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Opto Circuits India Ltd.

BSE: 532391 | NSE: OPTOCIRCUI | Series: NA | ISIN: INE808B01016 | SECTOR: Hospitals & Medical Services

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2.85 0.00 (0.00%)
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178,385
10-Day
157,733
30-Day
233,229
152,542
  • Prev. Close

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  • Open Price

    2.85

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    2.85 (65000)

Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Auditor's Report

REPORT ON THE STANDALONE Ind AS FINANCIAL STATEMENTS

We have audited the accompanying standalone Ind AS Financial Statements of Opto Circuits (India) Ltd (“the Company”), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including other comprehensive income), the statement of changes in equity, 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 STANDALONE Ind AS 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 of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, the statement of 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 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 standalone Ind AS financial statements based on our audit.

In conducting 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 of the standalone Ind AS financial statements 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 Standalone Ind AS Financial Statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS 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 Standalone Ind AS 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 Standalone Ind AS 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

We draw your attention:

a) Regarding the trade receivables amounting to Rs.23,079.90 Lakhs (includes dues Rs.21,871.88 Lakhs more than 36 months), Trade Payables amounting to Rs.5,055.30 Lakhs (Overseas payables Rs.2,123.83 Lakhs more than 36 months), there are no confirmation of balances available supporting the outstanding receivables and payables. Although receivables of Rs.21,871.88 Lakhs and payables of Rs.2,123.83 Lakhs over 36 months, the provisioning/write off of such debts and write back of liabilities could not be ascertained.

b) The Company holds investment in its Subsidiary Opto Cardiac Care Limited amounting to Rs.20,005.50 Lakhs and advances amounting to Rs.55,157.34 Lakhs and has not been able to ascertain the impairment loss of investments and advances in this subsidiary which has reported a consolidated negative net worth of Rs.3,531.35 Lakhs as against the carrying amount of Rs.75,162.84 Lakhs.

c) The company has the following short term borrowings from the banks as on the date of balance sheet:

Name of the bank

Facility

Amount (in Rs. Lakhs)

Bank of Nova Scotia Ltd

Working Capital

11,890.92

HDFC bank ltd

Working Capital/ Term Loan

5,817.60

State Bank of India

Working Capital

16,253.78

Yes Bank Ltd

Working Capital

3,043.47

TOTAL

37,005.77

(i) Banks have classified these liabilities as NPA/Irregular Advances and as such not charging the interest accordingly finance cost/interest is not provided for

(ii) The Bank of Nova Scotia Ltd and HDFC Bank Ltd have issued winding up notices dated 03/06/2014, and 24/11/2014 respectively for recovery of the above said outstanding dues and the bankers have filed winding up petition in the Hon’ble High Court of Karnataka against the company, for which no provision of interest is made in the financial statements as these Banks have categorized the respective borrowings as NPA. Management is negotiating for One Time Settlement (OTS)/Compromise Settlement from State Bank of India, Bank of Nova Scotia Ltd and HDFC Bank Ltd.

(iii) State bank of India has issued Notice under SARFAESI ACT, on factory building and current assets of the company. State Bank of India has taken symbolic possession of the property at 83, Electronic City, Phase-1, Hosur Road, Bangalore and has put up notice for auctioning of the property, the management is negotiating for One Time Settlement (OTS)/Compromise settlement.

d) Opto Circuits (India) Ltd has given advance of Rs.1,642.25 Lakhs and investment of Rs.524.61 Lakhs to its subsidiary, Advanced Micronic Devices Ltd ( holding 59% of shareholding). The subsidiary has stopped its business operation since July 2015 reported a negative net worth of Rs.4,688.15 Lakhs. In this situation it is difficult to realize these amount and company has not made necessary provision in this regard for the Impairment Loss.

e) In view of the Ind AS 36 Impairment of Assets, the management of the company has to demonstrate how the Intangible Asset will generate the probable future economic benefits, also has to allocate the resources to complete, use and obtain the benefit from the Intangible Asset. As the company’s Management has not allocated any resource allocations/commitments during the year and in the absence of providing the report containing the future economic benefits, we are unable to comment on the carrying value of Rs.15,710.43 /- Lakhs of such Intangible asset.

