To the Members of Switching Technologies Gunther Limited Report on the Financial
Statements
Opinion
We have audited the accompanying standalone financial statements of Switching
Technologies Gunther Limited ("the Company"), which comprises of the balance
sheet as at March 31, 2023, the Statement of Profit and Loss (including other
comprehensive income), the Statement of Changes in Equity, the Statement of Cash Flows for
the year then ended, and notes to the financial statements, including a summary of
significant accounting policies and other explanatory information. In our opinion and to
the best of our information and according to the explanations given to us, the aforesaid
standalone financial statements give the information required by the Companies Act, 2013
("the Act") in the manner so required and give a true and fair view in
conformity with the Indian Accounting Standards prescribed under section 133 of the Act
read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind
AS") and other accounting principles generally accepted in India, of the state of
affairs as at March 31, 2023, and its profit, total comprehensive income, its cash flows
and the changes in equity for the year ended on that date. Emphasis of Matter Material
uncertainty related to Going Concern We draw attention to the Note 37 in the Financial
Statements. The company has incurred operating loss (excluding exceptional income) of 1,018.43 Lakhs/- during the year ended March 31, 2023 and as of that date, the Companys
accumulated losses aggregate to \ 478.40 Lakhs/- resulting in complete erosion of its net
worth. These factors along with other matters as set forth in said notes cast material
uncertainty about the Companys ability to continue as a going concern in the foreseeable
future. However, the Companys financial statement has been prepared on going concern
basis as disclosed by management in said note. Our opinion is not modified in respect of
this matter. Emphasis of Matter We draw attention to Note 28 to the financial statements.
Exceptional items represents write back of credit balances in respect of purchase of raw
materials, consumables etc payable to Group Companies amounting to INR 2,152.05 Lakhs. The
write back has been approved by the Board in its meeting dated May 29, 2023 and is in the
process of intimation to the AD Bank as per prevailing regulations as applicable. Further,
the Management confirms that no interest / penal charge is being made by the Group Company
on account of such write back. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. We
have determined that there are no key audit matters to communicate in our report.
Information Other than the Standalone Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the preparation of the other
information. The other information comprises the information included in the Management
Discussion and Analysis, Boards Report including Annexures to Boards Report, Business
Responsibility Report, Corporate Governance and Shareholders Information, but does not
include the standalone financial statements and our auditors report thereon. Our opinion
on the standalone financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon. In connection with our audit of the
standalone financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the
standalone financial statements or our knowledge obtained during the course of our audit
or otherwise appears to be materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information; we are
required to report that fact. We have nothing to report in this regard. Responsibilities
of Management and Those Charged with Governance for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in section 134(5)
of the Act with respect to the preparation of these standalone financial statements that
give a true and fair view of the financial position, financial performance, changes in
equity and cash flows 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. 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 implementation and maintenance of 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 financial statement that give
a true and fair view and are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is responsible for assessing the
Companys ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so. Those Board of Directors are also responsible for overseeing the
Companys financial reporting process. Auditors Responsibilities for the Audit of the
Financial Statements Our objectives are to obtain reasonable assurance about whetherthe
financial statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditors report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements. As part of an audit in accordance with
SAs, we exercise professional judgment and maintain professional skepticism throughout the
audit. We also:
. Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
. Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the
Act, we are also responsible for expressing our opinion on whether the company has
adequate internal financial controls system in place and the operating effectiveness of
such controls.
. Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
. Conclude on the appropriateness of managements use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors
report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
. Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation. Materiality is the
magnitude of misstatements in the standalone financial statements that, individually or in
aggregate, makes it probable that the economic decisions of a reasonably knowledgeable
user of the standalone financial statements may be influenced. We consider quantitative
materiality and qualitative factors in (i) planning the scope of our audit work and in
evaluating the results of our work; and (ii) to evaluate the effect of any identified
misstatements in the standalone financial statements. We communicate with those charged
with governance regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit. We also provide those charged with governance with a
statement that we have complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards. From the
matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the standalone financial statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditors report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
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 Act, we give in the Annexure A, a statement on the matters specified in the paragraph
3 and 4 of the order, to the extent applicable. (A)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;
The balance sheet, the statement of profit and loss and the cash flow statement dealt
with by this Report are in agreement with the books of account; In our opinion, the
aforesaid standalone financial statements comply with the Indian Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014; On the basis of the written representations received from the directors as on
March 31, 2023 taken on record by the Board of Directors, none of the directors is
disqualified as on March 31, 20283 from being appointed as a director in terms of Section
164 (2) of the Act; 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 B"; (B) 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: the Company has disclosed the impact, wherever necessary, of
pending litigations on its financial position in its financial statements - Refer Note 29
to the financial statements;
the Company has made provision, as required under the applicable law or Indian
Accounting Standards, for material foreseeable losses, if any, on long-term contracts
including derivative contracts; There has been no delay in transferring amounts, required
to be transferred, to the Investor Education and Protection Fund by the Company. The
Management has represented that, during the financial year ending March 31, 2023, to the
best of its knowledge and belief, no funds have been advanced orloaned or invested
(either from borrowed funds or share premium or any other sources or kind of funds) by the
Company to or in any other person(s) or entity(ies), including foreign entities
("Intermediaries"), with the understanding, whether recorded in writing or
otherwise, that the Intermediary shall, directly or indirectly lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Company
("Ultimate Beneficiaries") or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries v. The Management has represented, that, during the
financial year ending March 31, 2023, to the best of its knowledge and belief , no funds
have been received by the Company from any person(s) or entity(ies), including foreign
entities ("Funding Parties"), with the understanding, whether recorded in
writing or otherwise, that the Company shall, directly or indirectly, lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or
the like on behalf of the Ultimate Beneficiaries. vi. Based on the audit procedures
performed that have been considered reasonable and appropriate in the circumstances,
nothing has come to our notice that has caused us to believe that the representations
under sub-clause (i) and (ii) of Rule 11(e) contain any material mis-statement. vii. The
company has not declared or paid any dividend during the financial year ended 31st March,
2023 and thus the reporting requirement as per Rule 11(f) is not applicable. (C)With
respect to the matter to be included in the Auditors Report under Section 197(16) of the
Act: In our opinion and according to the information and explanations given to us, the
remuneration paid by the Company to its directors during the current year is in accordance
with the provisions of Section 197 of the Act. The remuneration paid to any director is
not in excess of the limit laid down under Section 197 of the Act. The Ministry of
Corporate Affairs has not prescribed other details under Section 197(16) which are
required to be commented upon by us. For and on behalf of VV Kale & Co Chartered
Accountants Firm Reg. Number: 000897N
|
Vijay V. Kale |
| Place : New Delhi |
Partner |
| Date : May 29, 2023 |
Membership No. 080821 |
|
UDIN : 23080821BGUWRM3575 |
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
The Annexure referred to in our Independent Auditors Report to the members of
Switching Technologies Gunther Limited ("the Company") on the financial
statements for the year ended March 31, 2023, we report that: (i) (a) (A) The Company has
maintained proper records showing full particulars, including quantitative details and
situation of Property, Plant and Equipments. (B) The Company has maintained proper records
showing full particulars of intangible assets (b) As per the information and explanation
given to us, no physical verification of fixed assets has been carried out by the Company
during the year ended March 31, 2023. (c) The Company does not own any immovable
properties and accordingly, the provision of Paragraph 3(i)(c) of the Order are not
applicable to the Company. (d) The Company has not revalued its Property, Plant and
Equipment or intangible assets during the period and accordingly, the provision of
Paragraph 3(i)(d) are not applicable to the Company. (e) As per the information and
explanations given to us, no proceedings have been initiated and / or pending against the
Company under the Benami Transactions (Prohibition) Act, 1988 and the rules made
