| We have audited the accompanying financial statements of REIL
Electricals India Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash
Flow Statement for the year ended and a summary 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 a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub section (3C) of section 211
of Companies Act, 1956. This responsibility includes the design,
implementation and maintenance of internal controls 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 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 auditor's judgement, 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 controls relevant to the Company's preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. 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 audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements, together with the
Accounting Policies and Notes to Accounts, 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, 2014;
(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 (Auditor's Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 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 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;
c. 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;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956;
e. On the basis of written representations received from the
directors, as on March 31,2014 and taken on record by the Board of
Directors, none of the directors are disqualified as on that date from
being appointed as a director in terms of clause (g) of sub-section (1)
of Section 274 of the Act;.
Annexure to Auditors' Report
Referred to in Paragraph 2 of our report of even date
1. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets, which
require to be updated.
b. As explained to us, the fixed assets have been physically verified
by the management at reasonable intervals and no material discrepancies
between the books/record and the physical inventory were noticed on
such verification.
c. In our opinion and according to the information and explanations
given to us, the Company has not disposed off substantial part of fixed
assets during the year and the going concern status of the Company is
not affected.
2. In respect of its inventories:
a. As explained to us, inventories have been physically verified by
the management at reasonable intervals during the year.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. According to the information and explanations given to us, the
Company has maintained proper records of inventories. As explained to
us, there were no material discrepancies noticed on physical
verification of inventory as compared to book record.
3. According to the information and explanations given to us, the
Company neither took nor granted any loans, secured or unsecured, from
or to companies, firms or other parties listed in the Register
maintained under Section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for the purchase of inventory, fixed assets and also for the
sale of goods.
5. In our opinion and according to the information and explanations
given to us, there are no transactions in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956, aggregating during the year to
Rs.5,00,000/-(Rupees Five lakhs only) or more in respect of any party.
6. The Company has not accepted any deposits from the public.
7. The Company has an Internal Audit system. In our opinion, the scope
and coverage is commensurate with its size and nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records.
9. In respect of Statutory Dues:
(a) The Company during the year is regular in depositing provident fund
dues and Employees State Insurance dues with appropriate authorities.
In respect of Income Tax, Sales Tax, Wealth Tax, Custom Duty and Excise
Duty, there are no undisputed amounts outstanding as at March 31, 2014,
for a period of more than six months from the date they became payable.
(b) According to the information and explanations give to us, the
disputed statutory dues that have not been deposited on account of
disputed matters pending before the appropriate authorities are Rs.
108.00 lakhs on account of Central Excise demands pending before High
Court of Tamil Nadu.
10. As per the accounts referred to in this Report, neither the
net-worth of the Company has been eroded nor the Company incurred cash
losses during the financial year under Report nor in the preceding
financial year.
11. The Company has not defaulted in repayment of its dues to any
financial institutions or banks
12. In our opinion and according to the information and explanations
given to us, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
securities.
13. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, clause-4 (xiii) of the Companies
(Auditors' Report) Order, 2003, is not applicable to the Company.
14. The Company has not dealt in or traded in shares, securities,
debentures and other investments.
15. The Company has not given guarantees for loans taken by others
from banks or financial institutions.
16. The Company has not raised any term loans during the year.
17. In our opinion, the short-term loans raised by the Company during
the year have not been applied for long term investment.
18. During the year, the Company has not made any preferential
allotment of shares to parties and companies covered in the Register
maintained under Section 301 of the Companies Act, 1956.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by way of public issue during
the year.
21. In our opinion and according to the information and explanations
given to us, no fraud on or by the Company has been noticed or reported
during the year, that causes the financial statements to be materially
misstated.
For VENUGOPAL & CHENOY,
Chartered Accountants
FRN No. 004671S
(P.V. SRI HARI)
Place: Hyderabad Partner
Date: 30-05-2014 Membership No. 21961 | 