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स्कूटर्स इंडिया

बीएसई: 505141  |  NSE: N.A  |  ISIN: INE959E01011  |  Auto - 2 & 3 Wheelers

खोजें स्कूटर्स इंडिया कनेक्शन Mar 16
लेखा परीक्षकों की रिपोर्ट वर्षांत : Mar '18

Report on the Financial Statements

We have audited the accompanying Ind AS financial statements of Scooters India Limited (‘the Company’), which comprise the Balance Sheet as at 31st March, 2018 and the Statement of Profit and Loss Account (including 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.

Management’s Responsibility for the Ind AS 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 and presentation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) rules, 2015, as amended and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 of the Ind AS financial statements that give a true and fair view and free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these Ind AS 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 Acts and Rules made there under. We conducted our audit in accordance with the Standards on Auditing 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 Ind AS financial statements are free from material misstatement.

An audit involves performing to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation of the fair presentation of the Ind AS financial statements in order to design audit procedures that are appropriate in the circumstances. 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 financial statements.

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

Basis of Qualified Opinion

1. Attention is invited to note 41 of ‘Significant Accounting Policies & Notes to the Financial Statement’ and note 46 of ‘Significant Accounting Policies & Notes to the Financial Statement’ regarding repayment of principal and interest on non plan loan of Rs. 189 lakhs received by the company from the Government of India at an interest rate of 13.50% per annum. The company has not provided interest over it as it has filed an application for freezing of the interest, with the Ministry of Heavy Industry however Ministry approval on the same is pending and has yet not been approved further total interest including the penalty accrued and unpaid is Rs.171.14 lakhs. till 31st March 2018, since the final outcome is still awaited the therefore the impact is unascertained.

2. Attention is invited to note 43 of ‘Significant Accounting Policies & Notes to the Financial Statement’, where the company has increased its Authorised capital from Rs.7500 lakhs to Rs.25000 lakhs, however share issue expense with respect to payment of fees to the Ministry of Corporate Affairs (“MCA”) pursuant to rule 12 of the Companies (Registration of Offices and Fees) Rules, 2014, of Rs.131.25 Lakhs plus interest has not been paid nor provided in the books of accounts. The MCA has so far not allowed the increased Authorized and Paid up capital, without payment of requisite fees to MCA, as the company is claiming the exemption for the fees on account of relief given by BIFR in its order dated 19th June 2013, since the final outcome is still awaited with therefore the impact is unascertainable.

Further, the Annual Returns of last four years i.e. from FY 2013-14 to FY 2016-17 and Financial Statements for FY 2016-17 have not been filed with the MCA which is non compliance of Section 92 & 137 respectively of Companies Act 2013, and if the company fails to file its annual return then the company is liable to pay additional fees and further penalty or prosecution may be initiated.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the matters described in Paragraph 1 and 2 of the Basis of Qualified opinion paragraph, the said Ind AS 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 31 March, 2018, and its profit/loss, total comprehensive income/loss, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the Notes to Significant Accounting Policies & Notes to the financial statements:

(a) Attention is invited to Note No. 35, of ‘Significant Accounting Policies & Notes to the Financial Statement’ the balances in accounts of parties, contractors, Government Department etc including those balances appearing under current assets, Loan and advances and current liabilities are subject to confirmation and reconciliation, the Ind AS financial Statement do not include the impact of adjustment, if any, which may arise out of the confirmation and reconciliation process.

(b) Attention is invited to Note No. 42, of ‘Signicicant Accounting Policies & Notes to the Financial Statement’ where the company has bot provided for the arrears to the employees who were on the payroll of the company as on 01.04.2013, as the approval is awaited from GOI and pending outcome of the proceeding before the Central Government Industrial Tribunal, Lucknow.

(c) Attention is invited to Note No. 20, of ‘Significant Accounting Policies & Notes to the Financial Statement’ regarding other current liabilities which includes provision for Payment of Bonus to employees of Rs.14.18 lakhs for the year 2014-15 and Rs.14.55 lakhs for 2016-17 in line with Payment of Bonus Act, however said bonus is not paid and contravenes the provision of Section 19 of the said Act.

