as amended in our opinion and to the best of our information andaccording to the explanations given to us: i. The Company has disclosed the impact ofpending litigations in its financial statements – Refer Note 26 to the financialstatements; ii. The Company did not have any long-term contract including derivativecontracts for which there were any material foreseeable losses; iii. There have been noamounts required to be transferred to the Investor Education and Protection Fund by theCompany.

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 inAnnexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

For Sorab S. Engineer & Co.
Chartered Accountants
Firm's Registration No. 110417W
CA. Chokshi Shreyas B.
Place : Ahmedabad Partner
Date : 20th May 2019 Membership No.100892

Annexure A To The Independent Auditor's Report

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of The Anup Engineering Limited(Formerly known as Anveshan Heavy Engineering Limited ) 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 The AnupEngineering Limited ("the Company") (Formerly known as Anveshan HeavyEngineering Limited) as of March 31 2019 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 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. 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 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 internal financial controls system overfinancial reporting of the Company.

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.

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 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 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Sorab S. Engineer & Co.
Chartered Accountants
Firm's Registration No. 110417W
CA. Chokshi Shreyas B.
Place : Ahmedabad Partner
Date : 20th May 2019 Membership No.100892

i. In respect of the Company's fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. (b) The Company has a program ofverification to cover all the items of fixed assets in a phased manner which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the program certain fixed assets were physically verified by themanagement during the year. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification. (c) According to the informationand explanations given to us the records examined by us and based on the examination ofthe conveyance deeds / registered sale deed provided to us we report that the titledeeds comprising all the immovable properties of buildings which are freehold are heldin the name of the Company as at the balance sheet date. ii. As explained to us physicalverification of inventory has been conducted at reasonable intervals by the management andthe discrepancies noticed on verification between the physical stocks and the book recordswere not material having regard to the size of the Company and the same have beenproperly dealt with in the books of account. iii. According the information andexplanations given to us the Company has not granted secured / unsecured loans toCompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Consequently requirements of clause (iii) ofparagraph 3 of the order are not applicable. iv. In our opinion and according to theinformation and explanations given to us the Company has not advanced any loan or givenany guarantee or provided any security or made any investment covered under section 185 ofthe Act. However the Company has advanced loans or given guarantees or provided securityor made investments covered under section 186 of the Act. We are of the opinion thatprovisions of section 186 of the Act have been complied with. v. In our opinion andaccording to the information and explanations given to us the Company has not acceptedany deposits from the public within the meaning of Sections 73 to 76 or any other relevantprovisions of the Act and rules framed thereunder. No order has been passed by the CompanyLaw Board or National Company Law Tribunal or Reserve Bank of India or any Court or anyother Tribunal. vi. To the best of our knowledge and belief the Central Government hasnot prescribed maintenance of cost records under section 148 (1) of the Act in respect ofthe Company's product. Consequently requirement of clause (vi) of paragraph 3 of theorder are not applicable. vii. According to the information and explanations given to usin respect of statutory dues: (a) The Company is generally regular in depositing withappropriate authorities undisputed statutory dues including Provident Fund Employees'State Insurance Income Tax Wealth Tax Sales Tax

Service Tax Duty of Custom Goods and Service Tax Cess and other material statutorydues applicable to it. According to the information and explanations given to us noundisputed amounts payable in respect of outstanding statutory dues were in arrears as atMarch 31 2019 for a period of more than six months from the date they became payable. (b)According to the information and explanations given to us no disputed amounts are payableas at March 31 2019. viii. In our opinion and according to the information andexplanations given to us the Company has not defaulted in repayment of dues to financialinstitutions and banks. ix. To the best of our knowledge and belief and according to theinformation and explanations given to us the Company has not raised moneys by way ofinitial public offer or further public offer. x. To the best of our knowledge and beliefand according to the information and explanations given to us no fraud by the Company oron the Company by its officers or employees has been noticed or reported during the year.xi. In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act. xii.The Company is not a Nidhi Company. Consequently requirements of clause (xii) ofparagraph 3 of the order are not applicable. xiii. To the best of our knowledge and beliefand according to the information and explanations given to us all transactions with therelated parties are in compliance with sections 177 and 188 of the Act where applicableand the details have been disclosed in the financial statements etc. as required by theapplicable accounting standards. xiv. To the best of our knowledge and belief andaccording to the information and explanations given to us the Company has not made anypreferential allotment or private placement of shares during the year under review.Consequently requirements of clause (xiv) of paragraph 3 of the order are not applicable.xv. To the best of our knowledge and belief and according to the information andexplanations given to us the Company has not entered into any non-cash transactions withdirectors or persons connected with him. xvi. According to the nature of the business theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For Sorab S. Engineer & Co.
Chartered Accountants
Firm's Registration No. 110417W
CA. Chokshi Shreyas B.
Place : Ahmedabad Partner
Date : 20th May 2019 Membership No.100892