thereunder and accordingly, the provision of Paragraph 3(i)(e) are not applicable to the
Company. (ii) (@) As per the information and explanations given to us, physical
verification of inventory has been conducted at reasonable intervals by the management. As
per the information received, there was no deviation beyond 10% in aggregate in each class
of inventory. We have relied on the management certificate on closing balance of
inventory. (b) The Company has not availed any working capital limits on the security of
current assets from banks or financial institutions and accordingly, the provisions of
Paragraph 3(ii)(b) of the Order are not applicable to the Company. (iii) As informed to
us, the Company has not granted any loans, secured or unsecured to companies, firms,
Limited Liability Partnerships or other parties covered in the register maintained under
section 189 of the Companies Act, 2013 (‘the Act) and therefore, the provisions of
Paragraph 3(iii)(a) to Paragraph 3(iii)(f)of the Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the
Company has not granted loans / made any investments / issued any guarantees for which
provisions of section 185 and 186 of the Act are to be complied with. Accordingly, the
provisions of Paragraph 3(iv) of the Order are not applicable to the Company. wv) The
Company has not accepted deposits during the year and does not have any unclaimed deposits
as at March 31, 2023 and accordingly, the provisions of Paragraph 3(v) of the Order are
not applicable to the Company. (vi) To the best of our knowledge and according to the
explanation given to us, the Central Government has not prescribed the maintenance of cost
records under section 148(1) of the Companies Act, for goods manufactured / traded by the
Company. Accordingly, the provision of Paragraph 3(vi) of the Order is not applicable to
the Company. (vii) (a)According to the information and explanation given to us and on the
basis of our examination of the records of the Company, amounts deducted/accrued in the
books of account in respect of undisputed statutory dues including provident fund,
employees state insurance, income tax, sales tax, service tax, duty of customs, duty of
excise, value added tax, GST, cess and other material statutory dues have been regularly
deposited during the period by the Company with appropriate authorities. According to the
information and explanations given to us, in our opinion, no undisputed amounts payable in
respect of statutory dues including Provident Fund, Employees State Insurance, Service
Tax, Custom Duty, Cess and other statutory dues applicable to it as on March 31, 2023 for
a period of more than six months from the date they became payable. However, the company
has during the year recorded expense amounting to \ 32.60 Lakhs and \ 49.28 Lakhs by way
of recharge from its group company towards security service & Professional fee
expenses respectively incurred by the latter on which the company has not deducted any TDS
as per the Income Tax Act, 1961. Further, the Company has not paid GST on reverse charge
basis for the above service. The management is of the opinion that since these charges are
in the nature of pure reimbursement and also considering that the unit is an SEZ Unit, ,
TDS and GST obligations do not arise. We are informed that the operations of the Company
do not give rise to any liability for Value Added Tax, Central Sales Tax, Wealth Tax and
Excise Duty. (b) According to the records of the Company, there are no dues outstanding of
Income Tax, Service Tax, Goods & Services Tax, Custom Duty and Cess which have not
been deposited on account of any dispute. (viii) According to the information and
explanations given to us there are Nil transactions which have been disclosed as income
under the Income Tax Act, 1961 which were previously unrecorded in the books.
(ix) (a) According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not availed any borrowings from
lenders and accordingly, the provision of Paragraph 3(ix)(a) of the Order is not
applicable to the Company. (b) According to the information and explanations given to us,
the Company is not declared willful defaulter by any bank or financial institution or
other lender. (c) According to the information and explanations given to us, no term loans
were generated by the Company during the period and accordingly, the provision of
Paragraph 3(ix)(c) of the Order is not applicable to the Company. (d) According to the
information and explanations given to us and based on our examination of the records of
the Company, the Company has not taken any loans on account of or to meet the obligation
of associate companies during the period and accordingly, the provision of Paragraph
3(ix)(d) of the Order is not applicable to the Company. It is clarified that the Company
does not have any joint venture / subsidiary / associate of its own and that it only has
an associate company having common parent entity another Company during the year (e)
According to the information and explanations given to us and based on our examination of
the records of the Company, the Company has not taken any loan on pledge of any securities
held in associates and accordingly, the provision of Paragraph 3(ix)(e) & Paragraph
3(ix)(f) of the Order are not applicable to the Company. It is clarified that the Company
does not have any joint venture / subsidiary / associate of its own and that it only has
an associate company having common parent entity another Company during the year. (x) (a)
The Company has not raised any moneys by way of initial public offer or further offer
(including debt instruments) during the period and accordingly, the provision of Paragraph
3(x)(a) of the Order is not applicable to the Company. (b) The Company has not raised any
moneys by way of by private placement / preferential issue during the year and that the
moneys raised during the year and accordingly, the provision of Paragraph 3(x)(b) of the
Order is not applicable to the Company. (xi) (a) Based upon the audit procedures performed
and according to the information and explanations given by the management, we report that
no fraud on or by the Company has been noticed or reported during the course of our audit.
