sunil hitech engineers ltd Auditors report

 

To,

The Members of Sunil Hitech Engineers Limited,

Nagpur

We have audited the accompanying financial statements of M/s Sunil Hitech Engineers Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow and Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managements Responsibility for the Financial Statements

The Companys 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 standalone Ind

AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance 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. 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 judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are 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 Act and the Rules made thereunder. 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 financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone

Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companys preparation of the standalone Ind AS financial statements that give a true and fair view 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 Companys Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 31stMarch, 2018, and its profit including other the changes in equity for the comprehensiveincome,its cash flows year ended on that date.

Emphasis of Matter

We draw your attention to income from operations/net sales presented in the financial statements which includes project related claims for Rs. 491.21 crores, the recoverability of which depends on the outcome of negotiations/ arbitrations with the customers. Our Opinion is not modified in respect of the same.

Report on Other Legal and Regulatory withRequirements

As required by the Companies (Auditors Report) Order 2016 ("the Order") issued by the Central Government of India in terms of subsection (11) of section 143 of the Companies Act, 2013, we give in the "Annexure A", statement on the matters specified in the paragraphs 3 and 4 of the Order to the extent applicable.

As required by Section 143 (3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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 BalanceSheet,theStatement Profitand Loss including the Statement of 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 financial statements comply with the Accounting Standards specified under Section 133 of the Act, with read with the Companies (Indian Accounting Standards) Rules, 2015 as amended

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

f. 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 standalone Ind As financial statements Refer disclosure note B to the financial statements.

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

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

For and on Behalf of

K. K. MANKESHWAR & CO.

Chartered Accountants

FRN: 106009W

ABHAY UPADHYE

Partner

Membership No. 049354

Place: Nagpur

Dated : 30th May, 2018

The annexure referred to in our independent auditors report to the members of M/s. Sunil Hitech Engineers Limited, ("The Company") on the Financial Statements for the year ended 31st March 2018, we report that:

i. In respect of Fixed Assets:

a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets except location wise details of some of the moveable assets shifted/transferred amongst various sites;

b) The fixed assets have been physically verified by the management during the year under its regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such physical verification.

c) According to the information and explanation given to us by the management, the title deeds of immovable properties are held in the name of the company.

ii. Physical verification of inventory has been conducted at reasonable intervals by the management. In our opinion, the procedures of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business and no material discrepancies were noticed on such physical verification.

iii. In respect of Loans and Advances:

a) The company has granted unsecured loans to four companies covered in the register maintained under section 189 of the Companies Act, 2013. The maximum amount outstanding during the year and amount outstanding at year end is Rs. 608.68 lakhs.

b) The rate of interest wherever charged, and other terms & conditions thereof are prima facie, not prejudicial to the interest of the company except for one loan granted to a subsidiary, on account of the fact that loan is non-interest bearing.

c) There is no overdue amount for more than ninety days.

iv. According to the information and explanation given to us, the company has complied with the provision of section 185 and 186 of the Companies Act, 2013 in respect of loans, guarantees, investments and securities.

v. The Company has not accepted any deposits from public within the meaning of sections 73 to 76 or any other relevant provision of the Companies Act and the rules framed there under, where applicable.

Therefore the said clause is not applicable to the Company.

vi. The Central Government has prescribed maintenance of cost records under sub section (1) of section 148 of the Companies Act 2013 in respect of one of the products, manufactured by the company. We have broadly reviewed the accounts and records of the company and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, carried out a detailed examination of the accounts and records with a view to determine whether these are accurate or complete.

vii. In respect of statutory dues:

a) Undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues have not been regularly deposited with the appropriate authorities and there has been serious delays in a large number of cases.

b) According to the information and explanations given to us, undisputed dues outstanding as at 31st March, 2018, for a period more than six months from the date they become payable are as under:

Statue	Particulars	Amount (In Rs. lakhs)	Due date	Date of Payment
Employees Provident	Provident Fund	9.55	15-06-2017 &15-10-2017	April 2018
Fund and Miscellaneous Provisions Act, 1952
Employees Provident Fund and Miscellaneous Provisions Act, 1952	Provident Fund	33.31	15-04-2017 to 15-08- 2017	Unpaid

c) According to the information and explanations given to us based on the records of the company examined by us, there are no dues of Income Tax, Sales tax, Service Tax, Customs duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of a dispute, except as enumerated herein below which are pending before respective authorities as mentioned there against.

