TO THE MEMBERS VISHAL BEARINGS LIMITED
REPORT ON AUDITED FINANCIAL STATEMENTS
We have audited the accompanying financial statements of VISHAL BEARINGS LTD.(the Company") which comprise the Balance Sheet as at March 31 2017 and theStatement of Profit and Loss and the Cash Flow Statement for the year ended on that dateand a summary of significant accounting policies and other explanatory information.
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 ofthese financial statements that give a true and fair view of the financial position andfinancial performance of the Company including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement. An audit involvesperforming procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor's judgment includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing an opinion on whether the Company hasan adequate internal financial controls system over financial reporting in place and theoperating effectiveness of such controls. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Board of Directors as well as evaluating the overallpresentation of the financial statements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements read together with the notes thereon 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 to the extentapplicable; A) In the case of the Balance Sheet of the state of affairs of the Company asat 31st March 2017; B) In the case of the Statement of Profit and Loss of the profit ofthe Company for the year ended on that date; and C) In the case of the Cash FlowStatement of the cash flows of the Company for the year ended on that date.
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 Act we give in the Annexure A a statement on the matters specified in paragraphs 3and 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 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 and Statement of Profit and Loss dealt with by this report are inagreement with the books of account as submitted to us;
D) in our opinion the aforesaid financial statements comply with the accountingstandards specified under Section 133 of the Companies Act read with Rule 7 of theCompanies (Accounts) Rules 2014 to the extent applicable;
E) On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31st March 2017 from being appointed as a director in terms of Section 164(2) ofthe 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 Rule 11 of the Companies (Audit and Auditor's) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i) There were no pending litigations which would impact the financial position of theCompany.
ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any and as required on long-term contractsincluding derivative contracts.
iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv) The Company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from November 082016 to December 30 2016 and these are in accordance with the books of accountsmaintained by the Company. Refer Note 38 to the financial statements
ANNEXURE A TO THE AUDITOR'S REPORT
(Referred to in paragraph 1 of our Report of even date on the Statement of Accounts ofVISHAL BEARINGS LIMITED for the year ended on 31st March 2017)
1. FIXED ASSETS:
a) In our opinion the company has generally maintained proper records showing fullparticulars including quantitative details and situation of fixed assets on the basis ofavailable information.
b) As explained to us the fixed assets have been physically verified by the managementduring the year in a phased periodical manner which in our opinion is reasonable havingregard to size of the company and nature of its assets. No material discrepancies withrespect to book records were noticed on such verification.
c) As explained to us and on the basis of our examination of the books of accounts thedeeds of immovable properties are held in the name of the company.
a) According to the information and explanation given to us the inventories have beenphysically verified during the year by the management and in our opinion the frequency ofverification is reasonable.
b) As explained to us no material discrepancies were noticed on physical verificationof inventories as compared to the book records.
According to the information and explanations given to us and on the basis of ourexamination of the books of account the company has not granted any loans secured orunsecured to companies firms Limited Liability Partnerships or other parties covered inthe register maintained under Section 189 of the Companies Act 2013 during the yearunder review. Consequently the provisions of clause (iii) of the order are not applicableto the company.
4. LOANS INVESTMENTS & GUARANTEES:
According to the information and explanations given to us and on the basis of ourexamination of the books of account the company has not granted any loans directly orindirectly to any directors or person or entities in which directors are interested and/orhas not given any guarantee or provided any security in connection with loan taken bythem; According to the information and explanations given to us and on the basis of ourexamination of the books of account the company has complied with the provisions ofsection 186 in respect of investments if any made in securities of other body corporate.
As explained to us the company has not accepted any loans or deposits within meaningof Section 73 to 76 of the Companies Act 2013 read with Rule 2(b) of the Companies(Acceptance of Deposit's) Rules 2014 during the year under review.
6. COST RECORDS:
According to the information and explanations provided by the management to us and tothe best of our knowledge the Company is not engaged in production of any such goods orproduction of any such services for which the Central Government has prescribedparticulars relating to utilization of material or labour or other items of cost. Hencethe provisions of section 148(1) of the Act do not apply to the Company.
7. STATUTORY DUES:
a) As per information and explanation available to us undisputed statutory duesincluding provident fund investor education and protection fund employee's stateinsurance income-tax sales-tax wealth tax service tax custom duty excise duty valueadded tax cess and other statutory dues have been generally regularly deposited with theappropriate authorities applicable to it though there had been some delays in certaincases. Further according to information explanation given to us No undisputed statutorydues applicable to the company were outstanding as at 31st March 2017 for a period ofmore than 6 months from the date they become payable.
b) According to the information and explanation available to us there are no duesoutstanding on account sales tax income tax wealth tax service tax custom duty exciseduty cesson account of dispute except as follows:
|Sr. No. ||Name of the Statue ||Nature of dues ||Amount under dispute Rs. In lacs ||Period to which amount relates ||Forum where dispute is pending |
|1. ||The Income Tax Act 1961 ||Income Tax (Plus Applicable Interest) ||1.86 * ||AY 14-15 ||CIT(A)- Rajkot 1 |
* The company has deposited Rs. 0.28 Lacs against the said amount.
8. DUES TO FINANCIAL INSTITUTION BANKS OR DEBENTURE HOLDER:
Based on our audit procedures and as per information and explanation given to us by themanagement of the company we are of the opinion that company has not defaulted inrepayment of dues to financial institutions and banks during the year under review. Thecompany has not issued any debentures.
9. TERM LOANS & PUBLIC ISSUE:
Based on the audit procedures performed and according to the information explanationsgiven to us on an overall basis the existing as well as new term loans have been appliedfor the purpose for which they were obtained. The company has not raised any money througha public issue during the year under review
Based upon the audit procedures performed and as per the information and explanationgiven by the management we report that no fraud by the company or any fraud on thecompany by its officers / employees has been noticed or reported during the course of ouraudit.
11. MANAGERIAL REMUNERATION:
As per the information and explanations given to us the company has complied with theprovisions of section 197 of the Companies Act 2013 regarding managerial remuneration tothe extent applicable.
12. NIDHI COMPANY:
In our opinion the company is not a nidhi company. Consequently the provisions ofclause (xii) of the order are not applicable to the company.
13. RELATED PARTY TRANSACTIONS:
Based upon the audit procedures performed and as per the information and explanationgiven by the management all the transactions with the related parties are in compliancewith Section 177 and 188 of the Companies Act 2013 and have been duly disclosed in thefinancial statements as required by the applicable accounting standards.
14. PREFERENTIAL ALLOMENT / PRIVATE PLACEMENT:
Based on the audit procedures performed and according to the information andexplanations given to us the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Consequently the provisions of clause (xiv) of the order are not applicable tothe company.
15. NON-CASH TRANSACTIONS:
Based on the audit procedures performed 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. Consequently the provisions of clause (xv) ofthe order are not applicable to the company.
16. REGISTRATION UNDER SECTION 45-IA OF RBI ACT 1934:
Since the company is not an NBFC the provisions of clause (xvi) of the order are notapplicable to the company.
ANNEXURE B TO THE AUDITOR'S REPORT
(Referred to in paragraph 2(f) of our Report of even date on the Statement of Accountsof VISHAL BEARINGS LIMITED for the year ended on 31st March 2017)
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 VISHALBEARINGS LIMITED ("the Company") as of 31 March 2017 in conjunction with ouraudit of the 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 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 the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.
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 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 SVK & ASSOCIATES |
| ||Chartered Accountants |
| ||Firm No. 118564W |
| ||Shilpang V. Karia |
|Place: Rajkot ||Partner |
|Date: May 30 2017 ||M. No. 102114 |