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W S Industries (India) Ltd.

BSE: 504220 Sector: Engineering
NSE: WSI ISIN Code: INE100D01014
BSE 00:00 | 10 Aug 1.39 0.06
(4.51%)
OPEN

1.37

HIGH

1.39

LOW

1.37

NSE 00:00 | 10 Aug 1.30 0.05
(4.00%)
OPEN

1.30

HIGH

1.30

LOW

1.20

OPEN 1.37
PREVIOUS CLOSE 1.33
VOLUME 26321
52-Week high 1.85
52-Week low 0.58
P/E
Mkt Cap.(Rs cr) 4
Buy Price 1.27
Buy Qty 2500.00
Sell Price 1.39
Sell Qty 1000.00
OPEN 1.37
CLOSE 1.33
VOLUME 26321
52-Week high 1.85
52-Week low 0.58
P/E
Mkt Cap.(Rs cr) 4
Buy Price 1.27
Buy Qty 2500.00
Sell Price 1.39
Sell Qty 1000.00

W S Industries (India) Ltd. (WSI) - Auditors Report

Company auditors report

To the Members of W.S. INDUSTRIES (INDIA) LIMITED

Report on the Audit of the Standalone financial

Qualified Opinion

We have audited the accompanying Standalone Ind AS financial statements of W.S. INDUSTRIES (INDIA) LIMITED (`the Company') which comprise the balance sheet as at 31st March 2019 the statement of profit and loss (including other comprehensive income) the statement of cash flows and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as Standalone Ind AS financial statements).

In our opinion and to the best of our information and according to the explanations given to us except for the possible effects of matter given in basis for qualified opinion paragraph the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31 2019 and its loss total comprehensive income its cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

 The company's net worth has been completely eroded. The accumulated losses in the reporting year amounts to Rs.4347.16 millions (Previous year Rs.2105.68 millions) and the turnover during the period ended 31stMarch 2019 is Rs.7.26 millions (previous year Rs.25.28 millions)

In view of the above we are unable to comment on the ability of the company to continue as a going concern as per SA 570.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion section we have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit mattersResponse to Key Audit Matters & Conclusion
The company has outstanding liabilities of Rs.851.83millions to Allium Finance Private Limited IDBI Trusteeship Services Limited and Edelweiss Asset Reconstruction Company Limited.The company is in discussion with Allium Finance Private Limited IDBI Trusteeship services Limited and Edelweiss Asset Reconstruction Company Limited to find a resolution to the outstanding loan liabilities with them and arising from the noncompletion of the settlement agreements signed with them on 12th April 2018
1. Company's share capital has increased from Rs.211.40 millions to Rs.262.61 millions.The Share capital of the company has increased to Rs.262.61millions consequent to allotment of 5120818 equity shares on a preferential basis to the respective trust of Edelweiss asset reconstruction company Limited.
2. Company has incurred a Loss of Rs.559.91 Millions from the sale of compulsorily convertible debentures.The sale/transfer of the compulsorily convertible debenture in its subsidiary was based on the valuation conducted as per prescribed guidelines. Loss arising thereon of Rs.559.91 millions has been included as loss in loss from discontinued operations.
3. Sale of land to subsidiary company (M/s W.S. T&D LTD)As a part of sale consideration amounting Rs.3160.00 millions the company has assigned a loan amounting to Rs. 3124.67 millions due to Abhishaya Infrastructure (P) Ltd and received the balance consideration in cash equivalents after the deduction of TDS amounting to Rs.31.60 millions. The title deed of the property is pending release by the Sub Registrar.
During the year the company has sold an immovable property measuring 16.40 acres of land for consideration partly other than cash and partly by cash equivalents.

Management's Responsibility for the Standalone financial statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 (the Act) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position financial performance changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Indian Accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Report on Other Legal and Regulatory Requirements

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 of the Companies Act 2013 we give in the Annexure A a statement on the matters specified in 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 best of 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 the Company 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 Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

e) The company has part redeemed debentures and made part payment of interest on the debentures. The company has obtained suitable opinion from an expert and based on the same the company is in compliance with the provisions of sec 164 of the Companies Act 2013.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure B.

g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and 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 financial position in its financial statements Refer Note 29 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.;

iii. The Company is not required to transfer any amount to the Investor Education and Protection Fund by the Company.

For M/s. S B S B AND ASSOCIATES
Chartered Accountants
Firm Registration No: 012192S
D. Sharath Kumar
Place : ChennaiPartner
Date : 30th May 2019 Membership No.: 024568

Annexure A to the Independent Auditors' Report of even date on the Standalone financial statements of W.S. INDUSTRIES (INDIA) LIMITED.

Referred to in Paragraph 1 under the heading `Report on Other Legal & Regulatory Requirement' of our report of even date:

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets;

(b) We are unable to form any opinion with regard to any material discrepancies on the physical verification of fixed assets in the absence of any record for the verification of the same as on the end of the financial period.

