TO THE MEMBERS OF M/S GAJRA BEVEL GEARS LIMITED
Report on the Financial Statement
We have audited the accompanying financial statements of M/S Gajra Bevel GearsLimited (the company) which comprise the Balance Sheet as at 31st March2016 the statement of profit & loss cash Flow Statement for the year ended and asummary of significant accounting policies with other explanatory information.
Managements Responsibility for the Financial Statement
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013(" the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and Rules made there under. We conducted our audit in accordancewith the Standards on Auditing specified under section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and disclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement offinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Companys preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrol system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Companys Director as well asevaluating the overall presentation of the financial statements. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the financial statements.
The accumulated losses have eroded entire net worth of the Company and have made theCompany financially sick. Based on the Audited Balance Sheet as on 30.09.2008 a referenceu/s15 (1) of SIC (SP) Act 1985 was been filed by Company with the BIFR and the same wasbeen registered as case no. 27/2009 on 30.07.2009. The BIFR vide its order of hearing heldon 06.01.2010 declared the Company a SICK INDUSTRIAL COMPANY in terms of section 3(1)(o)of Sick Industrial Companies (Special Provisions) Act 1985 and appointed IDBI as theoperating agency (OA). As informed by the management there is no manufacturing/businessactivity in the Company after 31.10.2006. The management of the Company is making positiveefforts for rehabilitation of the Company and in course of that has already done the OTSof loan accounts of State Bank of India IFCI IDBI MPAVN and MPSIDC and the OTS withMadhya Pradesh Financial Corporation is under process. The Company has paid in full of OTSamount to SBI IDBI and IFCI last yearand has also made substantial payment to MPAVN andMPSIDC towards the OTS attention is also invited to Note 15.
Subject to above in our opinion and to the best of information and according to theexplanation given to us the aforesaid financial statements give the information requiredby the Act in the manner so required and give true and fair views in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2016 its loss and its cash flows for the year ended on thatdate.
Report on Other Legal and regulatory Requirement
As required by the Companies (Auditors Report) Order2016 ("the Order")issued by Central
Government of India in terms of sub-section (11) of section 143 of the Act we give inthe Annexure a statement on the matters specified in paragraph 3 and 4 of the said Order.
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 bestof 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 theCompany so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss Account and the Cash FlowStatement dealt with by this report are in agreement with the books of Accounts.
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of Act read with Rule 7 of the Companies (Accounts)Rules 2014.
(e) On the basis of written representations received from the directors as on March 31st2016 taken on record by the Board of Directors none of the directors is disqualified ason March 31st 2016 from being appointed as the directors in terms of section164(2) of the Act.
(f) With respect to the other matter to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanation given to us: (i) TheCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statements Refer Note 14. (ii) The Company did not have any long-term contractsincluding derivative contracts for which there were material foreseeable losses;(iii)There was no such amount required to be transferred to the Investor Education andProtection Fund by the Company hence the matter of delay does not arise.
O.T. Gandhi & Co.
Firm Registration Number: 001120C
Place: Indore Date: 30th May 2016
ANNEXURE TO THE AUDITORS REPORT
The Annexure referred to in our Independent Auditors Report to the members of theCompany for the year ended 31 March 2016 we report that:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. (b) The Company has a regularprogramme of physical verification of its assets. In accordance with this programmecertain fixed assets were physically verified during the year and no materialdiscrepancies were noticed on such verification. In our opinion the periodicity ofphysical verification is reasonable having regards to the size of Company and the natureof its assets. (c) According to the information and explanations given to us and on thebasis of our examination of the record of the Company the title deeds of immovableproperty are held in the name of the Company.
2. The inventory has been physically verified by the management at reasonable intervalsduring the year. The discrepancies noticed on verification between the physical stocks andbook records were not material.
3. According to the information and explanations given to us the Company has notgranted any loan secured or unsecured to companies firms or parties covered in theregister maintained under section 189 of the Act.
4. According to the information and explanation given to us the Company has notprovided any loans investments guarantees security in accordance of the provisions ofsection 185 and 186 of the Companies Act 2013.
5. In our opinion and according to information and explanation given to us the Companyhas not accepted any deposit from the public in accordance of section 73 to 76 or anyother relevant provision of the Companies Act 2013 during the year.
6. We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Govt. for the maintenance of cost records under sub-section(1) of section 148 of the Act. Having no manufacturing activities in the Company themaintenance of cost records is not applicable.
7. (a) Owing to the financial sickness in the operative years the Company has beenirregular in depositing with the appropriate authorities even the undisputed statutorydues like EPF contribution ESIC contribution Commercial Tax Income Tax and Excise Duty.However after the grant of installment facility the Company is regular in payment ofinstallments of Provident Fund dues and also positive about the payment of other duessubject to getting installment facility from the respective Authorities. The status ofunpaid dues as on 31.03.2016 is as under:-
|Nature of Dues ||Amount (Rs. In Lakhs) |
|Provident Fund Contribution (Net of Installment payments made) As per Demand note dated 03-03-2011 ||26.17 |
|E.S.I.C Contribution ||62.50 |
|Commercial Tax ||165.63 |
|Income Tax Demand ||149.11 |
|Excise Duty ||48.51 |
(b) Assessed demands of commercial tax against which the Company has preferred forRevision before the Competent Authority have not been accounted for as liability are asunder:
|Assessment Year ||Assessed demand (Rs. In Lakhs) |
|1999-2000 ||16.64 |
|2001-2002 ||27.72 |
|2002-2003 ||48.09 |
|2005-2006 ||267.81 |
|2006-2007 ||205.35 |
|TOTAL ||565.61 |
8. As per the records of the Company and based on our audit procedures during theyear the Company has not made any payment of dues to Madhya Pradesh Financial Corporationand Madhya Pradesh State Industrial Development Corporation (MPSIDC). The status of unpaidamount is as under:-
|Particular ||Amount (Rs. In Lakhs) |
|1. Madhya Pradesh Financial Institution ||890.77 |
|2. Madhya Pradesh State Industrial Development Corporation ||18.00 |
*The OTS of loans is pending.
9. According to the information and explanations given to us and based on ourexamination of the record of the Company the Company did not raise any money by way ofinitial public offer or further public offer (including debt instruments) and term loanduring the year.
10. Based on the audit procedure performed and the information and explanation given bythe management we report that no fraud on or by the Company has been noticed or reportedduring the course of our audit.
11. According to the information and explanations given to us and based on ourexamination of the record of the Company managerial remuneration was paid in accordancewith the requisite approvals mandated by the provisions of section 197 read with scheduleV of the Companies Act.
12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company.
13. According to the information and explanations given to us and based on ourexamination of the records of the Company The company was involved in related partytransaction as per sections 177 and 188 of the Companies Act 2013.
14. As per the records of the Company and based on our audit procedures during theyear the Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year.
15. According to the information and explanations given to us and based on ourexamination of the record of the Company the Company has not entered into any non cashtransactions with directors or persons connected with him.
16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For : O.T. Gandhi & Co.
Firm Registration Number: 001120C
Date: 30th May 2016