(d) Attention is invited to Note No. 2, of ‘Significant Accounting Policies & Notes to the Financial Statement’ where the company has not recognized any revenue / rent from land usage of Petrol Pump from HPCL in absence of any finalized agreement, the impact is unascertained.

Our opinion is not modified in respect of these matters.

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 of the Act, we give in the ‘Annexure- A’, a statement on the matters specified in the paragraph 3 and 4 of the order.

2. We are enclosing our report in terms of Section 143 (5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, in the ‘Annexure-B’ on the directions and sub-directions issued by Comptroller and Auditor General of India.

3. 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, Statement of Profit and Loss including other comprehensive income/loss, statement of Cash Flow 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 Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued there under;

(e) On the basis of the written representations received from the directors as on 31 March 2018, and 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 and the operating effectiveness of such controls, refer to our separate report in ‘Annexure- C’; our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

(g) with respect to the other matters to be included in the Auditors’ 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 Ind AS financial statements - Refer to Note No. 32 of ‘Significant Accounting Policies & Notes to the financial statements’.

ii) The Company has made provision, as required under the applicable law or accounting standards, for foreseeable losses, if any,- refer to Note No. 7, 8, 11, 15 and 21 of ‘Significant Accounting Policies & Notes to the Financial Statements’.

iii) There has been no amount that is required to be transferred to the Investor Education and Protection Fund by the Company.

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

(i) In respect of Company’s fixed assets:

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

(b) The Company has a regular programme of physical verification of its fixed assets. In accordance with this programme, fixed assets were verified during the year by an external Cost Management Accountants firm and no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the company as at the Balance Sheet date.

(ii) As explained to us, the company has a regular program of physical verification of Inventories, the physical verification of the inventory (excluding Inventory with third parties) have been carried out by external Cost Management Accountants firm and no material discrepancies were noticed on such verification.

(iii) According to information and explanations given to us, the Company has not granted any loan Secured or unsecured, to the companies, firms, limited liability partnerships or other parties covered in register maintained under section 189 in the Act.

(iv) In our opinion and according to the information and explanations given to us, the Company has not granted any loan investments, guarantees, and security covered under section 185 or 186 of the Act, accordingly clause (iv) of the order are not applicable to the company for the year ended March 2018.

(v) According to the information and explanation given to us, the company has not accepted any deposits during the year in terms of Sections 73 to 76 or any other relevant provisions of Companies Act, 2013.

(vi) The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for the goods manufactured by the Company.

(vii) Accourding to the information and explanation given to us, in respect of statutory dues:

(a) As per records, the Company is regular in depositing undisputed statutory dues including Provident Fund, Employee State Insurance, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and any other statutory dues, to the extent applicable to it with the appropriate authorities and as informed no undisputed amount were outstanding as at 31st March, 2018 for a period of more than six month the date of becoming payable, except the following:

Sl.

No.

Name of the dues

Nature of the dues

Period

Amount (Rs. lakhs)

1

Kerala sales Tax Act

State sales Tax

92-93,93-94 & 94-95

4.22

Total

4.22

(b) The disputed statutory dues aggregating Rs. 2402.92 lakhs and indeterminate interest that have not been deposited on account of matters pending before appropriate authorities are as under:

Sl

No.

