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Godawari Power & Ispat Ltd.

BSE: 532734 Sector: Metals & Mining
NSE: GPIL ISIN Code: INE177H01013
BSE LIVE 15:40 | 18 Oct 135.20 5.00
(3.84%)
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136.70

HIGH

136.70

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133.25

NSE 15:31 | 18 Oct 134.10 3.75
(2.88%)
OPEN

134.50

HIGH

136.85

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132.50

OPEN 136.70
PREVIOUS CLOSE 130.20
VOLUME 43867
52-Week high 138.10
52-Week low 54.00
P/E
Mkt Cap.(Rs cr) 476
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 136.70
CLOSE 130.20
VOLUME 43867
52-Week high 138.10
52-Week low 54.00
P/E
Mkt Cap.(Rs cr) 476
Buy Price 0.00
Buy Qty 0.00
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 Financial Statements

We have audited the accompanying standalone financial statements of Godawari Power& Ispat Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2016 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.

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 the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial 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

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 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 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 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 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 financial statements.

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

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

(i) in the case of the Balance Sheet of the state of affairs of the Company as at 31March 2016;

(ii) in the case of the Statement of Profit and Loss of the loss for the year ended onthat date; and

(iii) in the case of the Cash Flow Statement of the cash flows for the year ended onthat date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

Note no. 34 which describes the uncertainty related to investments in Joint VentureCompany where the allotted coal block has also been cancelled. No impairment loss has beenbooked in anticipation that the realizable value of the assets of the JV shall be morethan the value of investment of the company. Impact is presently not ascertainable and assuch cannot be commented upon by us.

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 we give in the Annexure - B a statement on the matters specified in paragraphs 3and 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 purposes of our audit;

b. in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

c. the Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby 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 the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 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 - A.

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 financialpositions in its financial statements - Refer Note no. 27 of the financial statements.

(ii) In our opinion and according to the explanation given to us the Company has notentered into any longterm contracts including derivative contracts for which there wereany 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.

For OPSinghania & Co.

(ICAI Firm Regn.No.002172C)

Chartered Accountants

Sanjay Singhania

Partner

Membership No.076961

Raipur 28th May 2016

ANNEXURE - A

Re: Godawari Power & Ispat Limited

Referred to in para 2(f) of Report on Other Legal and Regulatory Requirements of ourreport of even date

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

We have audited the internal financial controls over financial reporting of GodawariPower & Ispat Limited ("the Company") as of March 312016 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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 of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 judgement 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 March 31 2016 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 OPSinghania & Co.

(ICAI Firm Regn.No.002172C)

Chartered Accountants

Sanjay Singhania

Partner

Membership No.076961

Raipur 28th May 2016

ANNEXURE - B

Re: Godawari Power & Ispat Limited

Referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of ourreport of even date

(i) (a) The Company has maintained proper records showing full

particulars including quantitative 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 11 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 two companies 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 in respect of the loans and investment made andguarantees and security provided by it. The Company has not granted any loans and made anyinvestments or provided any guarantees or security to the parties covered under Section185 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 year the company is generally regular in depositing undisputed statutorydues including provident fund employees' state insurance income tax sales tax servicetax duty of customs duty of excise value added tax cess and any other statutory dueswith the appropriate authorities. Further no undisputed amounts of statutory dues asstated above were in arrears as at 31st March 2016 for a period of more than six monthsfrom 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 the Statute Nature of dues Period Amount (Rs In lacs.) Forum where dispute is pending
Central Excise Act1944 Duty on Iron Ore Fines & Coal Fines 2008-09 to 2009-10 83.32 Customs Excise and Service Tax Appellate Tribunal New Delhi
Central Excise Act1944 Disallowance of Duty on Structural items 2008-09 to 2009-10 129.43 Customs Excise and Service Tax Appellate Tribunal New Delhi
Central Excise Act1944 Demand on account of Cenvat credit 2007-08 11.12 Customs Excise and Service Tax Appellate Tribunal New Delhi
Central Excise Act1944 Demand of Duty on account of Related Party transaction 2007-08 to 2008-09 63.81 Customs Excise and Service Tax Appellate Tribunal New Delhi
Central Excise Act1944 Demand of Duty on account of Related Party transaction 2006-07 to 2007-08 47.72 Customs Excise and Service Tax Appellate Tribunal New Delhi
Central Excise Act1944 Demand of Excise duty on clearance of Billets alleged to have manufactured from Sponge Iron alleged to have clandestinely removed by other company. 2012-13 28.12 The Commissioner (Appeals) Central Excise Customs & Service Tax Raipur
Central Excise Act1944 Disallowance of Service tax credit on Security Services 2010-11 to 2011-12 7.6 The Commissioner (Appeals) Central Excise Customs & Service Tax Raipur
Central Excise Act1944 Disallowance of Service tax credit availed on Rent-a- Cab and Outdoor catering Services 2009-10 to 2013-14 8.87 The Commissioner (Appeals) Central Excise Customs & Service Tax Raipur
Central Excise Act1944 Disallowance of Service tax credit on Carbon Advisory Services 2014-15 0.79 The Commissioner (Appeals) Central Excise Customs & Service Tax Raipur
Central Excise Act1944 Disallowance of Cenvat credit on Authorized Service Station Service. 2011-12 to 2012-13 2.45 The Commissioner (Appeals) Central Excise Customs & Service Tax Raipur
Central Excise Act1944 Disallowance of Cenvat credit on Welding Electrodes 2013-14 1.24 The Commissioner (Appeals) Central Excise Customs & Service Tax Raipur
Central Excise Act1944 Disallowance of Service tax credit on Carbon Advisory Services 2009-10 to 2013-14 4.72 The Commissioner (Appeals) Central Excise Customs & Service Tax Raipur
Central Sales Tax Non receipt of sales tax declaration form 2010-11 3.05 Addl. Commissioner (Appl) Commercial Taxes 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
Income Tax Act 1961 Penalty in respect of erstwhile Hira Industries Limited A.Y.

2008-09

0.10 Commissioner of Income Tax (Appeals) Raipur
C.G. Commercial Tax Commercial Tax 2002-03 1.46 Deputy Commissioner (Appl) Commercial Taxes Raipur
Central Sales Tax Tax demand during extension of sales tax exemption not allowed 2007-08 14.07 Addl. Commissioner (Appl) Commercial Taxes Raipur
C.G. Commercial Tax Tax demand during extension of sales tax exemption not allowed 2007-08 334.38 Addl. Commissioner (Appl) Commercial Taxes Raipur
C.G. Commercial Tax Tax demand during extension of sales tax exemption not allowed 2006-07 65.58 Addl. Commissioner (Appl) Commercial Taxes Raipur
Chhatisgarh Upkar Adhiniyam 1981 Energy Development Cess May 2006 to Feb 2014 3279.08 Supreme Court

(viii) Based on our audit procedures and according to the information and explanationsgiven to us the company has not defaulted in repayment of loans or borrowings to anyfinancial institution or bank or Government or debenture holders as at the balance sheetdate.

(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) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforethe provisions of clause 3(xiv) of the Companies (Auditor's Report) Order 2016 are notapplicable to the company.

(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 OPSinghania & Co.

(ICAI Firm Regn.No.002172C)

Chartered Accountants

Sanjay Singhania

Partner

Membership No.076961

Raipur 28th May 2016