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GTN Industries Ltd.

BSE: 500170 Sector: Industrials
NSE: GTNIND ISIN Code: INE537A01013
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OPEN 17.00
PREVIOUS CLOSE 16.90
VOLUME 2656
52-Week high 26.25
52-Week low 12.26
P/E
Mkt Cap.(Rs cr) 31
Buy Price 16.95
Buy Qty 100.00
Sell Price 18.45
Sell Qty 583.00
OPEN 17.00
CLOSE 16.90
VOLUME 2656
52-Week high 26.25
52-Week low 12.26
P/E
Mkt Cap.(Rs cr) 31
Buy Price 16.95
Buy Qty 100.00
Sell Price 18.45
Sell Qty 583.00

GTN Industries Ltd. (GTNIND) - Auditors Report

Company auditors report

To

The Members of

GTN Industries Limited

Report on the Standalone Financial Statements

We have audited the accompanying financial statements of GTN Industries Limited ("theCompany") which comprise the Balance Sheet as at 31st March 2016 the Statement ofProfit and Loss the Cash Flow Statement for the year then ended and a summary of thesignificant 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 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 theauditor’s 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 Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall 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 of the state of affairs of the Companyas at 31st March 2016 and its loss and its cash flows 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 and on the basis of such checks of the books and records of theCompany as we considered appropriate and according to the information and explanationgiven to us we give in the "Annexure A" a statement on the matters specifiedin 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 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 financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(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 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 the aforesaid financial statements – Refer Note 26B(3) to the financialstatements;

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 required to be transferred to the Investor Education andProtection Fund by the Company during the year ended 31st March 2016.

For Lodha & Co.
Chartered Accountants
Firm Registration No. 301051E
Place: Mumbai R.P. Baradiya
Date: 24th May 2016 Partner
Membership No. 44101

ANNEXURE A TO THE AUDITORS’ REPORT

With respect to the Annexure referred to in Independent Auditors’ Report to themembers of the Company on the standalone financial statements for the year ended 31stMarch 2016 we report that:

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

b) The fixed assets are physically verified by the management according to a phasedprogramme designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme certain fixed assets have been physically verified bythe Management during the year and no material discrepancies were noticed on suchverification.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except the following in case of land:

(Amount Rs. in lacs)

Total No. of cases Leasehold / Freehold Gross Block as at 31.03.2016 Net Block as at 31.03.2016 Remarks
59 Freehold 1757.13 1757.13 These lands are in the process of being transferred in the name of the Company pursuant to the change in its name from GTN Textiles Limited to GTN Industries Limited.

2. The inventory has been physically verified by the management at reasonable intervalsduring the year. Inventory lying with third parties and in-transit have been verified bythe management with reference to the confirmations received from them and/or subsequentreceipt of goods. The discrepancies noticed on verification between the physical stocksand book records were not material considering the operations of the Company and have beenproperly dealt with in the books of account.

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

4. During the year the Company has not given any loans not made investments notissued guarantees and has not provided security. Accordingly paragraph 3(iv) of theOrder is not applicable to the Company.

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 framed thereunder have been accepted by the Company.

6. On the basis of records produced we are of the opinion that prima facie the costrecords and accounts prescribed by the Central Government under Section 148(1) of the Acthave been maintained. However we are not required to and thus have not carried out anydetailed examination of such accounts and records with a view to ascertain whether theseare accurate and complete.

7. a) The Company is regular in depositing undisputed statutory dues includingProvident Fund Employees’ State Insurance Income Tax Sales Tax Service Tax Dutyof Customs Duty of Excise Value Added Tax Cess and any other statutory dues applicableto the Company with the appropriate authorities. No undisputed amounts payable in respectof the aforesaid statutory dues were outstanding as at the last day of the financial yearfor a period of more than six months from the date they became payable.

b) According to the records of the Company there are no dues of Income Tax Sales TaxService tax Duty of Customs Duty of Excise or Value Added Tax which have not beendeposited on account of any dispute except the following:

S. No. Name of the Statute Nature of Dues Rs. in Lacs Financial Year Forum where the dispute is pending
1. Customs Act 1962 Duty Drawback 18.69 1998-99 Madras High Court
2. Income Tax Act 1961 Income Tax 61.06 2010-11 Commissioner of Income Tax (Appeals) Kochi
3. Central Sales Tax 1956 Central Sales Tax 7.21 2006-07 Jt. Commissioner (Appeals) Nagpur

8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to financial institutions and banks. TheCompany does not have any dues to Government or debenture holders.

9. According to the information and explanations given to us the Company has notraised any money by way of initial public offer of further public offer (including debtinstruments) during the year. The term loans outstanding at the beginning of the year andthose raised during the year have been applied for the purpose for which they were raised.

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 the Company or on the Company by its officers or employees noticedor reported during the year nor have we been informed of such case by the management.

11. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V of the Act.

12. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

13. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards. (Refer Note 26B(11) to the financial statements)

14. During the year the Company has made preferential allotment of 0.01%Non-Cumulative Redeemable Preference Shares aggregating to Rs. 900 lakhs. As per theinformation and explanations given to us the requirements of Section 42 of the Act havebeen complied with and the amounts raised have been used for the purpose for which theywere raised.

15. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them as per the provisions ofSection 192 of the Act. Accordingly paragraph 3(xv) of the Order is not applicable.

16. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For Lodha & Co.
Chartered Accountants
Firm Registration No. 301051E
R.P. Baradiya
Place : Mumbai Partner
Date : 24th May 2016 Membership No. 44101

ANNEXURE B TO THE AUDITORS’ REPORT

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT OF EVEN DATE ON THE STANDALONEFINANCIAL STATEMENTS OF GTN INDUSTRIES LIMITED

Report on the Internal 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 GTNIndustries Limited ("the Company") as of March 31 2016 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

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 FinancialReporting issued by the Institute of Chartered Accountants of India". 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 safeguardingof its 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 includesobtaining 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s 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 company’s internal financial control over financial reporting includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company’s assets that could have a materialeffect 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 Chartered

Accountants of India". For Lodha & Co.
Chartered Accountants
Firm Registration No. 301051E
R.P. Baradiya
Place : Mumbai Partner
Date : 24th May 2016 Membership No. 44101