Name of the dues

Nature of the dues

Forum where dispute is pending

Period

Amount (Rs. lakhs)

1. (a)

State Sales Tax Act

Entry Tax &

Penalty

Taxes

Commissioner of Commercial Taxes

97-98 to 06-07

113.77

(b)

State Sales Tax Act

Entry Tax & Penalty

Tribunal

03-04,04-05 & 05-06

10.55

2. (a)

Central Excise & Service Tax

Service Tax

Commissioner

(Appeals)

October 2002-March 2007

3.22 & 6.49 Penalty & Indeterminate Interest

(b)

Central Excise & Service Tax

Service Tax

Assistant

Commissioner

2014-15

0.74 & 0.74 Penalty & Indeterminate Interest

(c)

Central Excise & Service Tax

Central

Excise

Assistant

Commissioner

April 2010-September 2010

0.74 & 0.74 Penalty & Indeterminate Interest

(d)

Central Excise & Service Tax

Central

Excise

Additional

Commissioner

2005-06 to 2008-09

2.48 & 2.48 Penalty & Indeterminate Interest

(e)

Central Excise & Service Tax

Central

Excise

Tribunal

Allahabad

August 2008 to March 2013

1.10 & 1.10 Penalty & Indeterminate Interest

3.

Income Tax Act

Income Tax

Dy. Commissioner of Income Tax, Range VI, Lucknow

F.Y. 2001-02 to 2008-09, 2013-14 to 2015-16

'' 2258.77

TOTAL

'' 2402.92 Penalty & Indeterminate Interest

(viii) In our opinion and according to information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions or bank or debentures holders, except for the term loan provided by the Government of India which the company has not repaid as the matter is being taken up with the Department of Heavy Industry for maintaining the status quo.

(ix) The company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year however the company has raised term loan in earlier year which has been applied for the purpose for which they have been raised.

(x) Based upon the audit procedures performed and information given to us, we report that no fraud on or by the company has been noticed or reported during the year by management. However, as explained to us by the management that in the Financial Year 2008-09 Board of Directors revealed that a commercial agreement was executed by the then CMD without the authority of the Board and after due consideration the board decided to refer the matter to the appropriate authority for future action, however no action on the same was reported to us.

(xi) Being a Government Company, pursuant to Notification No. G.S.R. ,463(E) dated 5th June 2015 issued by Government of India Provisions of Section 197 of the Act are not applicable to the company.

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

(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 not in compliance with Section 177 of the Act as the company has not formed an audit committee however the company has complied with Section 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into noncash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

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

Directions under section 143(5) of Companies Act, 2013

1. Whether the Company has clear title/lease deeds for freehold and leasehold land respectively? If not, please state the area of freehold and leasehold for which title/lease deeds are not available.

The company has clear title of lease hold land located in 16, Milestone at Lucknow Kanpur road, ad measuring 147.50 Acres vide lease hold agreement dated 5th Oct 1974 for the land of 125.29 acres and dated 10th August 1976 for the land of 22.209 acres with U.P. state Industrial department corporation, Kanpur for a period of 90 Years.

2. Please report whether there are any cases of waiver/write off of debts/loans / interest etc., if yes, the reasons there of and the amount involved.

As informed, the company has not waived/written off any debts/loans /interest etc. However the company has made provisions for doubtful debt against receivables of Rs.12.53 lakhs the reason for the provision as explained to us is non recovery of the said amounts from the respective parties and the amount is due and unrecovered since long the same is disclosed in Note No. 28 of the ‘Significant Accounting Policies & Notes to the Financial Statement’ for the year ended 31st March 2018.

3. Whether proper records are maintained for inventories lying with third parties & assets received as gift from Gov. or other authorities.

Proper records have been maintained for such inventories of '' 31.13 lakh which are lying with the third parties. However they are subject to adjustments, if any on reconciliation as most of the balances have not been confirmed and further physical verification for such inventory was not conducted by the company. The same has been disclosed in Note No. 07 and Note No. 35 of ‘Significant Accounting Policies & Notes to the Financial Statement’ for the year ended 31st March 2018.

Sub-Direction under section 143(5) of Companies Act, 2013- Nil

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 Scooters India Limited (‘the Company’) as of 31 March 2018 in conjunction with our audit 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 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 the 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 were 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 auditors’ 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 the 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, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 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 Dhawan & Madan

Place: Lucknow Chartered Accountants

Date: 29th May 2018

P. K. Dhawan

(Partner)

M.No.:-074258

स्रोत: रेलीगरे टेचनोवा

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