EMCO Ltd


BSE: 504008 | NSE: EMCO | ISIN: INE078A01026 
Market Cap: [Rs.Cr.] 202 | Face Value: [Rs.] 2
Industry: Electric Equipment

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Auditor's Report

Independent Auditor

To the Members of

Emco Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Emco Limited ("theCompany"), which comprise the Balance Sheet as at 31st March 2013, and theStatement of Profit and Loss and the Cash Flow Statement for the year then ended, and asummary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position, financial performance and cash flows of theCompany in accordance with the Accounting Standards referred to in sub-section (3C) ofsection 211 of the Companies Act, 1956 ("the Act"). This responsibility includesthe design, implementation and maintenance of internal control relevant to the preparationand presentation of the financial statements that give a true and fair view and are freefrom material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement ofthe financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the Company’s preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us, the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31stMarch 2013;

(b) in the case of the Statement of Profit and Loss, of the profit for the year endedon that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended onthat date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 ("theOrder") issued by the Central Government of India in terms of subsection (4A) ofsection 227 of the Act, we give in the Annexure a statement on the matters specified inparagraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash FlowStatement comply with the Accounting Standards referred to in subsection (3C) of section211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on 31stMarch, 2013, and taken on record by the Board of Directors, none of the directors aredisqualified as on 31st March 2013, from being appointed as a director in termsof clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For P. RAJ & CO. For CHATURVEDI & SHAH
Chartered Accountants Chartered Accountants
Firm Registration No. 108310W Firm Registration No. 101720W
Sd/- Sd/-
Sanjay Chheda Amit Chaturvedi
Partner Partner
Membership No. 103938 Membership No. 103141
Mumbai, Mumbai,
9th May 2013 9th May 2013

Annexure referred to the Auditors’ Report

(Referred to in paragraph 1 of our report of even date)

1. The Company has maintained proper records showing full particulars, includingquantitative details and situation of fixed assets.

As explained to us, the fixed assets have been physically verified by the management asper a phased programme of verification. In our opinion, the frequency of verification isreasonable having regard to the size of the Company and the nature of its fixed assets.The discrepancies noticed on such verification were not material and have been properlydealt with in the books of account.

The Company has not disposed off a substantial part of fixed assets during the year.

2. The management has conducted physical verification of inventories at reasonableintervals. In respect of stocks lying with the third parties, confirmation for most of thestocks has been received.

In our opinion and according to information and explanations given to us, theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

The Company is maintaining proper records of inventories. The discrepancies noticed onverification between physical inventories and the book records were not material inrelation to the operations of the Company and the same have been properly dealt with inthe books of account.

3. In respect of the loans, secured or unsecured, granted or taken by the Company to /from companies, firms or other parties covered in the register maintained under Section301 of the Companies Act, 1956:

a) According to the information and explanations provided to us and as per the recordsexamined by us, as at 31st March 2013, Company has granted unsecured loans totwo of its wholly owned subsidiaries covered in the register maintained under section 301of the Companies Act, 1956. The maximum balance outstanding at any time during the yearwas Rs 12,357.09 lakhs and the year-end balance is Rs 11,646.87 lakhs.

In our opinion and according to the information and explanations given to us, the rateof interest, other terms and conditions of such loan are prima facie not prejudicial tothe interest of the Company.

The loan granted to one of wholly owned subsidiary is repayable on demand and to otherwholly owned subsidiary is not due during the year for repayment; hence question ofoverdue principal amount doesn’t arise. In respect of one of subsidiary receipt ofinterest is regular and for other wholly owned subsidiary there is no stipulation as topayment of interest, which is annually converted into loan.

b) As per information and explanations provided to us, the Company has not taken anyloans, secured or unsecured from companies, firms or other parties covered in the registermaintained under section 301 of the Companies Act, 1956. Consequently, the requirements ofClauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not applicable.

4. In our opinion and according to the information and explanations provided to us,there are adequate internal control procedures commensurate with the size of the Companyand the nature of its business, for the purchase of inventories, fixed assets and for thesale of goods and services. During the course of our audit, no major weakness has beennoticed in the internal controls in respect of these areas.

