Mobile Nav

Market

AUDITOR'S REPORT

Electrotherm (India) Ltd.

You can view full text of the latest Auditor's Report for the company.
Market Cap. (₹) 181.39 Cr. P/BV -0.15 Book Value (₹) -958.95
52 Week High/Low (₹) 380/114 FV/ML 10/1 P/E(X) 1.28
Bookclosure 30/09/2015 EPS (₹) 111.32 Div Yield (%) 0.00
Year End :2018-03 

Report on the Standalone Financial Statements

We have audited the accompanying Standalone Financial Statements of ELECTROTHERM (INDIA) LTD (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including the Statement of Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “Standalone Financial Statements”).

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 State of Affairs (Financial Position), Profit or Loss (Financial Performance including Other Comprehensive Income), Cash Flows and Statement of Changes in Equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015 as amended. 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 Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Financial Statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Standalone Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls.

An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Standalone Financial Statements.

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

Basis for Qualified Opinion

1. We draw attention to Note No. 34(e) of non- provision of interest on NPA accounts of banks of’ 192.70 Crores (Previous Year ‘ 219.63 Crore), for the year under consideration and the total amount of such unprovided interest till date is ‘ 752.04 Crore (Previous Year ‘ 801.76 Crore).The exact amounts of the said non provisions of interest are not determined and accounted for by the Company and to that extent Bankers loan liabilities are understated and profit is overstated.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us read with the notes to accounts, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid Standalone 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, including Ind AS specified under Section 133 of the Act, of the State of Affairs (Financial Position) of the Company as at 31 March 2018, and it’s the Statement of Profit and Loss (Financial Performance including Other Comprehensive Income), its Cash Flows and the Changes in Equity for the year ended on that date.

Matter of Emphasis

1. We draw attention to Note No. 33 of the accompanying Standalone Financial Statements in respect of Winding up petitions and recovery cases against the Company.

2. We draw attention to Note No. 34 of the accompanying Standalone Financial Statements, in respect of non- provision of long disputed advances/claims/liability against the Company, on account of the reasons for recovery/realization/settlement as stated in said notes.

3. We draw attention to Note No. 35(h) of the accompanying Standalone Financial Statements in respect of treatment in the books of accounts of the assignment / settlement of Debts of various Banks and the financial institutions.

4. We draw attention to Note No. 35(l) of the accompanying Standalone Financial Statements, in respect of a Charge sheet filed by the Central Bureau of Investigation (CBI) against the Company and its few Directors.

5. We draw attention to Note No. 39(b) of the accompanying Standalone Financial Statements in respect of third party balance confirmations, its classification in respect of nature of realization of the amount and provision thereof.

Other Matter

The Comparative financial information of the Company for the year ended 31st March 2017 included in the statement, is based on the previously issued statutory Financial Statements for the year ended 31st March 2017 were audited by the predecessor auditor vide their audit report dated 23rd May 2017. The Adjustment to those Financial Statements for the difference in accounting principles adopted by the Company on transition to IND AS have been audited by us.

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 subsection (11) of section 143 of the Act, we give in the Annexure A statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable for the year under consideration.

2. As required by Section 143 (3) of the Act, we broadly 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 including Other Comprehensive Income, the Cash Flow Statement 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 Ind AS specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015

(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Financial Statements 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 (as amended), 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 Standalone Financial Statements-Refer Note No. 30,34 and 35(k) to the Standalone Financial Statements;

(ii) There are no long term contracts including derivative contracts and accordingly no provision is required to be made for any loss from the same;

(iii) There is no fund which is pending to be transferred to the Investor Education and Protection Fund by the Company.

(iv) The disclosure requirements relating to holdings as well as dealings in the specified bank notes were applicable for the period from 8th November 2016 to 30th December 2016 which are not relevant to these Standalone Financial Statements. Hence, reporting under clause is not applicable.

The Annexure A referred to in Independent Auditor’s Report to the members of Electrotherm (India) Limited on the Standalone Financial Statements for the year ended on March 31, 2018, we report that:

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

the Company is in the process of updating the fixed assets register in certain respect.

(b) As informed to us, the Company has a programme of physical verification of its fixed assets by which the fixed assets are verified by the Management at periodic manner. In accordance with this programme fixed assets of Engineering Division were verified during the year and as informed to us, no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanation given to us the title deeds of immovable properties (which are included under the note 3- ‘Property, plant and equipment’), are held in the name of the Company.

ii. The physical verification of inventory has been conducted at reasonable intervals by the Management during the year, except for goods-in-transit. As informed to us, the discrepancies noticed on physical verification of inventory as compared to book records were not material and have been appropriately dealt with in the books of accounts.

iii. The Company has granted loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’)

(a) In respect of the aforesaid loans, the terms and conditions on which such loans were granted are not prejudicial to the Company’s Interest.

(b) In respect of the aforesaid loans, the schedule of repayment of principal and Interest has not been stipulated. However, the repayments or receipts are regular.

(c) In respect of the aforesaid loans, there is no amount overdue for more than ninety days.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it.

v. In our opinion, and according to the information and explanations given to us, during the year under consideration, the Company has not accepted any deposits within the meaning of sections 73 to 76 of the Act and Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable to the Company.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Goods and Service Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues, as applicable, with the appropriate authorities.

