To the Members of
GNA AXLES LIMITED
Report on the Financial Statements
We have audited the accompanying Standalone financial statements of GNA AXLESLIMITED ("The Company") which comprise the Balance Sheet as at 31st March2017 the
Statement of Profit and Loss Cash FlowStatementforthe sufficient and appropriate toyear then ended and a summary of significant policies and other explanatory information.
Managements Responsibility for the Standalone Financial Statements
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 Standalone financial statements that give a true and fair view of the financialposition financial performance and its Cash cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the the accounting recordsrelevant to the preparation and presentation of the financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.
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 financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Companys Directors aswell as evaluating the overall presentation of the financial statements. We believe thatthe audit evidence we have obtained is a basis for our audit opinion on the Standalonefinancial statements accounting
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 Flow for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") as amended issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the "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 completeness of and explanationswhich to the best 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 by theCompany so far as it appears from our examination of those books;
c. the Balance Sheet the Statement of Profit Loss and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account
d. 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) Rules 2014.
e. On the basis of written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 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 B".
g. With respect to the other matters 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 explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Notes to financial statements point no. 27
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation 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 maintain by the Company.
For G.S. Syal & Co.
Chartered Accountants (FRN 000457N)
M. No. 080075
Place : Jalandhar
Dated : 5th May 2017
"ANNEXURE "A" TO THE INDEPENDENT AUDITORS
Referred to in paragraph 1 under the heading Report on Other Legal &Regulatory Requirement of our report of even date to the financial statements of theCompany for the year ended 31st March 2017:
1) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
(b) The Fixed Assets have been physically verified by the management at reasonableintervals in accordance with regular programme of verification. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.
(c) The title deeds of immovable properties are held in the name of the Company.
2) (a) The management has conducted the physical verification of inventory atreasonable intervals. (b) The discrepancies noticed on physical verification of theinventory as compared to books records which has been properly dealt with in the books ofaccount were not material.
3) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained undersection 189 of the Act. Accordingly the provisions of clause 3 (iii) (a) to (C) of theOrder are not applicable to the Company and hence not commented upon.
4) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and I86 of the Companies Act 2013In respect of loans investments guarantees and security.
5) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
6) As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the Company.
7) (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Valueadded Tax Cess and any other statutory dues with the appropriate authorities. Accordingto the information and explanations given to us no undisputed amounts payable in respectof the above were in arrears as at 31st March 2017 for a period of more than six monthsfrom the date on when they become payable.
b) According to the information and explanation given to us there are no material duesof duty of customs which have not been deposited with the appropriate authorities onaccount of any dispute. However according to information and explanations given to usthe following dues of income tax sales tax duty of excise service tax and value addedtax have not been deposited by the Company on account of disputes;
Nature of the Statute Nature of the Dues Amount (Rs.) Period to which the Forum wheredispute is amount relates pending
Punjab Sales Tax Act Demand P-VAT 5467036/- 2009-2010 DETC Appeals Punjab Sales Tax ActDemand P-VAT 13906308/- 2008-2009 DETC Punjab Sales Tax Act Demand P-VAT (Crane) 180000/-2004-2005 DETC Appeals Excise & Service Tax Act Service Tax outward 523288/- 2008-2009Before Commissioner Appeal freight Excise & Service Tax Act Service Tax outward215324/- 2009-10 Before Commissioner Appeal freight Excise & Service Tax Act ServiceTax outward 912302/- 2010-11 Before Commissioner Appeal freight Excise & Service taxact Cenvat credit on 250216/- 2011-12 Before commissioner appeal tractor parts Excise& service tax act Service tax on others 233605/- 2011-12 Before commissioner appealExcise & Service Tax Act Service Tax on others 122261/- 2012-13 Before CommissionerAppeal Excise & Service Tax Act Service Tax on others 477159/- 2012-13 BeforeCommissioner Appeal Excise & Service Tax Act Service Tax on others 567775/- 2013-14Before Commissioner Appeal Excise & Service Tax Act Service Tax on others 43494/-2013-14 Before Commissioner Appeal Excise & Service Tax Act Service Tax on others446637/- 2013-14 Before Commissioner Appeal Excise & Service Tax Act Service Tax onothers/ 689322/- 2014-15 Before Commissioner Appeal Guest House Excise & Service TaxAct Service Tax on Club 322847/- 2013-14 Asstt. Commissioner SE Membership/Misc. Excise& Service Tax Act Service Tax on 454935/- 2014-15 Before Asstt. Commissioner InsuranceIncome Tax Income Tax Regular 13504810/- 2012-13 Before Commissioner of AssessmentIncome-tax (Appeals) Excise & Service Tax Act Excise Duty CENVAT 3420284 2016-17Asstt. Commissioner
8) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings from a financialinstitutions banks.
9) Based upon the audit procedures performed and the information and explanations givenby the management the Company has raised monies by way of initial public offer in natureof equity shares and applied for the purpose for which those were raised thoughidle/surplus funds which were not required for immediate utilisation have been gainfullyinvested in demand deposits with bank. 10) Based upon the audit procedures performed andthe information and explanations given by the management we report that no fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year. 11) Based upon the audit procedures performed and the information andexplanations given by the management the managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act; 12) In our opinion the Company is not aNidhi Company.
Therefore the provisions of clause 4 (xii) of the Order are not applicable to theCompany.
13) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
14) Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon. 15) Based upon the audit procedures performedand the information and explanations given by the management the Company has not enteredinto any non-cash transactions with directors or persons connected with him and theprovisions of section 192 of Companies Act 2013 have been complied with. 16) In ouropinion the Company is not required to be registered under section 45 IA of the ReserveBank of India Act 1934 and accordingly the provisions of clause 3 (xvi) of the Order arenot applicable to the Company and hence not commented upon.
For G.S. Syal & Co.
Chartered Accountants (FRN 000457N)
Proprietor M. No. 080075
Place : Jalandhar
Dated : 5th May 2017
"ANNEXURE B" TO THE INDEPENDENT AUDITORS REPORT of even date on theStandalone Financial Statements of GNA Axles Limited Report on thesufficient andappropriate toInternal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of GNA AxlesLimited ("the Company") as of March 31 2017 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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 include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys 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 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 auditors 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 provide a basis for our auditopinion on the Companys internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A Companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompanys 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.
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 based on the Internal Controlover financial reporting criteria established by the company considering the essentialcomponents of the Internal Control stated in the Guidance Note on audit of Internalfinancial controls over financial reporting issued by the Institute of CharteredAccountants of India..
For G.S. Syal & Co.
Chartered Accountants (FRN 000457N)
Proprietor M. No. 080075
Place Jalandhar :
Dated : 5th May 2017