(b) No report has been filed by the auditors under sub-section (12) of section 143 of the
Companies Act with the Central Government during the period.
(c) No whistle blower complaints were reported during the period.
(xi) In our opinion and according to the information and explanations given to us, the
Company is not a Nidhi company. Accordingly, paragraph 3(xii)(a) to paragraph 3(xii)(c) of
the Order is not applicable. (xii) 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 accounting standards. (xiv)(a) According to the information and
explanations give to us and based on our examination of the records of the Company, we are
of the opinion that the Company does not have an internal audit system commensurate with
the size and nature of its business. (b) During the course of our audit, the reports of
internal auditors have been furnished to us by the Company and we have considered the
same. (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, paragraph 3(xv) of
the Order is not applicable. (xvi) The Company is not an NBFC and hence the provisions of
paragraph 3(xvi) of the Order is not applicable. (xvii) According to the information and
explanations given to us and based on our examination of the records of the Company, the
Company has incurred cash loss of \ 1,011.99/- Lakhs (excluding exceptional item) during
the year ending March 31, 2023 &X 656.91 lakhs during year ended March, 31 2022. The
computation of cash loss for year ending March 31, 2023 and March 31, 2022 is given below:
| Particulars |
FY 2022-23 |
FY 2021-22 |
| Profit/(Loss) before tax |
1,133.62 |
(-) 665.49 |
| Add: Depreciation & Amortization Expenses |
6.44 |
8.58 |
| Less: Exceptional Income representing write backs |
(-) 2,152.05 |
Nil |
| Less : Taxes (paid)/ Refund as per Cashflow Statement |
Nil |
Nil |
| Cash Profit/(Loss) |
(-) 1,011.99 |
(-) 656.91 |
(xviii) There has been a resignation of the Statutory Auditors during the period. We
have not been informed of any issues, objections or concemns by the outgoing Auditors.
(xix) On the basis of the financial ratios, ageing and expected dates of realisation of
financial assets and payment of financial liabilities, other information accompanying the
financial statements, we are of the opinion that material uncertainty exists as on the
date of the audit report and that company is incapable of meeting its liabilities existing
at the date of balance sheet as and when they fall due within a period of one year from
the balance sheet date. (xx) The provisions regarding Corporate Social Responsibility are
not applicable on the Company since the profits are below the applicability threshold.
Accordingly, the provisions of Paragraph 3(xx)(a) and Paragraph 3(xx)(b) of the Order are
not applicable on the Company. (xxi) The Company is a Standalone entity and does not have
Subsidiaries, associates and joint ventures and accordingly, the Provisions of Paragraph
3(xxi) of the Order are not applicable on the Company.
For and on behalf of VV Kale & Co Chartered Accountants Firm Reg. Number: 000897N
|
Vijay V. Kale |
| Place : New Delhi |
Partner |
| Date : May 29, 2023 |
Membership No. 080821 |
|
UDIN : 23080821BGUWRM3575 |
ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT
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 Switching Technologies Gunther Limited
("the Company") as of March 31, 2023 in conjunction with our audit of the
financial statements of the Company for the year ended March 31, 2023. 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 (‘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
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.
Meaning of Internal 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 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 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 generally operating effectively as at March 31, 2023, 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 VV Kale & Co Chartered Accountants Firm Reg. Number: 000897N
|
Vijay V. Kale |
| Place : New Delhi |
Partner |
| Date : May 29, 2023 |
Membership No. 080821 |
|
UDIN : 23080821BGUWRM3575 |
+91-9892691696