5. Based on the audit procedures applied by us and according to the information andexplanations provided by the management, we are of the opinion that all the particulars ofcontracts or arrangements that need to be entered into the register maintained undersection 301 of the Companies Act, 1956 have been so entered.

In our opinion and according to the information and explanations provided to us, thetransactions made in pursuance of such contracts or arrangements have been made atreasonable prices having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations provided to us, theCompany has not accepted any deposits from the public. Therefore, the provisions of Clause(vi) of paragraph 4 of the Order are not applicable to the Company.

7. In our opinion the Company has an internal audit system commensurate with the sizeand nature of its business.

8. We have broadly reviewed the cost records maintained by the Company pursuant (CostAccounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) and are of the opinion that prima facie the prescribed records have been made andmaintained. We have however not made a detailed examination of the records with a view todetermine whether they are accurate or complete.

9. According to the information and explanations provided to us and on the basis of ourexamination of the books of account, the Company has been generally regular in depositingundisputed statutory dues including Provident Fund, Employees’ State Insurance,Income-tax, Customs Duty, Wealth Tax, Service Tax, Value Added Tax, Excise Duty, Cess,Investor Education and Protection Fund, and other material statutory dues during the yearwith the appropriate authorities. As on 31st March 2013, there are noundisputed dues payable for a period of more than six months from the date they becamepayable.

As at 31st March 2013, according to the records of the Company and theinformation and explanations given to us, disputed dues on account of Income Tax, SalesTax, Service Tax, Excise Duty and other material statutory taxes that have not beendeposited before appropriate authorities are as under:-

Name of Statute Nature of Dues Amount (Rs in lakhs) Period to which the amount relates Forum where the dispute is pending
Sales Tax Act Maharashtra Sales Tax 18.53 1992-93 Assistant Commissioner of Sales Tax
Sales Tax Act Tamil Nadu VAT 137.51 2006-08 The Appellate Deputy Commissioner
Sales Tax Act West Bengal VAT 42.91 2007-08 West Bengal Commercial Taxes Appel- late and Revision Board
Sales Tax Act Gujarat VAT 0.35 2007-08 Deputy Commissioner of Commercial Tax
Sales Tax Act West Bengal VAT 34.39 2009-10 Joint Commissioner of Sales Tax
Sales Tax Act Jharkhand VAT 3.38 2008-09 Deputy Commissioner of Commercial Tax
Sales Tax Act Uttar Pradesh VAT 4.80 2011-12 Additional Commissioner Grade II
Central Excise Act Penalty Proceeding 1.51 2002-05 CESTAT
Central Excise Act Short Payment of Duty 6.98 2007-08 CESTAT
Central Excise Act Interest 2.86 2009-10 CESTAT
Central Excise Act Excise Duty 37.00 2011-12 Commissioner (Appeals)
Service Tax Service Tax and Penalty 88.57 2004-07 Commissioner (Appeals), Central Excise and Customs
Service Tax Service Tax 6.24 2006-09 CESTAT
Service Tax Service Tax 3.49 2006-10 CESTAT
Service Tax Service Tax 3.89 2009-10 CESTAT
Service Tax Service Tax 1.18 2010-11 CESTAT
Service Tax Service Tax 5.86 2010-11 Commissioner (Appeals), Central Excise and Customs

In the following matters, the department has preferred appeals at higher levels:

Name of the Statute Nature of Dues Amount Rs in lakhs) Financial Year to which the amount relates Forum where dispute is pending
Sales Tax Act Rajasthan VAT 6.38 2008-10 Commercial Tax Officer
Central Excise Act Excise Duty 141.32 1996-01 Supreme Court
Central Excise Act Excise Duty 4.69 2000-03 CESTAT
Central Excise Act Excise Duty 3.14 2008-09 CESTAT
Income Tax Act Income Tax 22.50 2007-08 ITAT
Income Tax Act Income Tax 36.15 2008-09 ITAT

10. The Company does not have accumulated losses at the end of the financial year. TheCompany has not incurred cash losses in current financial year and in the immediatelypreceding financial year.

