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Godawari Power & Ispat Ltd.

BSE: 532734 Sector: Metals & Mining
NSE: GPIL ISIN Code: INE177H01013
BSE 15:29 | 21 Feb 496.15 23.60
(4.99%)
OPEN

471.90

HIGH

496.15

LOW

456.00

NSE 15:50 | 21 Feb 495.60 23.60
(5.00%)
OPEN

469.90

HIGH

495.60

LOW

456.15

OPEN 471.90
PREVIOUS CLOSE 472.55
VOLUME 37564
52-Week high 623.00
52-Week low 85.95
P/E 18.63
Mkt Cap.(Rs cr) 1,748
Buy Price 496.15
Buy Qty 10973.00
Sell Price 0.00
Sell Qty 0.00
OPEN 471.90
CLOSE 472.55
VOLUME 37564
52-Week high 623.00
52-Week low 85.95
P/E 18.63
Mkt Cap.(Rs cr) 1,748
Buy Price 496.15
Buy Qty 10973.00
Sell Price 0.00
Sell Qty 0.00

Godawari Power & Ispat Ltd. (GPIL) - Auditors Report

Company auditors report

To the Members of Godawari Power & Ispat Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of GodawariPower & Ispat Limited (‘the Company') which comprise the balance sheet as at 31March 2017 the statement of profit and loss (including other comprehensive income) thestatement of cash flows and the statement of changes in equity for the year then ended anda summary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone Ind AS financial statements").

Management's Responsibility for the Standalone Ind AS 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 the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act read with relevant rules issued thereunder.

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 accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement 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 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.

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 Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.

In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thefinancial position of the Company as at 31 March 2017 and its financial performanceincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

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 Section 143(11) of the Act we givein the Annexure A a statement on the matters specified in the paragraph 3 and 4 of theorder.

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 purposes 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 (including other comprehensiveincome) the statement of cash flows and the statement of changes in equity dealt with bythis Report are in agreement with the books of account;

(d) in our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with relevant ruleissued thereunder;

(e) on the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 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"; and

(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 30 to thestandalone Ind AS financial statements;

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; iii. there has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company; and

iv. the Company has provided requisite disclosures in its standalone Ind AS financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8 November 2016 to 30 December 2016 and these are in accordance with the books ofaccounts maintained by the Company. Refer Note 44 to the standalone Ind AS financialstatements.

For OP Singhania & Co.

(ICAI Firm Regn. No. 002172C) Chartered Accountants

Sanjay Singhania

Partner Membership number: 076961 Raipur 30th May 2017

ANNEXURE - A TO THE AUDITORS' REPORT

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone Ind AS financial statements for the year ended 31 March 2017 we reportthat:

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

(b) As explained to us all major assets except certain low value items viz furniture& fixtures and office equipment have been physically verified by the management atreasonable intervals. According to the information and explanation given to us nomaterial discrepancies were notice.

(c) The title deeds of immovable properties as disclosed in Note 4 on fixed assets tothe financial statements are held in the name of the Company except the immovableproperties transferred on amalgamation of the erstwhile RR Ispat Limited and HiraIndustries Limited held in their name.

(ii) As explained to us the physical verification of inventories have been conductedat reasonable intervals by the management during the year. In our opinion the frequencyof the verification is reasonable. The discrepancies noticed on verification between thephysical stocks and the book records were not material and have been properly dealt within the books of account.

(iii) The company has granted unsecured loan to one company covered in the registermaintained under Section 189 of the Companies Act 2013 during the year. According to theinformation and explanations given to us and based on the audit procedures conducted byus we are of the opinion that:

(a) The terms & conditions of the grant of such loan are not prejudicial to theinterest of the Company.

(b) As explained to us the principal amounts are repayable on demand whereas theinterest is payable annually at the discretion of the Company and the repayments orreceipts are regular.

(c) Since the amount outstanding is not overdue therefore the provisions of clause 3(iii)(c) of the Companies (Auditor's Report) Order 2016 are not applicable to thecompany.

(iv) In our opinion and according to the information & explanations given to usthe Company has compiled with the provisions of Section 186 of the Companies Act 2013 inrespect of the loans and investment made and guarantees and security provided by it. TheCompany has not granted any loans and made any investments or provided any guarantees orsecurity to the parties covered under Section 185 of the Companies Act 2013.

(v) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits from public in terms of the directives issued bythe Reserve Bank of India and the provisions of Section 73 to 76 or any other relevantprovisions of the Companies Act and rules framed thereunder; therefore the provisions ofclause 3(v) of the Companies (Auditor's Report) Order 2016 are not applicable to thecompany.

(vi) We have broadly reviewed the books of account maintained by the company pursuantto the rules made by the Central Government for the maintenance of cost records underSection 148(1) of the Companies Act 2013 in respect of Company's products to which thesaid rules are made applicable and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. We have however not made a detailedexamination of the records.

