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WEP Solutions Ltd.

BSE: 532373 Sector: Consumer
NSE: N.A. ISIN Code: INE434B01029
BSE 00:00 | 10 Aug 19.80 2.35
(13.47%)
OPEN

18.30

HIGH

20.00

LOW

18.00

NSE 05:30 | 01 Jan WEP Solutions Ltd
OPEN 18.30
PREVIOUS CLOSE 17.45
VOLUME 20900
52-Week high 33.40
52-Week low 12.00
P/E 990.00
Mkt Cap.(Rs cr) 52
Buy Price 17.80
Buy Qty 30.00
Sell Price 19.65
Sell Qty 75.00
OPEN 18.30
CLOSE 17.45
VOLUME 20900
52-Week high 33.40
52-Week low 12.00
P/E 990.00
Mkt Cap.(Rs cr) 52
Buy Price 17.80
Buy Qty 30.00
Sell Price 19.65
Sell Qty 75.00

WEP Solutions Ltd. (WEPSOLUTIONS) - Auditors Report

Company auditors report

To the Members

WeP Solutions Ltd

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

1. We have audited the standalone Ind AS financial statements of WeP Solutions Ltd("the Company") which comprise the balance sheet as at 31st March2019 the statement of Profit and Loss statement of changes in equity and statement ofcash flows for the year then ended and notes to the financial statements including asummary of significant accounting policies and other explanatory information.

2. 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 inconformity with the accounting principles generally accepted in India of the financialposition of the Company as at March 31 2019 and its financial performance includingother comprehensive income its cash flows and the changes in equity for the year endedon that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial 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 together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that in our professional judgment were of mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in 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
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. 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. Refer notes 1 .A.4 and 23 to the Standalone financial statements. We assessed the Company's process / basis of
- Identification of Contract with the Customer
- Identification of performance obligation
- Determination of transaction price
- Allocation of transaction price
Satisfaction of performance obligation
Selected a sample of 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;
• 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;
• verified performance obligation that gets satisfied at a point in time upon physical delivery of goods to customer with delivery proofs;
• verified performance obligation that gets satisfied over a period of time upon passage of time with actual passage of time;
• tested sample of revenues disaggregated by type with the performance obligations specified in the underlying contracts; and
• performed analytical procedures for reasonableness of revenues disclosed by type.
2 Adequacy of Provision for bad & doubtful debts / Adequacy of allowance for Credit losses against Trade Receivables. As at March 312019 carrying amount of allowance for credit losses is Rs.8.01 crores against total dues of Rs.20.39 crores from Trade receivables. Principal Audit Procedures
We obtained the Company's process / policy / basis of
- identifying and classifying Trade receivables into following categories:
a. trade Receivables considered good;
b. trade Receivables which have significant increase in credit risk; and
c. trade Receivables which are credit impaired; calculating amount of allowance thereon;
Our audit approach consisted of the following procedures:
- assessing reasonableness of basis of identifying and classifying into different categories as mentioned above;
- verifying basis of calculating amount of allowance thereon;
- selecting sample of parties and verifying the identification and classification of parties based on the company's policy into different categories as mentioned above; and
- recalculating the amount of allowance on the selected sample of parties based on Company's policy.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

5. 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 changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating 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.

6. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

7. Those on the Board of Directors are also responsible for overseeing the Company'sfinancial reporting process.

Auditors responsibilities for the Audit of the Financial Statements.

8. 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.

9. As part of an audit in accordance with SAs we exercise professional judgment andmaintain 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company 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 modify our opinion. Ourconclusions 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.

10. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

11. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

12. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

13. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the Annexure A a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

14. 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 the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account.

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

e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof Section 164 (2) of the 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".

g) 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 financial statements - Refer Note 29 to the financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long term contracts includingderivative contracts.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For N.M.Raiji & Co.
Chartered Accountants
Firm's Registration Number: 108296W
S.N. Shivakumar
Place: Camp Bengaluru Partner
Date: May 25 2019 Membership No.: 88113

ANNEXURE-A

To the Independent Auditors' Report of even date on the standalone financial statementsof WeP Solutions Limited

(referred to in paragraph 13 under the heading of "report on other legal andregulatory requirements" of our report of even date)

i . a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Axed assets.

b) In accordance with the phased programme for verification of fixed assets certainitems of fixed assets were physically verified by the management during the year and nomaterial discrepancies were noticed on such verification.