11. Based on our audit procedures and as per the information and explanations providedby the management, we are of the opinion that, the Company has not defaulted in repaymentof dues to any financial institution or bank or to debenture holders as at the BalanceSheet date.

12. Based on our audit procedures and according to the information and explanationsprovided to us, the Company has not granted loans and advances on the basis of security byway of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund / nidhi / mutual benefit fund /society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable tothe Company.

14. In our opinion, the Company is not dealing in or trading in shares, debentures andother investments. Accordingly, the provisions of clause 4(xiv) of the Order are notapplicable to the Company.

15. According to the information and explanations provided to us and the recordsexamined by us, the Company has given guarantee for loan taken by its wholly ownedsubsidiary from bank. According to information and explanation given to us, we are of theopinion that terms and conditions of guarantee given is not prejudicial to the interest ofthe Company.

16. The Company has not raised any term loans during the year covered under audit.

17. According to the information and explanations provided to us and on an overallexamination of the balance sheet of the Company, we are of the opinion that the fundsraised on short-term basis have not been used for long-term investment.

18. According to the information and explanations provided to us and on the basis ofrecords examined by us, during the year Company has not made a preferential allotment ofshares to parties and companies covered in the Register maintained under Section 301 ofthe Companies Act, 1956.

19. According to the information and explanations provided to us and the recordsexamined by us, the Company has created security and charge in respect of debenturesissued.

20. The Company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations providedby the management, we report that no fraud on or by the Company has been noticed orreported during the course of our audit.

For P. RAJ & CO. For CHATURVEDI & SHAH
Chartered Accountants Chartered Accountants
Firm Registration No. 108310W Firm Registration No. 101720W
Sd/- Sd/-
Sanjay Chheda Amit Chaturvedi
Partner Partner
Membership No. 103938 Membership No. 103141
Mumbai, Mumbai,
9th May 2013 9th May 2013
   

Peer Comparison

Company Market Cap
(Rs. in Cr.)
P/E (TTM)
(x)
P/BV (TTM)
(x)
EV/EBIDTA
(x)
ROE
(%)
ROCE
(%)
D/E
(x)
B H E L 44,313.80 9.13 1.46 3.53 23.7 23.4 0.03
Siemens 26,917.60 145.65 6.68 32.11 4.4 5.2 0.00
A B B 17,964.88 106.64 6.71 30.47 6.7 12.5 0.18
Crompton Greaves 11,880.55 23.64 3.91 8.27 15.6 21.2 0.00
Havells India 11,671.92 25.85 6.24 14.61 21.4 25.9 0.07
Alstom T&D India 6,657.30 63.88 7.29 13.06 8.0 13.7 0.57
Suzlon Energy 3,324.17 0.00 0.96 0.00 0.0 0.0 2.09
ALSTOM India 2,636.76 14.81 3.31 5.98 24.8 36.0 0.00
Triveni Turbine 2,484.48 31.12 17.55 9.83 102.7 122.3 0.17
Schneider Elect. 2,198.52 0.00 9.22 65.60 0.0 0.0 0.91
V-Guard Inds. 1,500.11 25.60 5.74 12.77 26.7 26.5 0.58
Matra Kaushal 1,043.19 0.00 51.77 0.00 0.0 0.0 0.01
TD Power Sys. 943.68 31.03 2.05 9.66 8.0 12.3 0.07
Techno Elec. 760.57 13.44 1.33 8.82 11.0 12.0 0.36
Honda Siel Power 679.53 39.03 2.43 7.64 7.6 11.3 0.00

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Key Information

Key Executives:

Rajesh S Jain , Chairman  

Shailesh S Jain , Vice Chairman  

K N Shenoy , Director  

S V Deo , Director  


Company Head Office / Quarters:
N-104 MIDC Area,
,
Jalgaon,
Maharashtra-425003
Phone : 91-257-2272462/2272572
Fax : 91-257-2272598
E-mail : emco.jelgaon1@emcoindia.com
Web : http://www.emcoindia.com
Registrars:

No data found

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