(vii) (a) According to the information & explanations given to us during the yearthe company is regular in depositing undisputed statutory dues including provident fundemployees' state insurance income tax sales tax service tax duty of customs duty ofexcise value added tax cess and any other statutory dues with the appropriateauthorities though there has been delay observed in some cases. Further no undisputedamounts of statutory dues as stated above were in arrears as at 31st March 2017 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax service tax custom duty excise duty value added tax and cesswhich have not been deposited on account of any dispute except the following:

Name of Statute Nature of Dues

Period

Amount

Forum where dispute is

(` in lacs)

pending
Central Excise Act 1944 Disallowance of Duty on Structural items GPIL 2008-09 to 31.00 2009-10 High Court of CG at
Bilaspur.
Central Excise Act 1944 Demand on account of Cenvat credit denial HIL 2007-08 7.78 CESTAT NEW DELHI
Service Tax Demand of Service tax on value of retention quantity of Iron ore fines HIL 2009-10 to 75.99 2010-11 CESTAT NEW DELHI
Service Tax Demand of Service Tax on recovery of Incidental charges HIL 2005-06 to 48.96 2006-07 CESTAT NEW DELHI
Service Tax Demand of Service Tax-Suppression of value-retention of Iron ore fines HIL 2011-12 57.30 CESTAT NEW DELHI
Customs Act 1962 Demand of Customs duty on imported Coal due to classified as Bituminous Coal GPIL 2012-13 10.00 CESTAT HYDERABAD
Central Excise Act 1944 Denial of Cenvat credit on security services employed outside factory. GPIL 2009-10 to 4.80 2013-14 CESTAT NEW DELHI
Customs Act 1962 Finalization of Project Import – Pellet Plant NA 33.64 CESTAT HYDERABAD
Service Tax Demand of ST on charges relating to ECB Loan availed - 2006-07 to 119.88 CESTAT BANGALORE
Penalty U/s 77& 78 2011-12
Central Excise Act 1944 Penalty u/s 76. CESTAT vide its Final Order No. A/53176/2017-SM(BR) dated 27.04.2017 remanded the matter to original adjudicating authority on deciding the quantum of penalty u/s 76. 2006-07 & 8.52 2008-09 CESTAT NEW DELHI
Central Excise Act 1944 Denial of Service Tax credit on air travel services copy right services architect service etc. July 2010 to 7.79 Dec. 2014 The Commissioner (Appeals) Raipur.
Central Excise Act Denial of benefit of captive consumption Note No. 67/95 Oct 2014 to 0.39 The Commissioner (Appeals)
on Oxygen Gas used for repair & maintenance. March 2015 Raipur
Central Excise Act 1944 Duty on Oxygen Gas. (April 2015 to 2.72 Sept 2015) The Commissioner (Appeals) Raipur
Service Tax Reversal of Service Tax Credit on Removal of Inputs (Butt Welding) as such. July 2015 to 0.08 March 2016 Commissioner (Appeals) Central Excise Customs & Service Tax Raipur.
Income Tax Act 1961 Income Tax demand in respect of disallowance made A.Y. 2012-13 390.86 Commissioner of Income Tax
(Appeals) Raipur
Income Tax Act 1961 Disallowance made in respect of erstwhile R.R. Ispat Limited A.Y. 2008-09 3.24 Commissioner of Income Tax (Appeals) Raipur
C.G. Commercial Tax Non receipt of sales tax declaration form 2011-12 16.56 Deputy Commissioner (Appl) Commercial Taxes Raipur
Chhatisgarh Upkar Adhiniyam 1981 Energy Development Cess May 2006 to 3279.08 Feb 2014 Supreme Court

(viii) Based on our audit procedures and according to the information and explanationsgiven to us during the year the company has defaulted in repayment of loans borrowingsand dues to debenture holders from June' 2016 to February' 2017. However the loanborrowings and debentures have been restructured/ rescheduled by the banks financialinstitution & debenture holders and as on the balance sheet date there was no defaultexist. (ix) The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments). According to the information and explanationsgiven to us and in our opinion the term loans have been applied progressively for thepurpose for which the loans were obtained.

(x) In our opinion and according to the information and explanations given to us nofraud by the Company or on the Company by its officers or employees has been noticed orreported during the year. Therefore the provisions of clause 3(x) of the Companies(Auditor's Report) Order 2016 are not applicable to the company.

(xi) The Company has provided for managerial remuneration during the year in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV of the Companies Act 2013.

(xii) As the Company is not a Nidhi Company and the Nidhi Rules 2014 are notapplicable to it. Therefore the provisions of clause 3(xii) of the Companies (Auditor'sReport) Order 2016 are not applicable to the company.

(xiii) The Company has entered into transactions with related parties in compliancewith the provisions of Section 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under AccountingStandard (AS) 18 Related Party Disclosures specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014.

(xiv) During the year the company has made preferential allotment i.e. privateplacement of shares with due compliance of Section 42 of the Act and relevant SEBIRegulations. The private placement of shares have been made in accordance with thefulfillment of requirement of restructuring of borrowings made by the bankers andfinancial institutions.

(xv) The Company has not entered into any non-cash transactions as referred in Section192 of the Act with its directors or persons connected with him. Therefore the provisionsof clause 3(xv) of the Companies (Auditor's Report) Order 2016 are not applicable to thecompany.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Therefore the provisions of clause 3(xvi) of the Companies(Auditor's Report) Order 2016 are not applicable to the company.

For OP Singhania & Co.

(ICAI Firm Regn. No.002172C) Chartered Accountants

Sanjay Singhania

Partner Membership number: 076961 Raipur 30th May 2017

We have audited the internal financial controls over financial reporting of GodawariPower & Ispat Limited ("the Company") as of 31 March 2017 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended 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 (‘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 Companies Act 2013.

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 standalone Ind AS financial statements whether due to fraudor 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 31 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 OP Singhania & Co.

(ICAI Firm Regn. No.002172C)

Chartered Accountants

Sanjay Singhania

Partner

Membership number: 076961

Raipur 30th May 2017