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Golden Tobacco Ltd.

BSE: 500151 Sector: Consumer
NSE: GOLDENTOBC ISIN Code: INE973A01010
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NSE 14:25 | 18 Oct 50.25 -0.30
(-0.59%)
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OPEN 50.25
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VOLUME 100
52-Week high 86.05
52-Week low 43.00
P/E
Mkt Cap.(Rs cr) 88
Buy Price 50.25
Buy Qty 50.00
Sell Price 52.85
Sell Qty 100.00
OPEN 50.25
CLOSE 50.55
VOLUME 100
52-Week high 86.05
52-Week low 43.00
P/E
Mkt Cap.(Rs cr) 88
Buy Price 50.25
Buy Qty 50.00
Sell Price 52.85
Sell Qty 100.00

Golden Tobacco Ltd. (GOLDENTOBC) - Auditors Report

Company auditors report

To

The Members of

GOLDEN TOBACCO LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Golden TobaccoLimited ("the Company") which comprise the Balance Sheet as at 31st March2017 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary of the 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)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding 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 accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

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 proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof 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 31stMarch 2017;

(ii) in the case of the Statement of Profit and Loss of the loss of the Company forthe year ended on that date and

(iii) in the case of the Cash Flow Statement of the cash flows of the Company for theyear ended on that date.

Emphasis of Matter:

Without qualifying we draw attention regarding appropriateness or otherwise of thepreparation of these standalone financial statements in view of the Company's net worthhad been entirely eroded. The Company has prepared these standalone financial statementson a going concern basis as the management is hopeful to turn around the Company'sbusiness performance especially in the realty business segment where one of the project'sconstruction activities has commenced and is expected to be completed in stipulated timeframe in due course. (Refer note no. 25.2 of the standalone financial statements for theyear ended March 31 2017).

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 A' 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 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 and the Cash Flow Statementdealt with 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) As required by Section 143 (3) of the Act with respect to the adequacy of theinternal financial controls over financial reporting of the Company and the operatingeffectiveness of such controls we give in ‘Annexure B' a separate report on thesame.

(f) On the basis of the 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.

(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) TheCompany has disclosed the impact of pending litigations on its financial position in thestandalone financial statements (Refer Note no. 25.1 (1.1) to the standalone financialstatements for the year ended March 31 2017); (ii) The Company did not have any long-termcontracts including derivative contracts for which there are any material foreseeablelosses.

(iii) There were no amounts which were required to be transferred to the investorEducation and Protection Fund by the Company during the year ended March 31 2017.

(iv) The Company has disclosed in the financial statements as to holding as well asdealings in Specified Bank Notes (SBN) during the period from 8th November 2016 to 30thDecember 2016 and these are in accordance with books of account maintained by the Company(Refer Note no. 13 of the standalone financial statements).

For LODHA & CO.
Chartered Accountants
Firm Registration No. 301051E
R. P. Baradiya
Partner
Membership No. 44101

 

Place : Mumbai
Date : May 29 2017

"Annexure A"

(Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" section of our report of even date)

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we state that:

1. a) The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

b) The Company has carried out physical verification of its fixed assets during theyear. In our opinion the frequency of verification is reasonable considering the size ofthe Company and the nature of its assets. No material discrepancies were noticed on suchverification except a Flat having Gross Book Value of ` 6644825 (Net BookValue: ` 3373283) as on March 31 2017 which as explained by the Management isin the wrongful possession of the family member of an ex- employee for a long time. TheCompany had already initiated legal proceedings against the said ex- employee and on hisdemise; the names of his family members were substituted. The Company is pursuinglitigation so that the flat can be vacated at the earliest. We are however unable tocomment as to when the said flat would be released to the Company and on the ultimaterealisability of the carrying value thereof.

c) Based on the verification and examination of records title deeds of the immovableproperties are in the name of the Company.

2. The inventories of the Company have been physically verified by the management atreasonable intervals during the year. No material discrepancies were noticed on suchphysical verification.

3. During the year the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnership or other parties covered in the registermaintained under section 189 of the Act. Therefore Para 3 (iii) of the Order is notapplicable to the Company.

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 respect tothe loans given and investments made and security provided.

5. No deposits within the meaning of directives issued by RBI (Reserve Bank of India)and Sections 73 to 76 or any other relevant provisions of the Act and rules framedthereunder have been accepted by the Company.

6. According to the information and explanations given to us the maintenance of costrecords has not been prescribed by the Central Government under Section 148 (1) of the Actfor any of the products manufactured by the Company.