QUALIFIED OPINION

Subject to the above qualifications, 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 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 31st March 2018;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date;

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date; and

(d) in the case of the Statement of Changes in Equity, changes for the year ended on that date

EMPHASIS OF MATTER

1. Company along with its step down subsidiary (Cardiac Science Corporation) had borrowed funds from DBS Bank Ltd. In the year 2014-15 the said loan was restructured and as part of the said process Rs.12678.41 Lakhs borrowed by the company was also restructured. As per the terms of the agreement with DBS Bank ltd , upon default by step down subsidiary ( Cardiac Science Corporation) the bank exercised their rights and assigned the debts to a third party and also exercised proxy voting rights to take management control of the company . As a result of this the loan borrowed by the company to the tune of Rs.12678.41 Lakhs stands extinguished. DBS Bank has objected to the stand taken by the Company.

The Company has raised objections to the stand taken by DBS Bank and filed a original suit before the jurisdictional Civil Court. The suit is pending before courts

The Company also made a claim of USD 160.82 Million against DBS Bank Ltd vide its letter dated 24th January, 2017 and this claim is part of the above petition filed before the Hon’ble Court and DRT-Bangalore recovery proceedings. Since matter is sub-judice , we cannot express our opinion on the above claims and its impact on financial liability.

2. With respect to debt with Standard Chartered Bank Ltd the company has made and agreed for negotiated settlement with the Standard Chartered Bank for Rs.6,200 Lakhs as against outstanding liability of Rs.21,521.78 Lakhs. The differential amount of Rs.15,321.78 Lakhs has been treated as contingent liability until the final settlement of agreed amount.

Our opinion is not modified in respect of the above said matters.

REPORT ON OTHER LEGAL REGULATORY REQUIREMENT

1. As required by the companies (Auditors Report) Order 2016 (“the order”) issued by the Central Government of in terms of section 143(11) of the Act we give in Annexure A statement on the matters specified in the paragraph 3 and 4 of the order to the extent applicable.

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 purposes of our audit.

b) In our opinion, except for the indeterminate effects of the matters described in the Basis for qualified Opinion paragraph, 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 including other comprehensive income, the changes in equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, except for the indeterminate effects of the matters described in the Basis for qualified Opinion paragraph, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and companies (Indian Accounting Standards) amendment Rules, 2016.

e) On the basis of the written representations received from the directors as on 31 March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2018 from being appointed as a director in terms of Section 164 (2) 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 Annexure B. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the company’s internal financial controls over financial reporting.

g) 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:

i. The Company has disclosed the impact of pending litigations as at 31 March 2018 on its financial position in its standalone financial statements - Refer Note No.15B No.31.

ii. The Company is not required to make provision as at 31 March 2018, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts since the Company did not have any derivative contracts as at 31 March 2018.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2018.

Report on Companies (Auditor’s Report) Order, 2016’, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act of Opto Circuits (India) Ltd(The Company)

The Annexure Referred to in Independent Auditors’ Report to the members of the Company on the Standalone Financial Statements for the year ended 31 March 2018, we report that:

i. In respect of the company’s Property plant & equipment

a. The Company is maintaining proper records showing full particulars, including quantitative details and situation, of Property plant & equipment.

b. According to the information and explanations given to us and the records examined by us and based on the examination of the conveyance deed provided to us we report that, the title deeds, comprising all the immovable properties of Land & Building which are free hold, are held in the name of the Company as at the Balance sheet date.

ii. Subject to point (b) under basis for qualification, the physical verification of inventory has been conducted at periodical intervals by the Management but not effectively conducted during the year. As certified by the management the discrepancies noticed on physical verification of inventory as compared to book records were not material. However, we recommend the Management to conduct the physical verification of inventories on quarterly basis and maintain proper records commensurate to the nature and size of the business.