c) In respect of immovable properties of land that have been taken on finance lease anddisclosed as property plant and equipment in the financial statements the leaseagreements are in the name of the company where the Company is the lessee in theagreement as at Balance Sheet date.

ii. Stocks of inventories have been physically verified during the year by themanagement. In our opinion the frequency of such verification is reasonable. Thediscrepancies noticed on verification between the physical stock and the book stock werenot material in relation to the operations of the Company and have been properly dealtwith in the books of account.

iii. In respect of a loan given by the company during the year to its 100% subsidiary:

a) the terms and conditions of the loan are not prejudicial to the Company's interest

b) the schedule of repayment has presently not been stipulated;

c) In the absence of repayment schedule there are presently no overdue amounts.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Companies Act2013 in respect of loans investments guarantees and security.

v. In our opinion the Company has not accepted any deposits within the meaning ofSection 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable tothe Company.

vi. We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the central government for the maintenance of Cost records undersub-section (1) of Section 148 of the Companies Act 2013 and of the opinion that primafacie the prescribed accounts have been made and maintained.

vii. a) According to the information and explanations given to us and on the basis ofour examination of the books of account the

Company has been generally regular in depositing undisputed statutory dues includingProvident Fund Employees State Insurance Income-tax GST Custom Duty cess and anyother dues during the year with the appropriate authorities.

b) According to the information and explanations given to us following are the dues ofIncome-tax GST Sales-tax Excise Duty Service Tax Custom Duty value added tax andcess which have not been deposited on account of disputes with the related authorities.

Sl. No Nature of the statue Nature of the Dues Forum where dispute is pending Financial year to which the matter pertains Amount*
1 Finance Act 1994 Service Tax CESTAT Bengaluru 2010-11 to 2013-14 58129154
2 K VAT Act 2003 Value added Tax The Deputy Commissioner (Appeals) Ernakulam 2012-13 370798
3 K VAT Act 2003 Value added Tax Value added Tax Appellate Tribunal Ernakulam 2013-14 752520
Grand Total 59252472

*(Net of amount paid under protest Rs.6830906)

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to financial institutions or banks. TheCompany does not have any outstanding debentures.

ix. Term loans were applied for the purposes for which those are raised. The Companyhas not raised moneys by way of initial public offer or further public offer.

x. To the best of our knowledge and belief and according to the information andexplanations given to us no material fraud by the Company or on the Company by itsofficers or employees was noticed or reported during the year.

xi The Company has not paid any Managerial remuneration for the year 2018-19consequently the provisions of clause 3 (xi) of the Order are not applicable to theCompany.

xii To the best of our knowledge and belief the Company is not a Nidhi Company.Consequently the provisions of clause 3(xii) of the Order are not applicable to theCompany.

xiii To the best of our knowledge and belief and according to the information andexplanations given to us all transactions with related parties are in compliance withsection 177 and 188 of the Act where applicable and the requisite details have beendisclosed in the financial statements as required by the applicable accounting standards.

xiv) To the best of our knowledge and belief 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.Consequently the provisions of clause 3(xiv) of the Order are not applicable to theCompany.

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. Consequently; the requirement under clause (xv)is not applicable to the Company.

xvi To the best of our knowledge and belief the Company is not required to beregistered under section 45-IA of the Reserve Bank of India Act 1934. Accordingly theprovisions of clause 3(xvi) of the Order are not applicable to the Company.

For N.M.Raiji & Co.
Chartered Accountants
Firm's Registration Number: 108296W
S.N. Shivakumar
Place: Camp Bengaluru Partner
Date: May 25 2019 Membership No.: 88113

Annexure - B

To the Independent Auditor's Report of even date on the Standalone Financial Statementsof WeP Solutions Limited (referred to in paragraph 14 point (f) under the heading of"report on other legal and regulatory requirements" of our report of even date)

1. Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of WePSolutions Limited ("the Company") as at March 312019 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

2. 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 controlstated 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 the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

3. Auditors' Responsibility

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 judgment 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.

4. 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

5. 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.

6. Opinion

In our opinion to the best of our information and according to explanation given tous 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 312019 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 N.M.Raiji & Co.
Chartered Accountants
Firm's Registration Number: 108296W
S.N. Shivakumar
Place: Camp Bengaluru Partner
Date: May 25 2019 Membership No.: 88113