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Gati Ltd.

BSE: 532345 Sector: Services
NSE: GATI ISIN Code: INE152B01027
BSE LIVE 19:47 | 19 Oct 114.90 -0.85
(-0.73%)
OPEN

116.00

HIGH

116.65

LOW

114.30

NSE 19:46 | 19 Oct 115.05 -0.55
(-0.48%)
OPEN

116.45

HIGH

116.45

LOW

114.55

OPEN 116.00
PREVIOUS CLOSE 115.75
VOLUME 33258
52-Week high 149.35
52-Week low 101.60
P/E 28.94
Mkt Cap.(Rs cr) 1,244
Buy Price 114.90
Buy Qty 5900.00
Sell Price 0.00
Sell Qty 0.00
OPEN 116.00
CLOSE 115.75
VOLUME 33258
52-Week high 149.35
52-Week low 101.60
P/E 28.94
Mkt Cap.(Rs cr) 1,244
Buy Price 114.90
Buy Qty 5900.00
Sell Price 0.00
Sell Qty 0.00

Gati Ltd. (GATI) - Auditors Report

Company auditors report

To

The Members of Gati Limited

Report on Standalone Financial Statements

We have audited the accompanying standalone financial statements of Gati Limited("the Company") which comprise the Balance sheet as at 31st March 2017 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information for the yearended on that date in which are incorporated the returns for the year ended on that dateaudited by the branch auditor of the Company's branch in Nepal.

Management's Responsibility for the Standalone Financial Statements

The Company's 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theAccounting Principles generally accepted in India including Accounting Standardsspecified under section 133 of the Act read with rule 7 of the Companies (Accounts)Rules 2014 (as amended). This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act; for safeguarding theassets of the Company; preventing and detecting frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

1. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

2. 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 the Rules made there under.

3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statement.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 and its Profit and its Cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following notes.

1. Note 28 of the financial statements regarding the scheme of arrangement foramalgamation (the Scheme) sanctioned by the Hon'ble Andhra Pradesh High Court by its orderdated March 19 2013. The Scheme permits the company to create a capital reserve to becalled special reserve to which shall be credited excess of value of assets over value ofliabilities on amalgamation amounting to H555.54 Crores to be utilised to adjust therefrom any capital losses arising from transfer of assets and certain other losses asspecified in the Scheme and as the Board of Directors may deem fit. Accordingly thediminution in value of Investments and irrecoverable loans & advances and duesaggregating to H28.77 Crores required to be debited to the statement of Profit and Losshave been adjusted against Special Reserve which is not in accordance with AccountingStandard (AS) 5 ‘Net profit or loss for the period prior period items and Changes inAccounting Policies' and Accounting Standard (AS) 13 ‘Accounting for Investments'.This has resulted in the profit for the year before tax and profit after tax for the yearbeing higher by H28.77 Crores.

2. Note 31 of the financial statements regarding certain loans and advances to a 100%subsidiary amounting to H19.00 crores in respect of which the management is confident ofits recovery.

3. Note 32 of the financial statements regarding non provision for diminution in thevalue of Investments of H39.92 crores in the share capital of subsidiary Gati Kausar IndiaLimited as in the opinion of management no provision is necessary considering the expectedimprovement in performance of the subsidiary in near future.

Our opinion is not qualified in respect of these matters.

Report on Other legal and Regulatory Requirements

1. 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 ofthe Act(hereinafter referred to as the "order") and on the basis of suchchecks of the books and records of the company as we considered appropriate and accordingto the information and explanations given to us we give in Annexure "A" astatement on the matters specified in paragraphs 3 and 4 of the Order.

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 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 and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus;

c) The report on the accounts of the branch office of the Company audited under section143(8) of the Act by the branch auditors have been sent to us and have been properly dealtwith by us in preparing this report;

d) The standalone financial statements dealt with by this Report are in agreement withthe books of account and with returns received from the branch not visited by us;

e) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards Specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rule 2014(as amended); f) On the basis of the writtenrepresentations received from the directors as on 31st March 2017 and taken on record bythe Board of Directors none of the directors is disqualified as on 31st March 2017 frombeing appointed as a director in terms of section 164(2) of the Act.

g) With respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in Annexure "B".

h) With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us :

i) As detailed in Note 33 37 and 38(a)(3) of the notes to the standalone financialstatements the Company has disclosed the impact of pending litigation on its financialstatements.

ii) The Company did not have any long terms contract including derivative Contracts forwhich there were any material foreseeable losses.

iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv) The Company has provided requisite disclosures in its standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to 30th December 2016 and these are in accordance with the booksof accounts maintained by the company. Refer to Note 39 to the standalone financialstatements.

