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TO THE MEMBERS OF
Monica Electronics Limited
Report on the financial statements
We have audited the accompanying financial statements of Monica Electronics Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.
Managements responsibility for the financial statements
Management is responsible for the preparation of these 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 Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility includes the design, implementation and maintenance of internal control 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.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 disclosures in the financial statements. 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. In making those risk assessments, the auditor considers internal control relevant to the Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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 qualified audit opinion.
Basis for Qualified Opinion
Reference is invited to Note 2.8(a) to the financial statements, advances recoverable includes
Rs 228.95 Lacs (previous year Rs 231.40 Lacs) from corporate companies for which no provision has been made as the confirmation of balances from the parties are on record. However, as per analysis of their net worth, based on the financial statements available, the recovery of the amount is doubtful.
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid 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:
a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2017; b) in the case of the statement of Profit and Loss, of the loss for the year ended on that date; and c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. 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 appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from branches not visited by us.
c. the report on the accounts of the branch offices audited under section 143(8) by a person other than the companys auditor has been sent to us as required by proviso to clause (8) of section 143 and have been dealt with in preparing our report in the manner considered necessary by us- Not applicable
d. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account [and with the returns received from branches not visited by us;
e. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
f. Observation or the comments on financial transaction on matters having adverse effect on the functioning of company :-
i) Reference is invited to Note 2.8(a) to the financial statements, advances recoverable includes Rs. 228.95Lacs (previous year Rs. 231.40Lacs) to corporate companies for which no provision has been made as the confirmation of balances from the parties are not on record. However, as per analysis of their net worth, based on the financial statements available, the recovery of the amount is doubtful.
ii) We draw attention to Note 2.8(b) to the financial statements, on other loan and advances include a sum of Rs. 3 lacs (previous year Rs. 3 lacs) being fixed deposit with bank held in the names of ex-employee of the company and are pledged with District court, New Delhi. Interest accrued on above has not been provided in view of uncertainty regarding its realization.
iii) We draw attention to Note 2.13 to the financial statements, on balances grouped under advanced received from Customers and advances recoverable are under reconciliation and subject to confirmation from respective parties.
The final adjustment, if any shall be made on reconciliation of the same. The impact, if any, on the loss for the year cannot be ascertained at this stage.
iv) We draw attention to Note 2.16 to the financial statements, on the accounts which have been prepared as a going concern inspite of the fact that due to labour problem, the company has close down its manufacturing operations and its entire net worth has been eroded.
v) Trading of shares of the company has been suspended by the stock exchanges because of penal reasons.
g. on the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of sub-section (2) of section164 of the Companies Act, 2013.
h. In our opinion proper books of account as required by law have been maintained by the Company so far as appears from our examination of those books.
i. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control systems in place and operative effectiveness of such controls commensurate with the size of the company and the nature of its business.
j. Report on Other matters prescribed in clause no 11 of The Companies (Audit & Auditors) Rules,
a) No provision have been made for the following disputed dues on account of excise duty which has not been deposited. This liability will impact adversely on the financials of the company:-
|Name of Statue||Nature of dues||Amount (Rs in Lacs)||Financ ial year to which relates||Forum where pending|
|Central Excise Laws||Excise duty - Differenti al Duty, Interest and Penalty||101.70 lacs||1998-99||CESTAT|
b) As per the books of accounts & as explained to us there are no material foreseeable losses on long term contracts including derivatives contract.
c) The amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 2013 and rules made there under has been transferred to such fund within time.
d) The company has provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and these are in accordance with the books of accounts maintained by the company.
FOR AGARWAL SETH CO.
Membership No:- 090508
Place : New Delhi
Dated : 29th May, 2017
The Annexure referred to in paragraph 1 of the Our Report of even date to the members of
Monica Electronics Limited. on the accounts of the company for the year ended 31st March, 2017.
On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:
1. (a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.
(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals except for Land for which provision for loss on impairment have been made in accounts.
(c) The title deeds of immovable properties are held in the name of the company.
2. The company does not have any inventory at the end of the year.
3. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken any loans any loan from / to companies or firm covered in the register maintained under section 189 of the Companies Act, 2013 during the year.
The company had granted loans to associate company amounting to Rs.2,28,94,856/- (Previous year Rs.2,31,39,856/-)which is outstanding in the books of accounts as Advances Recoverable from corporate companies. In our view the recovery of these loans is doubtful but no provision has been made in the books of accounts .
(a) The confirmation of balances from the parties is not made available for our verification & as per analysis of their net worth, based on the financial statements available, the recovery of the amount is doubtful. (b) The schedule of repayment of principal and payment of interest has not been stipulated.
(c) Due to lack of information we are not able to comment on whether reasonable steps have been taken by the company for recovery of the principal and interest (d)The said loan is prejudicial to the interest of the company being interest free & non recoverable.
4. In respect of loans, investments, guarantees, and security provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.
5 The company has not accepted any deposits from the public covered under section 73 to 76 of the Companies Act, 2013.
6. The company has not maintaining any cost records under section 148(1) of the Companies Act, 2013 as no manufacturing activities have been carried out during the year.
7. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities.
According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2017 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there is no dues of sales tax, income tax, custom duty, wealth tax and cess which have not been deposited on accounts of any dispute. However, according to the records of the company and the information and explanations given to us, the following are the particulars of disputed dues on account of excise duty which has not been deposited.
|Name of Statue||Nature of dues||Amount (Rs. in Lacs)||Financial year to which relates||Forum where pending|
|Central Excise Laws||Excise duty - Differential Duty, Interest and Penalty||101.70 lacs||1998-99||CESTAT|
8. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank, government or dues to debenture holders.
However the company had filed a petition u/s 391 in the Delhi High Court for sanction of Scheme of Arrangement with debenture holders. The Delhi High Court vide its order dated 14.12.2004 approved the said scheme of Arrangement. The company paid off to all the debenture holders as per the terms of Scheme by depositing the outstanding amount in a no lien account with ICICI Bank Ltd., and out of total payment a sum of Rs.1785750/- has not been encashed by the debenture holders & as explained to us unpaid balance have been transferred to Investor education and protection fund as per section 204C of the Companies Act, 1956 in previous years
9. Moneys raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those were raised.
10. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud by the Company or any fraud on the company by its officers or employees has been noticed or reported during the year, nor have we been informed of such case by the management.
11. Managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
12. The Company is not a Nidhi Company.
13. The company does not have constituted Audit Committee so the provisions of Section 177 of the
Companies Act, 2013 have not been complied .
All the transactions covered under section 188 of Companies Act, 2013 are in compliance where applicable and details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards;
14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
15. The company has not entered into any non-cash transactions with directors or persons connected with him.
16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
FOR AGARWAL SETH & CO.
Membership No. : 090508
Place: New Delhi