TO THE MEMBERS OF TOYAMA ELECTRIC LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of Toyama Electric Limited
(“the Company”), which comprise the Balance Sheet as at 31 March 2016 and 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.
Management’s Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters stated in
sub-section (5) of Section 134 of the Companies Act, 2013 (“the Act”) with
respect to the preparation and presentation 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 principles generally accepted in India,
including the Accounting Standards specified under Section 133 of the Act, read with Rule
7 of the Companies (Accounts) Rules, 2014. 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 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.
Auditor’s Responsibility
Our responsibility is to express an opinion on these 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 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 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 financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal financial control relevant to the Company’s
preparation of the 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 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 financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations
given to us, 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, of the state of affairs of the Company as at 31
March 2016 and its Loss and its cash flows for the year ended on that date.
Emphasis of Matter
We draw your attention to foot note No. 37 under notes to standalone Financial
Statements regarding Confirmation of balances to be received from parties (Impact on
Company’s profit/reserves not ascertainable).
Our opinion is not qualified in these above matters.
Report on Other Legal and Regulatory Requirements
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
inthe paragraphs 3 and 4 of the Order.
As required by sub-section (3) of Section 143 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, the Statement of Profit and Loss and the Cash Flow Statement
dealt with by this Report are inagreement 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, read with Rule 7 of the Companies
(Accounts) Rules, 2014;
e) on the basis of the written representations received from the Directors as on 31
March 2016 taken on record by the Board of Directors, none of the Directors are
disqualified as on 31 March 2016 from being appointed as a Directorin terms of sub-section
(2) of Section 164 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 the Annexure B; and
g) with respect to the other matters to be included in the Auditor’s 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:
1. the Company has confirmed that there is no pending litigation against the Company
bearing any financial implication;
2. the Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses; and
3. the Company is yet to transfer Rs 1,03,237/- unpaid dividend of financial year
2007-08 declared at the AGM held on 10th September, 2008 to the Investor
Education and Protection Fund by the Company during the year ended 31 March 2016.
For K.S.Aiyar & CO
Chartered Accountants
ICAI Firm’s Registration number 100186W
Ramamohan R Hegde
Partner /
Membership No: 23206 Place: Bangalore Date: 30/05/2016
ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT - 31 MARCH 2016
With reference to the Annexure A referred to in the Independent Auditor’s Report
to the members of the Company on the financial statements for the year ended 31 March
2016, we report the following:
(i) (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 by
which the fixed assets are verified by the management according to a phased programme
designed to cover all the items over a period of three years. In our opinion, this
periodicity of physical verification is reasonable having regard to the size of the
Company and the nature of its assets. In accordance with the policy, the Company has
physically verified certain fixed assets during the year and we are informed that no
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 as
disclosed in Note 10 to the financial statements are held in the name of the Company
except for one residential apartment at Thanisandra, Bangalore.
(ii) The inventory, other than stocks lying with third parties, has been physically
verified by the management during the year. In our opinion, the frequency of such
verification is reasonable. In respect of stocks lying with third parties at the year-end,
written confirmations have been obtained. The discrepancies noticed on verification
between the physical stocks and the book records were not material and have been dealt
with in books of account. •
(iii) According to the information and explanations given 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’). Accordingly, paragraphs 3 (iii).(a), (b) and (c) of
the Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanation given to us, and
based on the legal opinion obtained by the Company, the Company has not granted any loans,
or provided any guarantees or security to the parties covered under Section 185 of the
Act. The Company has complied with the provisions of Section 186 of the Act in respect of
the loans given and investments made.
(v) In our opinion, and according to the information and explanations given to us, the
Company has not accepted deposits as per the directives issued by the Reserve Bank of
India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act
and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not
applicable to the Company.
(vi) The Central Government has not prescribed the maintenance of cost records under
Section 148(1) of the Act for any of the products manufactured/services rendered by the
Company.
(vii) (a) According to the information and explanations 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, cess and other material statutory dues have been generally regularly
deposited during the year with the appropriate authorities.
(b) According to the information and explanations given to us, no undisputed amounts
payable in. respect of Provident Fund, Employees’ State Insurance, Income- tax,
Sales-tax, Service tax, duty of customs, duty of excise, value added’tax, cess and
other material statutory dues were in arrears as at 31 March 2016 for a period of more
than six months from the date they became payable.
(c) According to the information and explanations given to us, there are no dues of
Income-tax, Sales tax, Service tax, Duty of customs, Duty of excise and Value added tax as
at 31 March 2016, which have not been deposited with the appropriate authorities on
account of any dispute.
(viii) In our opinion and according to the information and explanations given to us,
the Company has not defaulted in repayment of dues to the government. The Company, did not
have any outstanding dues to its bankers, financial institutions and debenture holders
during the year. .
(ix) According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not raised any moneys by way of
initial public offer or further public offer (including debt" instruments) and has
not obtained any term loans during the year. Accordingly, paragraph 3(ix) of the Order is
not applicable to the Company.
(x) During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing practices in India, and
according to the information and explanations given to us, we have neither come across any
instance of material fraud by the Company or on the Company by its officers or employees,
noticed or reported during the year, nor have we been informed of any such case by the
Management.
(xi) In our opinion and according to the information and explanations given to us, the
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 Act.
(xii) In our opinion and according to the information and explanations given to us, the
Company is not a Nidhi company and the Nidhi Rules, 2014 are not applicable to it.
Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.
(xiii) In our opinion and according to the information and explanations given to us,
the Company has entered into transactions with related parties in compliance with the
provisions of Sections 177 and 188 of the Act where applicable and the details of such
related party transactions have been disclosed in the financial statements as required by
Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(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. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.
(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 any non-cash
transactions with directors or persons connected with them. Accordingly, paragraph 3(xv)
of the Order is not applicable to the Company.
(xvi) In our opinion and according to the information and explanations given to us, the
Company is not required to be registered under Section 45-LA of the Reserve Bank of India
Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.
For K.S.Aiyar & CO
Chartered Accountants
ICAI Firm’s. Registration number-100186W
Ramamohan R Hegde
Partner
Membership No: 23206
Place: Bangalore
Date: 30/05/2016
ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT - 31 MARCH 2016
Report on the Intemal.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 the Company
as of 31 March 2016 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 (TCAF). 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 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.
Auditor’s 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 Act, 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 ICAI 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’ 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 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 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 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
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 2016, 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 ICAI.
For K.S.Aiyar & CO
Chartered Accountants
ICAI Firm’s Registration number-100186W
Ramamohan R Hegde
Partner
Membership No: 23206
Place: Bangalore
Date: 30/05/2016
+91-9892691696