There are no undisputed amounts payable in respect of above dues which were in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, following are the details of outstanding dues in respect of Income Tax, Goods and Service Tax, Sales Tax, service tax, duty of customs, duty of excise, value added tax or cess etc which have not been deposited/adjusted/reversed on account of any dispute:-

Name Of The Statue

Nature Of Dues

Amount (In Crore Rupees)

Period To Which The Amount Relates

Forum Where Dispute Is Pending

Central Excise Act,1944

Excise Duty

0.004

2005-06

Commissioner, Central Excise, Gandhidham

Excise Duty

11.65

Dec-05 To Dec-08

CESTAT, Ahmedabad

Excise Duty

175.00

Apr-05 To Mar-10

CESTAT, Ahmedabad

Exciseduty (Advance License)

22.41

Mar-11 To Dec-11

Commissioner, Central Excise, Gandhidham

Excise Duty

68.62

Oct-07 To Sep-12

Commissioner, Central Excise, Gandhidham

Excise Duty

0.12

Apr-08 To July-11

CESTAT, Ahmedabad

Excise Duty

0.69

12.04.2006 To 31.12.2006

CESTAT, Ahmedabad

Excise Duty

2.40

2008-09

CESTAT, Ahmedabad

Excise Duty

57.38

Apr-09 To Mar-10

Commissioner, Central Excise, Gandhidham

Sub Total

338.27

Finance Act,1994

Service Tax

1.84

Apr-07 To Mar-08

Commissioner, Central Excise, Gandhidham

Service Tax

0.16

May-07 To Aug-07

CESTAT, Ahmedabad

Service Tax

0.20

Apr-09 To Aug-10

CESTAT, Ahmedabad

Sub Total

2.20

Customs Act,1962

CVD

7.27

Mar-11 To Dec-11

CESTAT, Ahmedabad

Interest

6.40

May-07 To Feb-08

CESTAT, Ahmedabad

Interest

4.74

Jan-08 To May-08

Additional Commissioner, Mundra

Custom Duty

0.83

Mar-12 To Jan-13

CESTAT, Ahmedabad

Custom Duty

0.02

Apr-11

Commissioner Of Customs (Preventive), Jamnagar

Sub Total

19.26

Gujarat VAT Act 2005

VAT

10.35

Fy 2010-11

Joint Commissioner,Rajkot

VAT

6.13

Fy 2013-14

Joint Commissioner,Rajkot

Central Sales Tax Act, 1956

CST

9.65

Fy 2010-11

Joint Commissioner,Rajkot

Sub Total

26.13

Grand Total

385.86

viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has defaulted in repayment of loans or borrowings to financial institution and bank as at the balance sheet date. Details of which are as below:-

Name of Lender

Amount of Default as on 31/03/2018* (Rs. in Crores)

Default From

Principal

Interest

Total

Corporation Bank

116.73

Nil

116.73

April 2012

Central Bank of India

428.94

7.19

436.13

March 2012

Indian Overseas Bank

200.00

0.01

200.01

August 2011

Syndicate Bank

24.45

9.50

33.95

October 2011

Standard Chartered Bank

8.41

Nil

8.41

December 2011

International Finance Corporation

143.75

14.01

157.76

June 2011

* The above table does not include the interest which bank has not provided after the account has been Classified Non Performing Assets and the amount which has been assigned/settled by the lenders.

ix. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. According to the information and explanation given by the Company, the managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the Provisions of section 197 read with Schedule V of the Companies Act 2013.

xii. In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is not applicable to the Company.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Financial Statements as required by the applicable Ind AS-24, Related Party Disclosures.

xiv. According to the information and explanation given to us and on overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence reporting requirements under clause 3(xiv) are not applicable to the Company and not commented upon.

xv. According to the information and explanation given to us, the Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly paragraph 3(xv) of the Order is not applicable to the Company.

xvi. According to the information and explanations provided to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the paragraph 3(xvi) of the Order is not applicable to the Company.

[ANNEXURE B REFERRED TO IN PARAGRAPH 2 OF REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENT OF OUR REPORT OF EVEN DATE FOR THE YEAR ENDED ON MARCH 31s, 2018]

Report on the Internal Financial Controls 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 ELECTROTHERM (INDIA) LIMITED (“the Company”) as of March 31, 2018 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”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both 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 judgment, including the assessment of the risks of material misstatement of the Financial Statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

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 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 Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’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 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

In our opinion, the Company has, in all material respects, except otherwise stated or reported to the company, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, 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.

For, Hitesh Prakash Shah & Co

(Firm Regd.no: 127614W)

Chartered Accountants

Hitesh P Shah

Place : Ahmedabad Proprietor

Date : 25th May, 2018 Membership No. 124095

Attention Investors :
Prevent Unauthorised transactions in your account --> Update your mobile numbers/email IDs with your stock brokers. Receive information of your transactions directly from Exchange on your mobile / email at the end of the day .......... Issued in the interest of investors
Attention Investors :
Prevent Unauthorized Transactions in your demat account --> Update your Mobile Number with your Depository Participant. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat account directly from NSDL on the same day......................issued in the interest of investors.
Attention Investors :
KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
Attention Investors :
No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account.
“Investment in securities market are subject to market risks, read all the related documents carefully before investing”.