For R.S. Agarwala & Co.
Chartered Accountants
Firm Regn No:-304045E
(R .S. Agarwala)
Camp:- Hyderabad Partner
Date: May 6 2017 Membership No.005534

ANNExURE "A" TO

INDEPENDENT AUDITORS' REPORT

of even date to the members of Gati Limited on the standalone Financial Statements forthe year ended 31st March 2017.

Referred to in paragraph 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date.

1. a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets like land building vehicles plantand equipments computers etc.

b) We are informed that a test of physical verification of these assets was carried outby the management during the year and no material discrepancies were noticed. Themanagement has informed us that in respect of other fixed assets like furniture andfittings office equipment having regard to their numbers and the numerous locationswhere these exist maintenance of detailed records and reconciliation of their value ingeneral ledger is not feasible.

c) The titles deeds of immovable properties as disclosed in the financial statementsare held in the name of the Company except in respect of immovable property situated atNasik.

2. a) The management has conducted physical verification of inventory at reasonableintervals during the year.

b) The procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

c) The Company is maintaining proper records of inventory and no material discrepanciesbetween physical inventory and book records were notice on physical verification.

3. The Company has granted unsecured loans and advances to bodies corporate covered inthe register maintained under section 189 of the Act.

a) In our opinion the rate of interest and other terms and conditions on which theloans had been granted to the bodies corporate listed in the register maintained undersection 189 of the Act were not prima facie prejudicial to the interest of the Company.

b) In the case of the loans granted to the bodies corporate listed in the registermaintained under section 189 of the Act the borrowers have been regular in the principaland interest as stipulated.

c) There are no overdue amounts in respect of the loans granted.

4. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Act with respectto loans and investments made.

5. In our opinion the Company has complied with the directives issued by the ReserveBank of India and the provisions of Sections 73 to 76 and other relevant provisions of theAct and the Companies (Acceptance of Deposits) Rules 2014 (as amended) as applicablewith regard to the deposits accepted. According to the information and explanations givento us no order has been passed by the Company Law Board or National Company Law Tribunalor Reserve Bank of India or any Court or any other Tribunal in this regard.

6. The Central Government has not prescribed maintenance of cost records undersub-section (1) of section 148 of the Act in respect of any activities of the Company.

7. (a) According to the information and explanation given to us and records of theCompany examined by us in our opinion the Company is regular in depositing undisputedstatutory dues including provident fund employees' state insurance income tax servicetax custom duty excise duty value added tax cess and any other statutory dues asapplicable with the appropriate authorities.

(b) According to the information and explanation given to us the dues outstanding inrespect of income tax sales tax service tax customs duty excise duty value added taxand cess on the account of any dispute are as follows;

Nature of Dues Amount (In Crores) Forum where dispute is pending
Service Tax 4.18 Central Excise and Service Tax Appellate Tribunal

8. According to the records of the company examined by us and the information andexplanations given to us the company has not defaulted in repayment of loans orborrowings to any financial institutions or bank or Government during the year. Thecompany has not issued any debentures.

9. The company has not raised any moneys by way of initial public offer further publicoffer (including debt instruments) and term loans. Therefore the provisions of Clause3(ix) of the said order are not applicable to the company.

10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such cases by themanagement during the course of our audit.

11. The company has paid /provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of section 197 read with schedule V to theAct.

12. The company is not a Nidhi Company.

13. The transactions with related parties are in compliance with the provisions ofSection 177 and 188 of the Act. The details of the related party transactions have beendisclosed in the financial statements as required by the applicable Accounting Standards.

14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Therefore theprovisions of Clause 3 (xiv) of the order are not applicable.

15. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Therefore the provisions of Clause 3 (xv) of the order arenot applicable.

16. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For R.S. Agarwala & Co.
Chartered Accountants
Firm Regn No:-304045E
(R .S. Agarwala)
Camp:- Hyderabad Partner
Date: May 6 2017 Membership No.005534

ANNEXURE "B" TO

INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 2(g) of the Independent Auditors' Report of even date to themembers of Gati Limited on the Standalone financial statements for the year ended 31stMarch 2017.

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the companies Act 2013.

We have audited the internal financial controls over financial reporting of GatiLimited ("the Company") as of 31st March 2017 in conjunction with our audit ofthe 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal controlsstated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For R.S. Agarwala & Co.
Chartered Accountants
Firm Regn No:-304045E
(R .S. Agarwala)
Camp:- Hyderabad Partner
Date: May 6 2017 Membership No.005534