7. (a) The Company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income tax sales-tax service taxduty of customs duty of excise value added tax cess and any other material statutorydues applicable to the Company with the appropriate authorities except delays upto 36 daysin payment of Excise Duty and amount involved ` 66800000 (being maximum amount). Noundisputed amounts payable in respect of the aforesaid statutory dues were outstanding asat the last day of the financial year for more than six months from the date they becamepayable except Excise Duty and interest thereon aggregating to ` 123214466.

(b) According to the records of the Company there are no dues of income tax or salestax or service tax or duty of customs or duty of excise or value added tax which have notbeen deposited on account of any dispute except the following :

NAME OF THE STATUTE NATURE OF DUES PERIOD TO WHICH IT RELATES AMOUNT (IN `) FORUM WHERE DISPUTE IS PENDING
Tamilnadu General Sales Tax Act 1959 Sales Tax 1993 to 1998 261308 Sales Tax Appellate Tribunal- Coimbatore
The Kerala Value Added Tax Act 2003 Sales Tax 2008-09 to 2011-12 8497126 Commissioner Sales Tax- Kochi
The Bihar Tax on Entry of Goods into Local Areas for Consumption Use or Sale therein Act 1993 Entry Tax 2003 to 2011 137039667 High Court- Bihar
The Tamilnadu Tax on Entry of Goods into Local Areas Act 2001 Entry Tax Various Year 30359060 Supreme Court
The Uttar Pradesh Tax on Entry Tax 2006-07 to 2010-11 29001520 High Court/ Appellate Authorities
Entry of Goods into Local Areas Act 2007
The Income Tax Act 1961 Income Tax 1988-89 and 1992-93-1995-96 631783280 Income tax Appellate Tribunal/
1991-92 287055343 Assessing Officer
The Central Excise Act 1944 Excise Duty 1979 1997 and 1998 30833015 Supreme Court of India
20002003 and 2004 7984644 High Courts
1983199419951999 689573363 Customs Excise
200220032007 and 398996358 Service Tax Appellate
2011 Tribunal
1979 to 2011 1230503265 Commissioner of Central
Excise-Appeal
1995 to 2011 1450169472 Appellate Authority for Industrial and Financial reconstruction before abolition*

*further notice from the Excise Department in respect of approaching appropriateappellate authorities is awaited. Also refer note no. 25.1 (1.1) (b) (iii) of thestandalone financial statements for the year ended March 31 2017.

8. During the year the Company has not defaulted in repayment of dues to Banksfinancial institution government or debenture holders except the following :

Name of the Banks Amount of Default in ` (Principal and Interest)* Period of Default – in Months
Canara Bank 252271114 Upto 24 months
Allahabad Bank 38721547 Upto 18 months
Syndicate Bank 103620596 Upto 24 months
State Bank of Bikaner and Jaipur 111963807 Upto 27 months
Vijaya Bank 110966124 Upto 27 months
Indiabulls Housing Financial Services Limited 1463042801 Upto 48 months
Total 2080585989

*Please refer note no. 25.7 to the standalone financial statements for the year endedMarch 31 2017

9. During the year the Company has not raised any money by way of initial public offeror further public offer and term loan. Therefore Para 3 (ix) of the Order is notapplicable 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 standards in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by officers or employees of the Company noticed or reported during theyear nor have we been informed of such case by the management.

11. In respect of excess managerial remuneration aggregating to ` 2227312 paid forthe period from September 27 2015 to September 12 2016 the Company has made necessaryapplication to the Central Government for its approval. The Management as explained isconfident of receiving the same in due course.

12. In our opinion the Company is not Nidhi Company. Therefore Para 3 (xii) of theOrder is not applicable to the Company.

13. All transactions with the related parties are in compliance with section 177 and188 of Act and the details have been disclosed in the Financial Statements (Refer note no.25.10 to the standalone financial statements for the year ended March 31 2017) asrequired by the applicable accounting standards.

14. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures or in the recent past.

15. The Company has not entered into any non-cash transactions with directors orpersons connected with him under section 192 of the Act. Therefore Para 3 (xv) of theOrder is not applicable to the Company.

16. The Company is not required to be registered under section 45 IA of the ReserveBank of India Act 1934. Therefore Para 3 (xvi) of the Order is not applicable to theCompany.

For LODHA & CO.
Chartered Accountants
Firm Registration No. 301051E
R. P. Baradiya
Partner
Membership No. 44101

 

Place : Mumbai
Date : May 29 2017

‘Annexure B'

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 GoldenTobacco Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 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 deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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 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 LODHA & CO.
Chartered Accountants
Firm Registration No. 301051E
R. P. Baradiya
Partner
Membership No. 44101

 

Place : Mumbai
Date : May 29 2017