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GHCL Ltd.

BSE: 500171 Sector: Industrials
NSE: GHCL ISIN Code: INE539A01019
BSE LIVE 13:01 | 23 Oct 252.10 -8.90
(-3.41%)
OPEN

264.00

HIGH

265.90

LOW

249.00

NSE 12:51 | 23 Oct 252.80 -8.25
(-3.16%)
OPEN

264.50

HIGH

266.50

LOW

249.10

OPEN 264.00
PREVIOUS CLOSE 261.00
VOLUME 301709
52-Week high 298.80
52-Week low 203.65
P/E 5.50
Mkt Cap.(Rs cr) 2,442
Buy Price 251.75
Buy Qty 277.00
Sell Price 252.05
Sell Qty 200.00
OPEN 264.00
CLOSE 261.00
VOLUME 301709
52-Week high 298.80
52-Week low 203.65
P/E 5.50
Mkt Cap.(Rs cr) 2,442
Buy Price 251.75
Buy Qty 277.00
Sell Price 252.05
Sell Qty 200.00

GHCL Ltd. (GHCL) - Auditors Report

Company auditors report

To the Members of GHCL Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of GHCL Limited("the Company") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss including the statement of Other Comprehensive Income theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the 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 Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act. read with Rule 7 of the Companies (Accounts) Rules 2014 and theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe

Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial control that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the Ind AS financial statements that give a trueand 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 financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the standalone Ind AS financial statements in accordance with the Standardson Auditing issued by the Institute of Chartered Accountants of India as 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 financial statements are free from material misstatement. An audit involves performingprocedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the standalone Ind AS financialstatements whether due to fraud or error. In making financial control relevant to theCompany's preparation of the standalone Ind AS financial statements that give a true andfair in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS financial statements. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone IndAS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the standalone Ind AS financial statements give the information required bythe 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 March 31 2017 its profit including other comprehensive income its cash flows andthe changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure 1 a statement on the matters specified inparagraphs 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 thebest 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 bythe Company so far as it appears from our examination of those books;

(c) The Balance Sheet Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financial statements complywith the Accounting Standards specified under section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014 Companies (Indian Accounting Standards) Rules 2015as amended;

(e) On the basis of written representations received from the directors as on March31 2017 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2017 from being appointed as a director in terms of section164 (2) of the Act;

(f) 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 2" to this report;

(g) With respect to the other matters to be included in the Auditor's 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 explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements Refer Note 35(c) to the standaloneInd AS financial statements;

ii. The Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and ProtectionFund by the Company;

iv. The Company has provided requisite disclosures in Note 44 to thesestandalone Ind AS financial statements as to the holding of Specified Bank Notes onNovember 8 2016andDecember302016aswellasdealingsinSpecifiedBank Notes during the periodfrom November 8 2016 to December 30 2016. Based on our audit procedures and relying onthe management representation regarding the holding and nature of cash transactionsincludingSpecifiedBank Notes we report that these disclosures are in accordance with thebooks of accounts maintained by the Company and as produced to us by the Management.

Other Matter

The comparative financial information of the Company for the year ended March 31 2016and the transition date opening balance sheet as at April 01 2015 included in thesestandaloneIndASfinancialstatements are based on the previously issued statutory financialstatements prepared in accordance with the Companies (Accounting Standards) Rules 2006audited by one of the predecessor joint auditor and continuing joint auditor whose reportfor the year ended March 31 2016 and March 31 2015 dated May 19 2016 and May 22 2015respectively expressed an opinion on those standalone financial statements as adjustedfor the differences in the accounting principles adopted by the Company on transition tothe Ind AS which have been audited by us.

For S.R. BATLIBOI & CO LLP For Rahul Gautam Divan & Associates
ICAI Firm registration number: 301003E/E300005 ICAI Firm registration number: 120294W
Chartered Accountants Chartered Accountants
per Atul Seksaria per Rahul Divan
Partner Partner
Membership No.: 086370 Membership No.: 100733
Place: New Delhi Place: New Delhi
Date : May 20 2017 Date : May 20 2017

Annexure ‘1' referred to in paragraph under the heading "Report on otherlegal and regulatory requirements" of our report of even date

Re: GHCL Limited ("the Company")

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the Company.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification. Inventories lying with third parties have beenconfirmed by them as at March 31 2017 and no material discrepancies were noticed inrespect of such confirmations (iii) (a) The Company has granted loan to one subsidiarycovered in the register maintained under section 189 of the Companies Act 2013. In ouropinion and according to the information and explanations given to us the terms andconditions of the grant of such loan is not prejudicial to the company's interest.

(b) The Company has granted loan to one subsidiary covered in the registermaintained under section 189 of the Companies Act 2013. The schedule of repayment ofprincipal and payment of interest has been stipulated for the loans granted and therepayment/receipts are regular.

(c) There arenoamountsofloansgrantedtocompaniesfirmsor other parties listed in theregister maintained under section 189 of the Companies Act 2013 which are overdue formore than ninety days.

