We have audited the accompanying financial statements of Orbit
Corporation Limited (the 'Company'), which comprise the Balance Sheet
as at 31st March, 2015, the Statement of Profit and Loss and the Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The management 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 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 referred
to in Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility 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 fnancial 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 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 Company's 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 Company's
internal financial control system over financial reporting in place and
the operating effectiveness of such controls. 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 aforesaid financial statements give the
information required by the Companies Act, 2013, 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 31st March, 2015;
(b) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) in case of the Cash Flow Statement, of the cash flows for the year
ended on that date.
Emphasis of matter
We draw attention to Note 26(2(a)) to the financial statements as
regards the income tax demands received by the Company for the
assessment years 2004-05 to 2012-13 amounting to Rs. 1884.41 millions.
The Company has filed appeals against these demands and the matter is
sub-judice.
Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 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 Companies Act, 2013, we report
that:
(a) we have sought and obtained all 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 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 in agreement with the
books of account;
(d) in our opinion, the Statement of Profit and Loss, the Balance Sheet
and the Cash Flow Statement comply with the accounting standards
referred to in Section 133 of the Companies Act, 2013, read with Rule 7
of the Companies (Accounts) Rules,2014; and
(e) on the basis of the written representations received from directors
of the Company as on 31st March, 2015 and taken on record by the Board
of Directors, we report that none of the directors is disqualified as
on 31st March, 2015, from being appointed as a director in terms of
Section 164(2) of the Companies Act, 2013,
(f) 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 disclosed the impact of pending litigations on its
financial position in its financial statements-Refer note no. 26 and 32
to its financial statements
2) There are no foreseeable losses on long term contracts or derivative
contracts for which a provision needs to be made by the company.
3) There are no amounts which need to be transferred to the Investor
Education and Protection Fund by the company.
(Referred to in paragraph 1 of our report of even date)
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fxed
assets.
(b) As explained to us, these fixed assets have been physically
verified by the management in accordance with a phased program of
verification which in our opinion is reasonable, having regard to the
size of the Company and nature of its assets. The frequency of physical
verification is reasonable and no material discrepancies were noticed
on such verification.
(ii) (a) As explained to us, the inventories have been physically
verified by technically qualified independent agencies during the year.
In our opinion, the frequency of such verification is reasonable.
(b) As per the information given to us, the procedures of physical
verification of inventory followed by the management are, in our
opinion, reasonable and adequate in relation to the size of the Company
and the nature of its business.
(c) The Company is maintaining proper records of inventory. No material
discrepancies were noticed on such verification.
(iii) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured, to companies
covered in the register maintained under Section 189 of the Companies
Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, the internal control system for the purchase of inventory
and fixed assets and for the sale of goods and services needs to be
strengthened to make it commensurate with the size of the company and
the nature of its business. Further, we have neither come across nor
have been informed of any continuing failure to correct major
weaknesses in internal control system.
(v) The Company has not accepted any deposits during the year from the
public to which the directives issued by the Reserve Bank of India and
the provisions of Sections 73-76 and any other relevant provisions of
the Companies Act 2013, and the rules framed thereunder apply.
(vi) We have broadly reviewed the books of account and records
maintained by the company pursuant to the Rules made by the Central
Government for the maintenance of cost records under Section 148 (1) of
the Companies Act 2013. We have however, not made a detailed inspection
of these records to ascertain their completeness or accuracy.
(vii) (a) According to the information and explanations given to us,
income tax deducted at source amounting to Rs 125.14 millions, VAT on
flat booking amounting to Rs 23.93 millions and tax on dividend
amounting to Rs 18.49 millions were in arrears as at 31st March, 2015
for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there no dues in respect of
income tax, VAT, wealth tax, service tax and cess as at 31st March,
2015 which has not been deposited With the appropriate authorities on
account of a dispute except as given bloe;
Nature of the Amount Period to
which the Forum where
disputes
Name of
the statute disputed dues (Rs.in
millions) amount
relates pending
Income Tax
Act,1961 Income Tax and
interest 1760.10 2004-05 to
2010-11 ITAT
Income Tax
Act,1961 Income tax and
interest 164.40 2011-12 to
2012-13 CIT(Appeals)
(c) According to the information and explanations given to us, there is
no amount required to be transferred to the investor education and
protection fund.
(viii) The Company does not have accumulated losses as at 31st March,
2015 and it has incurred cash losses in the financial year and in the
immediately preceding financial year.
(ix) According to the information and explanations given to us and as
per the records of the Company examined by us, the Company has
defaulted in the redemption of non convertible debentures and repayment
of term loans to financial institutions and banks and payment of
interest thereon. Details are as under:
1250.00 1 day to 15 months
Non convertible debenture 933.19 1 day to more than
18 months
764.30 7months to more
than 18 months
Term loan from banks
571.97 1 day to more
than 18 months
941.40 More than 18 months
Term loan from financial
institutions 451.56 1 day to more than
18 months
1201.67 7 months to more
than 18 months
Other body corporates
660.72 1 day to more
than 18 months
(x) According to the information and explanations given to us, the
terms and conditions of guarantee given by the company for loans taken
by others from banks or financial institutions are not prima facie
prejudicial to the interests of the company.
(xi) In our opinion and according to the information and explanation
given to us, the term loans have been applied for the purposes for
which they were obtained.
(xii) During the course of our examination of the books and records of
the Company, carried out in accordance with generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any fraud on or by the Company
noticed or reported during the year, nor have we been informed of such
case by management.
SHARP & TANNAN
Chartered Accountants
Firm's Registration No.109982W
By the hand of
MILIND P. PHADKE
Partner
Mumbai,30 May 2015 Membership No. 033013 |