(c) We are informed that the title deeds of immovable properties are held in the name of the company.

(ii) According to the information and explanations given to us the Management was not able to conduct the physical verification of inventory as at 31st March 2019 and the same cannot be opined upon.

(iii) According to the information and explanations given to us and on the basis of our examination of the books of accounts the company has not granted loans to a body corporate covered in the register maintained under Sec 189 of the Companies Act 2013 and hence clause (iii) (a) to (c) are not applicable to the company.

(iv) The company has complied with the provisions of sections 185 and 186 of the companies Act 2013 in respect of loans investments provided by the company. The company has not provided any guarantee or security to any company covered under Section 185.

(v) According to the information and explanations given to us the Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 of the Companies Act 2013 and the rules framed there under are applicable.

(vi) According to information and explanations given to us the Central Government has not prescribed maintenance of cost records under sub-section (1) of section 148 of the Companies Act 2013.

(vii) (a) According to information and explanations given to us and on the basis of our examination of the books of account and records the Company is regular in depositing undisputed statutory dues including Provident Fund Income-Tax Goods and Service Tax Duties of Customs and any other statutory dues with the appropriate authorities. According to the information and explanations given to us undisputed amounts provided for March 31 2019 and payable for a period of more than six months are given below:

S. NONATURE OF DUESAMOUNT OUTSTANDING FOR MORE THAN SIX MONTHS (IN MILLIONS)
1.TDS8.12
2.PROPERTY TAX11.25
3.GRATUITY TO LIC0.19

(b) According to the information and explanation given to us the following dues of income tax have not been deposited by the company on account of dispute are given below:

Name of the StatuteNature of duesAmount (In Million)Forum where the dispute is pendingPeriod to which the dues belong (Assessment Year)
INCOME TAX ACT 1961Income Tax0.40High Court1996-97 and 1997-98

(viii) In our opinion and according to the information and explanations given to us the company has defaulted in repayment of dues to banks and financial institutions as below:

Name of the Bank / Financial InstitutionAmount outstanding as at 31stMARCH 2019 (In Million)
EARC - Assigned by PNB347.08
EARC - Assigned by IOB144.93
EARC Assigned by Exim Bank117.64
Allium Finance Limited30.00
EARC Assigned by Exim Bank Security Receipts59.48
Non Convertible Debentues20.00
TOTAL719.13

(ix) According to the information and explanations given to us the company has not raised moneys by way of initial public offer or further public offer including debt instruments and term Loans. Accordingly clause (ix) of the Order is not applicable to the Company.

(x) In our opinion and according to the information and explanations given to us the company has not noticed any fraud by the company or any fraud on the company by its Officers or employees or reported during the year.

(xi) According to the information and explanations given to us the Company has not provided for managerial remuneration during the year.

(xii) The Company is not a Nidhi Company. Therefore Clause (xii) of the Order are not applicable to the Company.

(xiii) In our opinion all transactions with the related parties are in compliance with section 177 and 188 of Companies Act 2013 and the details have been disclosed in the Standalone Financial Statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us the company has made a preferential allotment of shares during the year under review and the details are given below:

No. of sharesFace valueTotal amount (in Rs.)
51208181051208180

(xv) According to the information and explanations given to us the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly clause (xv) of the Order are not applicable to the Company.

(xvi) The company is not required to be registered under section 45 IA of the Reserve Bank of India Act 1934.

Chartered Accountants
Firm Registration No: 012192S
D. Sharath Kumar
Place : ChennaiPartner
Date : 30th May 2019 Membership No.: 024568

Annexure B to the Independent Auditor's Report of even date on the Standalone financial statements of W.S. INDUSTRIES (INDIA) LIMITED

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 (the Act)

We have audited the internal financial controls over financial reporting of W.S. INDUSTRIES (INDIA) LIMITED (the Company) as of March 31 2019 in conjunction with our audit of the Standalone 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 internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to company's policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidance Note) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013 to the extent applicable to an audit of internal financial controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement including the assessment of the risks of material misstatement of the Standalone financial statements whether due to fraud or error.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition use or disposition of the company's assets that could have a material effect on the Standalone financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting including the possibility of collusion or improper management override of controls material misstatements due to error or fraud may occur and not be detected. Also projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

The system of internal financial controls over financial reporting with regard to the company were made available to us to determine whether the company has established adequate internal financial control over financial reporting and whether such internal financial controls were operating effectively as at 31st March 2019. However in addition to above internal financial controls over financial reporting is based on management's assurance.

We give a disclaimer as reported above in respect of the internal financial controls over financial reporting considering the nature timing and extent of audit tests in our audit of the Standalone financial statements of the Company and hence our opinion is subject to the said disclaimer on the Standalone financial statements of the company.

For M/s. S B S B AND ASSOCIATES
Chartered Accountants
Firm Registration No: 012192S
D. Sharath Kumar
Place : ChennaiPartner
Date : 30th May 2019 Membership No.: 024568