(iv) In our opinion and according to the information and explanations given to usprovisions of Section 185 and 186 of the Companies Act 2013 in respect of loan given to asubsidiary company and guarantee given on behalf of a subsidiary company have beencomplied with by the Company. There are no investments made and securities given inrespect of which provisions of Section 185 and 186 of the Companies Act 2013 areapplicable.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable. (vi) We havebroadly reviewed the books of account maintained by the Company pursuant to the rules madeby the Central Government for the maintenance of cost records under section 148(1) of theCompanies Act 2013 related to the manufacture of soda ash and textile products and areof the opinion that prima facie the specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of custom duty of excise value added tax cessand other statutory dues applicable to it.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax sales-taxservice tax duty of custom duty of excise value added tax cess and other materialstatutory dues were outstanding at the year end for a period of more than six monthsfrom the date they became payable.

(c) According to the records of the Company the dues outstanding of incometax duty of excise duty of custom sales tax ESI and employees' state insurance onaccount of any dispute is as follows:

Name of the Statute Nature of Dues Amount (Rs.) in Crores Period to which Forum where dispute is pending
Income Tax Act 1961 Write off of loans of Subsidiaries Corporate Guarantee Foreign Sales Commission Interest on loan to Subsidiaries & Service Income of Subsidiaries Foreign Sales Commission Interest on loan to Subsidiaries 11.06 F.Y. 2010-2011 F.Y. 2011-12 ITAT Ahmedabad
5.46 F.Y. 2011-2012 F.Y. 2012-13 CIT ( Appeal) Ahmedabad
0.03 2001-2002 High Court Chennai
4.50 2008-09 to 2011-12 High Court Gujarat
0.54 2008-09 Customs Excise and Service tax Appellate Tribunal
Central Excise Act1944 CENVAT credit 2.23 2010-11 to 2015-16 Commissioner (Appeals)
8.63 2004-2005 2008- Dy. Commissioner Junagadh
09 2009-10 & Commissioner Bhavnagar
CENVAT credit & Non Payment of Service Tax changes in classification of duty rate 61.73 2005-06 2007-08 to 2015-16 Customs Excise and Service tax Appellate Tribunal
Customs Act1962 Changes in classification of custom duty rate 7.16 2012-13 2014-15 Customs Excise and Service tax Appellate Tribunal
The Employee's 0.03 1998-2002 ESI Court Madurai
State Insurance Act 1948 Contribution Demand
0.01 1985-1986 Supreme Court
Gujarat Sales Tax Act 1969 Disallowance Of Set Off Of Sales Tax 0.02 2002-2003 VAT Tribunal Ahmedabad

According to the information and explanations given to us there are no dues ofprovident fund sales-tax service tax value added tax and cess which have not beendeposited on account of any dispute.

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to afinancialinstitution bank or government . The Company did not have any outstandingdebentures during the year.

(ix) In our opinion and according to the information and explanations given by themanagement the Company has utilized the monies raised by way of term loans for thepurposes for which they were obtained. The Company has not raised any money way yearofinitialpublicoffer/further public offer/ debt instruments during the .

(x) Based upon the audit procedures performed for thepurposeofreportingthetrueandfairviewofthefinancialstatements and according to theinformation and explanations given by the management we report that no fraud by theCompany or no material fraud on the Company by the officers and employees of the Companyhas been noticed or reported during the year. (xi) According to the information andexplanations given by the management the managerial remuneration has been paid / providedin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon. (xv) According to the information and explanationsgiven by the management the Company has not entered into any non-cash transactions withdirectors or persons connected with him as referred to in section 192 of Companies Act2013.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S.R. BATLIBOI & CO LLP For Rahul Gautam Divan & Associates
ICAI Firm registration number: 301003E/E300005 ICAI Firm registration number: 120294W
Chartered Accountants Chartered Accountants
per Atul Seksaria per Rahul Divan
Partner Partner
Membership No.: 086370 Membership No.: 100733
Place: New Delhi Place: New Delhi
Date : May 20 2017 Date : May 20 2017

ANNEXURE-2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF GHCL LIMITED

Report on the Internal Financial Controls under Clause

(i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of GHCLLimited ("the Company") as of March 31 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 control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance ofadequateinternalfinancialcontrols that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the CompaniesAct 2013.

Auditor's Responsibility

Our responsibilityistoexpress financialreporting based on our audit.opinion financialcontrolsover theCompany'sinternal

We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting (the "Guidance Note") and theStandards on Auditing as specified under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance aboutwhetheradequateinternalfinancialcontrols over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the internal financial controls system over financialreporting.

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 theinternal financialreporting to futureperiods are subject to the risk that the internal financial controlsover control overfinancial reporting may become inadequate because of changes in conditions or that thedegree 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 operating effectively as at Marchoverfinancial suchinternalfinancial 31 2017 based on the internal control established bythe Company considering the essential components of internal control stated in theoverfinancial Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

For S.R. BATLIBOI & CO LLP For Rahul Gautam Divan & Associates
ICAI Firm registration number: 301003E/E300005 ICAI Firm registration number: 120294W
Chartered Accountants Chartered Accountants
per Atul Seksaria per Rahul Divan
Partner Partner
Membership No.: 086370 Membership No.: 100733
Place: New Delhi Place: New Delhi
Date : May 20 2017 Date : May 20 2017