iii.

a. Subject to the qualification in the audit report and as per the explanations given to us, the Company has granted unsecured loans to the parties listed in the register maintained under Section 189 of the Companies Act.

b. In respect of the aforesaid the company has given loans and advances to its subsidiaries aggregating to Rs.75090.62 Lakhs for which no interest is collected from the loans granted to its subsidiaries during the year.

c. In respect of aforesaid loans, there is no stipulation has been made for the recovery of the loans. Hence, we’re not in a position to make any specific comments on this.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it.

v. The company has not accepted deposits during the year and doesn’t have any unclaimed deposits as at March 31, 2018 and therefore the provisions of the clause 3(v) of the order are not applicable to the company.

vi. Reporting under clause 3(vi) of the order is not applicable as the company’s business activities are not covered by the companies (cost records and audit) rule, 2014.

vii.

a. According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund, employees’ state insurance, professional tax, duty of customs, sales tax, Goods and Service Tax though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including service tax, as applicable, with the appropriate authorities. According to the information and explanations given to us there were no statutory dues payable for more than six months.

b. According to the information and explanations given to us there is no amount payable in respect of wealth tax, service tax, sales tax, customs duty, excise duty and Goods and Service Tax which have not been deposited on account of any disputes.

However according to information and explanation given to us the following dues of income tax have not been deposited by the company on the account of dispute.

Name of the statute

Name of dues

Amount (in Rs.Crores)

Period to which it relates

Forum where dispute is pending

Income Tax Act

Demand Raised by IT U/S 154

6.36

A Y2007-08

CIT (Appeals)

Income Tax Act

Minimum Alternative Tax

3.65

A Y2011-12

CIT (Appeals)

Income Tax Act

Minimum Alternative Tax

1.00

A Y2012-13

CIT (Appeals)

Income Tax Act

Minimum Alternative Tax

66.62

A Y2013-14

CIT (Appeals)

Income Tax Act

Dividend Tax

17.57

A Y 2010-11

High Court writ appeal

Income Tax Act

Dividend Tax

18.00

A Y 2011-12

High Court writ appeal

Income Tax Act

Dividend Tax

13.80

A Y2012-13

High Court writ appeal

viii. According to the records of the Company examined by us and the information and explanations given to us, except for short term borrowings for working capital as below, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.

Name of the bank

Facility

Amount (in Rs. Lakhs)

Bank of Nova Scotia Ltd

Working Capital

11,890.92

HDFC bank Ltd

Working Capital/ Term Loan

5,817.60

State Bank of India

Working Capital

16,253.78

Yes Bank Ltd

Working Capital

3,043.47

TOTAL

37,005.77

ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans during the year under review. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. To the best of our knowledge and according to the information and explanations given to us, no fraud by the company and no material fraud on the company by its officers or employees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us, the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. In our opinion and according to the information’s and explanations given to us, and based on our examination of the records of the Company transaction with the related parties are in compliance with the provisions of Sections 177 and 188 of the Act where applicable, and details of such transactions have been disclosed in the Ind AS Financial Statements as required under Accounting Standard.

xiv. The company has made preferential allotment of fully paid equity shares and the same is in accordance with the provisions of Companies Act, 2013.

xv. In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any noncash transactions with its directors or persons connected to its directors and hence provision of the section 192 of the act are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly Clause 3(xvi) of the order are not applicable to the company.

We have audited the internal financial controls over financial reporting of Opto Circuits (India) Ltd (“the Company”), as of 31st March 2018 in conjunction with our audit of the Standalone Ind AS 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 controls over financial reporting criteria established by the Company considering the essential components of internal controls 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 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 (“the Act”).

AUDITORS’ 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. 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 controls based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS 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 control system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company’s internal financial controls 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 controls 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 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 controls 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 control system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note.

For B. V. SWAMI & CO.

Chartered Accountants

A.AMARANATH

Partner

Membership Number: 213629

Firm Registration Number: 009151S

Place: Bengaluru

Date: 30th April, 2018