Name of the statute	Nature of dues	Amount (In Rs. lakhs)	Period to which amount relates (FY)	Forum where dispute is pending
Service tax under Finance Act, 1994 & The Central Excise Act, 1994	Service Tax (Basic & Penalty)	1083.52	2005-06 to 2013-14	Custom, Excise, Service Tax Appellate Tribunal
The Customs Act, 1962	Customs duty	138.17	2007-08, 2008-09	Commissioner of Customs (Im- port), Mumbai
The Income-Tax Act, 1961	Income Tax	283.81	2008-09, 2004-05	Income Tax Appellate Tribunal Mumbai
The Income-Tax Act, 1961	Income Tax	94.74	2008-09, 2009-10	CIT Appeals, Nagpur

viii. According to the information and explanation given to us, the Company has defaulted in repayment of certain loans to the lenders, as on the reporting date. Details of default to the Financial Institutions are as follows:

Particulars	Amount of default as at Balance Sheet Date (In Rs. lakhs)	Period of Default	Remarks
L&T Family Credit Limited	400.00	Two months	The financer has revoked the Bank Guar - antee, issued by the Company, against loan amount and recovered the unpaid dues.

ix. According to the information and explanations given to us, Company has not raised money by way of initial public offer or further public offer (including debt instruments). In our opinion and according to the explanations given to us, the term loans were applied for the purposes for which those were raised.

x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

xi. In respect of payment of managerial remuneration within the prescribed limits under provisions of Section 197 of the Companies Act, 2013 (‘the Act) a) The company had paid managerial remuneration of Rs. 196 lakhs over and above the limits prescribed by provisions of Section 197 read with Schedule V of the Act.

b) The Company is in the process of ratification of the managerial remuneration paid to Managing Director and Whole-time Director during the said period by members resolution under provisions of Section 196 and 197 read with Schedule V of the Act. Further the Board of Directors is yet to decide on refund/ ratification/adjustment of managerial remuneration paid to

Non-Executive Director of the Company.

xii. In our opinion, the Company is not a Nidhi Company; accordingly clause (xii) of paragraph 3 of the order is not applicable to the Company.

xiii. According to the information and explanations given to us, transaction with related parties are in compliance with section 177 and 188 of Companies Act, 2013 wherever applicable and the details have been disclosed in the Financial Statement etc., as required by the applicable accounting standards.

xiv. According to the information and explanations given to us, the company has not issued fully or partially convertible debentures during the year. In our opinion and according to the explanations given to us the preferential allotment/private placement of eight crores thirty three lakh shares are in compliance with the section 42 of the Companies Act, 2013 wherever applicable, and the amounts raised against these allotment are applied for the purposes for which they were raised.

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 non-cash transactions with directors or persons connected with him. Accordingly, clause (xv) of the paragraph 3 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. Accordingly, clause (xvi) of the paragraph 3 of the Order is not applicable.

For and on Behalf of

K. K. MANKESHWAR & CO.

Chartered Accountants

FRN: 106009W

ABHAY UPADHYE

Partner

Membership No. 049354

Place: Nagpur

Dated : 30th May, 2018

"ANNEXURE B" TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF M/s SUNIL HITECH ENGINEERS LIMITED

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 of M/s Sunil Hitech Engineers Limited as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys 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. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring its business, including adherence theorderlyandefficient to Companys 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 Companys 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 auditors judgement, 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 Companys internal financial controls system over financial reporting.

Meaning of Internalreporting Financial Controls over Financial Reporting

A Companys 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 Companys 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 authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companys 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 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 and on Behalf of

K. K. MANKESHWAR & CO.

Chartered Accountants

FRN: 106009W

ABHAY UPADHYE

Partner

Membership No. 049354

Place: Nagpur

Dated : 30th May, 2018