Videocon Industries Ltd.
|BSE: 511389||Sector: Consumer|
|NSE: VIDEOIND||ISIN Code: INE703A01011|
|BSE 00:00 | 15 Jun||Videocon Industries Ltd|
|NSE 05:30 | 01 Jan||Videocon Industries Ltd|
|BSE: 511389||Sector: Consumer|
|NSE: VIDEOIND||ISIN Code: INE703A01011|
|BSE 00:00 | 15 Jun||Videocon Industries Ltd|
|NSE 05:30 | 01 Jan||Videocon Industries Ltd|
The Members of
VIDEOCON INDUSTRIES LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of VIDEOCON INDUSTRIESLIMITED ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss and the Cash Flow Statement for the 15months period ended on that date and a summary of significant accounting policies andother explanatory information.
Management's Responsibility for the Standalone 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 ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; 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 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 there under.
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 financial statements are free from material misstatements.
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 financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone financial statements.
Basis for Qualified Opinion
>As mentioned in Note No. 41 to the Standalone financial statements the Companyhas up to 31s March 2017 directly and through its subsidiaries madeinvestments of' 75002.03 Million in Videocon Telecommunications Limited (VTL) thesubsidiary. VTL has huge accumulated losses as at 31st March 2017. The abilityof VTL to continue as a going concern is substantially dependent on its ability to fundits operating and capital expenditure requirements. VTL has entered into agreement dated16th March 2016 with Bharti Airtel Limited for trading the right to use 2 x 5 MHzSpectrum in the 1800 MHz band allotted to it in 6 circles at an aggregate considerationof' 46530.00 Million and the said transaction has been concluded on 24th May 2016. VTLis confident of continuing its commercial operations in the National Long Distance (NLD)and International Long Distance (ILD) Business.
However in view of the huge accumulated losses of the VTL we are unable to express anopinion on the extent of realisability of aforesaid investments in VTL. The consequentialeffect of the above on the assets and liabilities as at 31st March 2017 andthe loss for the period ended on that date is not ascertainable.
Our report for preceding financial year was also qualified in respect of this matter.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basis forQualified Opinion paragraph the aforesaid standalone financial statements read with theNotes thereon give the information required by the Act in the manner so required and givea true and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at 31st March 2017 and itsloss and its cash flows for the period ended on that date.
Emphasis of Matter
The standalone financial statements reflect the share of the Company in the assets andthe liabilities as well as the income and expenditure of joint venture operations on aline by line basis. The Company incorporates its share in the operations of the jointventure
based on statement of account received from the Operator. The Company has participatinginterest of 25% in Ravva Oil and Gas Field Joint Venture through a Production SharingContract (PSC). The Company has received the audited financial statements for the periodupto 31st March 2016 and un-audited financial statements for the period 1stApril 2016 to 31st March 2017 in respect of the said joint venture from theOperator which has been certified by the management on which we have placed reliance.
Our opinion is not qualified in respect of this matter.
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 Section 143(11) of the Act we givein the "Annexure A" a statement on the matters specified in paragraphs 3 and 4of 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 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 Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
d) In our opinion except for the effects of the matter described in the Basis forQualified Opinion paragraph above the aforesaid standalone financial statements complywith the Accounting Standards specified under Section 133 of the Act.
e) The matter relating to the extent of realisability of investments in a subsidiarydescribed in Basis for Qualified Opinion paragraph above in our opinion may have anadverse effect on the functioning of the Company.
f) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in termsof Section 164(2) of the Act.
g) 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
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 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 financial statements - Refer Note No. 35 to 40 to the financialstatements.
ii) The Company did not have any long term contracts including derivatives contractsfor which there were any material foreseeable losses.
iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv) The Company has provided requisite disclosures in the financial statements as toits holdings and dealings in Specified Bank Notes as defined in the Notification S.O.3407(E) dated the 8th November 2016 of the Ministry of Finance during theperiod from 8th November 2016 to 30th December 2016. Based onaudit procedures and relying on the management representation provided to us we reportthat the disclosures are in accordance with the books of account maintained by the Companyand as produced to us by the Management - Refer Note No. 49.
ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' of our report of even date)
(i) In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As per the information and explanations given to us physical verification of fixedassets has been carried out in terms of the phased programme of verification adopted bythe Company and no material discrepancies were noticed on such verification. In ouropinion the frequency of verification is reasonable having regard to the size of theCompany and nature of its business.
(c) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) (a) As per the information and explanation given to us the inventories (excludingstock of crude oil lying at extraction site with
the Operator) have been physically verified during the period by the management atreasonable intervals. In our opinion having regard to the nature and location of stocksthe frequency of the physical verification is reasonable.
(b) As per information and explanation given to us no material discrepancies werenoticed.
(iii) The Company has granted unsecured loans that are repayable on demand to 11companies covered in the register maintained under section 189 of the Companies Act 2013.The Company has not granted any secured/unsecured loans to firms or other parties coveredin the register maintained under section 189 of the Companies Act 2013.
(a) The terms and conditions of the aforesaid loans are not prejudicial to theCompany's interest.
(b) In respect of the aforesaid loans we are informed that the parties are repayingthe loans and interest wherever demanded and thus there has been no default on the partof these companies to whom the money has been lent.
(c) In respect of the aforesaid loans there is no overdue amount more than rupee onelakh.
(iv) In our opinion and according to the information and explanation given to us theCompany has complied with the provisions of Section 185 and 186 of the Act in respect ofloans investments guarantees and security.
(v) According to the information and explanations given to us the Company has notaccepted any deposit during the period. Therefore the provisions of clause (v) of theOrder is not applicable.
(vi) According to the information and explanations given to us in our opinion theCompany has prima facie made and maintained the prescribed cost records pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended and prescribed by the CentralGovernment under section 148(1) of the Companies Act 2013. We have however not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.
(vii) (a) According to the information and explanations given to us and the recordsexamined by us the Company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income tax sales tax service tax duty ofcustoms duty of excise value added tax cess and other statutory dues with appropriateauthorities wherever applicable. According to the information and explanations given tous undisputed arrears of statutory dues which were outstanding as on 31st March 2017 fora period of more than six months from the date they became payable and not paid till dateare given below:
(b) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company details of dues of income tax sales taxservice tax custom duty excise duty value added tax cess which have not been depositedas on 31st March 2017 on account of disputes are given below:
(viii) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company we observed that the Company has defaulted inrepayment of loans to financial institutions and banks as summarised below:
The Company has not borrowed from government and has not issued any debentures.
(ix) According to the information and explanations given to us the term loans raisedduring the period were applied on an overall basis for the purpose for which the loanswere obtained.
The Company has not raised the money during the period by way of initial public offeror further public offer (including debt instruments).
(x) According to the information and explanations given to us no material fraud by theCompany or any fraud on the Company by its officers or employees has been noticed orreported during the period.
(xi) The Company has not paid or provided the managerial remuneration to any of itsDirector.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.
(xiii) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company we observed that transactions with the relatedparties are in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable and the details have been disclosed in the financial statements etc. asrequired by the applicable accounting standards.
(xiv) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company we observed that the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the period.
(xv) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company we observed that the Company has not enteredinto any non-cash transactions with its directors or persons connected with him and henceprovisions of section 192 of the Companies Act 2013 are not applicable.
(xvi) In our opinion the Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934. Therefore the Clause (xvi) of paragraph 3 of theOrder is not applicable to the Company.
ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 2 (g) under Report on Other Legal and RegulatoryRequirements' 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 VIDEOCONINDUSTRIES LIMITED ("the Company") as of 31st March 2017 inconjunction with our audit of the standalone financial statements of the Company for theperiod 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 (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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 31st 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.