The Members of
Gujarat State Financial Corporation Report on the Financial Statements :
We have audited the accompanying financial statements of GUJARAT STATE FINANCIALCORPORATION (the Corporation) which comprise the Balance Sheet as at March 312017 the Statement of Profit and Loss and the Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.
Management Responsibility for the Financial Statements :
Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position financial performance and cash flows of theCorporation in accordance with the Accounting Standards issued by the Institute ofChartered Accountants of India (ICAI) and in accordance with the State FinancialCorporations Act 1951 (the Act). This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Corporation and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
Auditor's Responsibility :
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the 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 Corporationspreparation 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 Corporation has in place an adequate internalfinancial controls system over financial reporting and the operating effectiveness of suchcontrols. An audit also includes evaluating the appropriateness of the accounting policiesused and the reasonableness of the accounting estimates made by the CorporationsDirectors 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 financial statements.
Basis for Qualified Opinion :
a. The financial statements of the corporation are prepared on a going concern basisnotwithstanding the fact that its net worth is completely eroded and defaulted inrepayment obligations due to liquidity problems. This is not in accordance with AccountingStandard (AS) - 1 "Disclosure of Accounting Policies". The effect of the same onthe financial statements is not ascertainable.
b. Dues payable to Government of Gujarat is subject to confirmation and adjustment ifany required upon such confirmation. Pending such confirmation the effect thereof oninterest and penal interest is not ascertainable.
c. Interest income on loans and advances on account of recovery from the parties arenot made on actual receipt basis. The effect of the same on written back of NPA bad debtprovision and any other item of financial statements could not be ascertained.
d. The balances in parties accounts in subsidiary ledgers with general ledgers ofloans and advances are not reconciled. The effect thereof on loans and advances is notascertainable.
e. Borrowings Other Liabilities and Provisions Other Assets and Loans and Advances aresubject to confirmation and adjustments if any and the effect of the same on thefinancial statements is not ascertainable.
f. The Corporation provides liability in respect of Gratuity and Leave Encashment onthe cash basis. The effect of the Gratuity and Leave Encashment liability to be recognizedon mercantile basis as compared to cash basis is not ascertainable.
Qualified Opinion :
In our opinion and to the best of our information and according to the explanationgiven to us except for the possible effects of the matter described in Basis forQualified Opinion paragraph the aforesaid financial statement give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith accounting principles generally accepted in India of the state of affairs of thecorporation as at 31st March 2017 and its loss and its cash flow for the year ended onthat date.
Report on other Legal & Regulatory Requirements :
a. We have sought and exceptfor the matters described in the Basis for QualifiedOpinion paragraph obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;
b. Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph above in our opinion proper books of accounts as required by law havebeen kept by the Corporation 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. Except thepossible effect of the matter described inthe Basis for QualifiedOpinionparagraph in our opinion the aforesaid financial statements comply with the Accountingstandards issued by ICAI.
| ||For Manubhai & Shah LLP |
| ||Chartered Accountants |
| ||Firm Registration No. 106041W / W100136 |
|Place : Ahmedabad ||K. B. Solanki |
|Date : 26-05-2017 ||Partner |
| ||Membership No. 110299 |